Good Times & Worst of Times in Video Services Mark Donnigan Marketing Head at Beamr
Get the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is Vice President of Marketing at Beamr, a high-performance video encoding technology company.
Are we in the best of times or the bad times in video? Mark Donnigan Marketing Leader at Beamr
Can a 4 character technology conserve us?
This is an interesting question because there is a paradox emerging in the video company where it seems like the the best of times for lots of, but the worst of times for some.
Here we have Disney revealing that they have currently accumulated one billion dollars in loses, and this even before launching their direct to consumer business. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and technology companies that were running under the Oath umbrella.
And naturally there isn't a reporting interval that goes by where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service supplier organisation.
Yet, Netflix stock is on the rise again, allowing the business to buy material at levels that need to baffle their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was announced on January 22, 2019), proving that the AVOD service design can be practical and quite valuable.
5G is going to conserve us all?
This is where I desire to get in touch with the massive investments being made in 5G and offer my point of view on why 5G might well break some video business while at the exact same time make others.
Let's look at AT&T.
In the last 4 years AT&T has added 80 billion dollars of extra debt leaving it with more than 160 billion dollars of short and long term debt. Now, 50 billion of this staggering number was the outcome of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an analyst, but rather provide a perspective that the monetary scenario for AT&T going into its enormous 5G financial investment cycle, while at the very same time making known their tactical initiative to build up their video service capability through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something really different with video.
So what can a company like AT&T do to deal with the financial squeeze, and the general headwinds to the video service? Such as declining pay TV subs, and fragmenting OTT service offerings. This is the concern on many minds who are examining the future of the video service.
It is my strong belief that common high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we've never seen before.
This will be excellent news for the PlutoTV's of the world and other innovative video services like Quibi who will have the ability to reach more customers with a much better quality experience as an outcome of being able to take advantage of a much faster network thanks to 5G.
It's bad news for network operators without a plan to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to utilize aging video standards like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their clients will quickly be at a drawback, and ripe for disruption, I think, from new business designs such as AVOD and the most recent and most effective video innovations.
The four character video innovation that might save the video service.
The four character video standard that I believe will play a key role in the success of the video company is HEVC, the video codec that is now released on two billion gadgets. The following slide presentation supplies numbers concerning HEVC device penetration which deserve seeing.
There has been much composed about HEVC royalty issues, something that set off development of an alternative codec which probably is royalty free. Nevertheless, while some in the industry became preoccupied with questions around licensing and royalties, major advancements have actually been made on the legal front, consisting of almost every CE gadget producer including HEVC playback support.
For instance, HEVC Advance waived all royalties for digital circulation of material. This implies, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is already covered by the getting gadget. Provided that you are delivering bits over the wire and not through a physical system such as Blu-ray Disc, your company will not need to pay any extra royalties, a minimum of not to HEVC Advance.
Now, if it's any comfort, the business who have currently done their due diligence on the royalty concern, and are streaming HEVC material to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback assistance?
This is a very good and crucial question and possibly the area of development around the HEVC community that is least known or understood.
Beginning with at home playback, if your users have purchased a TV, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that assistance for HEVC exists without any requirement for extra licensing or gamer upgrade.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. That's 400 million devices that support HEVC natively.
The data business ScientiaMobile preserves the largest dataset of network device access profiles by getting information from the largest wireless operators in the world. This company reports that a tremendous 78% of all iOS smartphone requests originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in the majority of industrialized markets, Android is still a very essential gadget profile, and here the ScientiaMobile data is extremely encouraging with 57% of Android mobile phone demands originating from gadgets that support HEVC decoding.
And offered the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not warranted. What other aspects confirm the concept that HEVC will be a booster to the video organisation?
LiveU just recently published a report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially on the planet of sports. And just in case you have ideas that the use of HEVC is a passing pattern on the way to some alternative codec, think about that More Information in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.
The report mentioned that the high HEVC usage was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was plainly apparent at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The patterns we just analyzed expose that we have an ever more requiring consumer who wants content that displays the full abilities of their viewing gadget, which means higher resolutions and more innovative video standards like HDR. But, this exact same user is now taking in more material, which adds to further congesting the network.
This customer consumption pattern is hitting a shift from handled services to unmanaged, or OTT circulation and developing technical tension inside incumbent service operators who are facing technical shifts and company model fracturing. Remarkably, in spite of an extremely clear threat to the incumbent services who are seeing video customer loses installing into the numerous thousands over simply a couple of brief quarters, some are continuing with the status quo even while brand-new entrants are launching services that offer the consumer more for less.
This is where completion of the story will be written for some as the best of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video standard that is set to interrupt many of the traditional operators and early OTT streaming services. Not due to the fact that the consumer understands the distinction between H. 264, VP9, or even HEVC, however since the consumer is realising that much better quality is possible, and as they do, they will migrate to the service who provides the finest quality economically.
At Beamr, we believe that the evidence of our product and innovation excellence should be experienced and not just discussed. Which is why we have actually put together the very best deal that we have seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% for free.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. These two numbers are where the photo of HEVC as the most sensible video standard to follow H. 264, starts to take shape. Here we have significant video suppliers and tech companies currently encoding and dispersing content in HEVC. And given the HEVC device penetration and hardware support any worries about a premature move to HEVC are not required. What other factors verify the concept that HEVC will be a booster to the video service?
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Author: Mark Donnigan