The Video Business is in the Best of Times or the Worst of Times? 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 innovation company.

The Video Business is in the Best of Times or the Hardest of Times? Mark Donnigan Marketing Leader at Beamr

Can a 4 character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video service where it feels like the the very best of times for many, but the worst of times for some.
Here we have Disney announcing that they have already accumulated one billion dollars in loses, and this even before introducing their direct to customer service. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core entertainment service and technology companies that were operating under the Oath umbrella.

And naturally there isn't a reporting interval that goes by where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service provider business.

Netflix stock is on the increase again, allowing the business to invest in content at levels that must mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was announced on January 22, 2019), proving that the AVOD service model can be practical and rather valuable.

5G is going to save us all, right?
This is where I wish to get in touch with the enormous investments being made in 5G and supply my perspective on why 5G might well break some video business while at the exact same time make others.

Let's take a look at AT&T.

In the last 4 years AT&T has actually included 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief and long term financial obligation. Now, 50 billion of this staggering number was the result of the 2015 purchase of DirecTV.

My point is not to break down the AT&T debt numbers, I'm not an analyst, but rather offer a perspective that the financial situation for AT&T going into its massive 5G investment cycle, while at the exact same time making understood their tactical initiative to build up their video service capacity through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very different with video.

So what can a service company like AT&T do to attend to the economic capture, and the total headwinds to the video organisation? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on many minds who are analyzing the future of the video organisation.

It is my strong belief that ubiquitous high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we have actually never ever seen prior to.
This will be good 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 better quality experience as an outcome of being able to leverage a much faster network thanks to 5G.

But, it's bad news for network operators without a plan to monetize this extra traffic load, and of course incumbents who are wishing to get by with incremental enhancements to their services; such as switching from handled to unmanaged, or OTT distribution, 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 rapidly be at a drawback, and ripe for disruption, I believe, from brand-new company designs such as AVOD and the newest and most efficient video innovations.
The 4 character video innovation that might save the video organisation.
The four character video requirement that I believe will play a crucial role in the success of the video company is HEVC, the video codec that is now deployed on 2 billion devices. The following slide discussion offers numbers concerning HEVC gadget penetration which are worth seeing.

There has actually been much discussed HEVC royalty issues, something that activated advancement of an alternative codec which most likely is royalty totally free. While some in the industry ended up being preoccupied with concerns around licensing and royalties, major advancements have been made on the legal front, including almost every CE device maker consisting of HEVC playback support.

HEVC Advance waived all royalties for digital distribution of content. This indicates, HEVC encoded material that is streamed will just bring a royalty for the hardware decoder and this is currently covered by the receiving gadget. Provided that you are providing bits over the wire and not by means of a physical mechanism such as get more info Blu-ray Disc, your business will not need to pay any extra royalties, at least not to HEVC Advance.

Now, if it's any convenience, the business who have already done their due diligence on the royalty question, and are streaming HEVC content to customers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.

What about HEVC playback support?
This is an excellent and essential question and maybe the area of advancement around the HEVC community that is least known or comprehended.

Beginning with in-home playback, if your users have actually bought a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly ensured that support for HEVC is present with no need 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 gadgets that support HEVC natively.

The information company ScientiaMobile preserves the biggest dataset of network device access profiles by getting information from the largest wireless operators worldwide. This company reports that a massive 78% of all iOS smart device requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in many developed markets, Android is still an incredibly crucial device profile, and here the ScientiaMobile data is really encouraging with 57% of Android mobile phone demands originating from gadgets that support HEVC decoding.

And provided the HEVC device penetration and hardware support any concerns about an early relocation to HEVC are not required. What other elements validate the idea that HEVC will be a booster to the video business?

LiveU just recently released a report called 'State of Live' that showed growing trends in HEVC broadcasting, specifically on the planet of sports. And just in case you have thoughts that using HEVC is a passing pattern en route to some alternative codec, think about that 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 use was a direct reflection on the increasing demand for professional-grade video quality, a trend that was clearly apparent at the 2018 FIFA World Cup in Russia.

So what does this mean for the market?
The patterns we simply took a look at reveal that we have an ever more requiring customer who wants content that displays the complete capabilities of their viewing device, which suggests greater resolutions and advanced video requirements like HDR. This exact same user is now taking in more material, which contributes to more congesting the network.

This consumer consumption pattern is clashing with a shift from handled services to unmanaged, or OTT circulation and developing technical stress inside incumbent service operators who are dealing with technical shifts and company design fracturing. Astonishingly, in spite of a very clear danger to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over just a couple of short 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 the end 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 an innovation enabler. It's a video standard that is set to interfere with much of the conventional operators and early OTT streaming services. Not due to the fact that the consumer understands the difference in between H. 264, VP9, or perhaps HEVC, however since the customer is ending up being mindful that better quality is possible, and as they do, they will migrate to the service who provides the best quality affordably.

At Beamr, we believe that the evidence of our item and innovation quality should be experienced and not simply talked about. Which is why we've assembled the very best deal that we have actually seen in the market where you can use our codecs in combination with our VOD transcoder, 100% totally 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 requirement to follow H. 264, starts to take shape. Here we have major video suppliers and tech business already encoding and distributing content in HEVC. And given the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not necessitated. What other aspects verify the concept that HEVC will be a booster to the video business?


You can try out Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding on a monthly basis. CLICK HERE

Author: Mark Donnigan

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