The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan VP Marketing at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is VP Marketing for Beamr, a high-performance video encoding technology company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan VP Marketing at Beamr
Can a 4 character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video business where it seems like the the very best of times for numerous, 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 prior to releasing their direct to customer organisation. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and innovation organisations that were running under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the service company organisation.
Yet, Netflix stock is on the increase once again, enabling the company to purchase material at levels that need to baffle their competitors. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was announced on January 22, 2019), proving that the AVOD business design can be viable and quite valuable.
5G is going to save all of us, right?
This is where I desire to link with the massive investments being made in 5G and offer my viewpoint on why 5G might well break some video business while at the same time make others.
Let's look at AT&T.
So in the last 4 years AT&T has actually added 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of short and long term debt. Now, 50 billion of this shocking 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, however rather offer a perspective that the monetary situation for AT&T entering into its massive 5G investment cycle, while at the very same time making known their strategic initiative to build up their video service capability through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely different with video.
What can a service company like AT&T do to resolve the economic squeeze, and the total headwinds to the video service? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are evaluating the future of the video service.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we have actually never ever seen before.
This will be excellent news for the PlutoTV's of the world and other innovative video services like Quibi who will be able to reach more customers with a much better quality experience as a result of having the ability to utilize a faster network thanks to 5G.
It's bad news for network operators without a strategy to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental enhancements to their services; such as changing from handled to unmanaged, or OTT circulation, while continuing to use aging video standards like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their customers will quickly be at a disadvantage, and ripe for disruption, I think, from brand-new service models such as AVOD and the most recent and most efficient video innovations.
The four character video innovation that might conserve the video organisation.
The 4 character video standard that I think will play a crucial role in the success of the video company is HEVC, the video codec that is now released on 2 billion devices. The following slide presentation offers numbers concerning HEVC device penetration which deserve seeing.
There has actually been much blogged about HEVC royalty concerns, something that triggered advancement of an alternative codec which presumably is royalty free. Nevertheless, while some in the market ended up being preoccupied with questions around licensing and royalties, major developments have been made on the legal front, consisting of almost every CE device producer consisting of HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of content. This implies, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is already covered by the getting device. Supplied that you are providing bits over the wire and not by means of a physical system such as Blu-ray Disc, your company will not need to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any comfort, the business who have already done their due diligence on the royalty question, and are streaming HEVC content to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to name a few.
What about HEVC playback support?
This is a great and crucial question and maybe the location of advancement around the HEVC ecosystem that is least recognized or comprehended.
Beginning with at home playback, if your users have bought a TV, game console, Roku box or Apple TV in the last 3 years, you can be nearly guaranteed that support for HEVC exists 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 gadget. That's 400 million devices that support HEVC natively.
The information company ScientiaMobile maintains the largest dataset of network device access profiles by getting data from the biggest wireless operators on the planet. This company reports that a whopping 78% of all iOS smartphone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in most industrialized markets, Android is still an extremely important device profile, and here the ScientiaMobile data is Learn more now very encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
These two numbers are where the photo of HEVC as the most rational video standard to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business currently encoding and distributing content in HEVC. And given the HEVC gadget penetration and hardware support any stress over an early relocation to HEVC are not called for. What other factors confirm the concept that HEVC will be a booster to the video organisation?
LiveU recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, specifically on the planet of sports. And simply in case you have ideas that using HEVC is a passing pattern en route to some alternative codec, consider that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video standard while the only other codec used was H. 264.
The report specified that the high HEVC usage was a direct reflection on the increasing need for professional-grade video quality, a trend that was plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The trends we simply analyzed expose that we have an ever more demanding customer who wants material that displays the complete capabilities of their seeing device, which indicates higher resolutions and advanced video standards like HDR. However, this same user is now consuming more material, which contributes to additional congesting the network.
This customer usage pattern is hitting a shift from managed services to unmanaged, or OTT distribution and developing technical tension inside incumbent service operators who are dealing with technical shifts and business design fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video customer loses installing into the numerous thousands over just a few brief quarters, some are continuing with the status quo even while brand-new entrants are launching services that provide the customer more for less.
This is where completion of the story will be composed for some as the very 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 interfere with numerous of the traditional operators and early OTT streaming services. Not since the consumer understands the distinction in between H. 264, VP9, or perhaps HEVC, but because the consumer is becoming conscious that much better quality is possible, and as they do, they will move to the service who provides the finest quality cost effectively.
At Beamr, we believe that the proof of our product and technology excellence must be experienced and not just talked about. Which is why we've put together the best offer that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% free of charge.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video gadget. These 2 numbers are where the photo of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and dispersing material in HEVC. And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not necessitated. What other aspects confirm the idea that HEVC will be a booster to the video company?
You can check 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 ON THIS LINK
Originally published by: Mark Donnigan