Are we in the good times or the worst of times in video? Mark Donnigan Marketing Head at Beamr
Read 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.
Best of Times & Worst of Times in Video Mark Donnigan VP Marketing at Beamr
Can a four character technology save us?
This is a fascinating concern due to the fact that there is a paradox emerging in the video business where it seems like the the very best of times for many, however the worst of times for some.
Here we have Disney revealing that they have already accrued one billion dollars in loses, and this even prior to launching their direct to consumer business. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation companies that were operating under the Oath umbrella.
And of course 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 company service.
Netflix stock is on the increase again, enabling the business to invest in content at levels that must mystify their competitors. And then 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 business model can be feasible and quite important.
5G is going to save all of us, right?
This is where I wish to connect with the massive financial investments being made in 5G and provide my point of view on why 5G might well break some video companies while at the very same time make others.
Let's look at AT&T.
So 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 financial obligation. 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 debt numbers, I'm not an expert, however rather supply a viewpoint that the monetary scenario for AT&T entering into its massive 5G financial investment cycle, while at the very same time making known their strategic initiative to develop their video service capability through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something really various with video.
What can a service provider like AT&T do to resolve the economic capture, and the overall headwinds to the video company? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on lots of minds who are examining the future of the video company.
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 before.
This will be good news for the PlutoTV's of the world and other ingenious video services like Quibi who will have the ability to reach more consumers with a much better quality experience as an outcome of having the ability to utilize a quicker 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 provide low resolution mobile profiles.
Video distributors who continue to under serve their customers will rapidly be at a downside, and ripe for interruption, I believe, from brand-new service models such as AVOD and the latest and most effective video technologies.
The 4 character video technology that might save the video business.
The 4 character video standard that I think will play an essential role in the success of the video service is HEVC, the video codec that is now deployed on two billion gadgets. The following slide presentation supplies numbers concerning HEVC gadget penetration which are worth seeing.
There has actually been much written about HEVC royalty issues, something that triggered advancement of an alternative codec which presumably is royalty complimentary. While some in the market ended up being preoccupied with questions around licensing and royalties, significant advancements have been made on the legal front, including almost every CE gadget manufacturer including HEVC playback assistance.
For instance, HEVC Advance waived all royalties for digital distribution of content. This means, HEVC encoded content that is streamed will just bring a royalty for the hardware decoder and this is currently covered by the receiving device. Offered that you are providing bits over the wire and not by means of a physical mechanism 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 convenience, the business who have already done their due diligence on the royalty question, and are streaming HEVC content to consumers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a couple of.
What about HEVC playback assistance?
This is a great and essential question and possibly the area of development around the HEVC community that is least recognized or comprehended.
Beginning with at home playback, if your users have actually acquired a TELEVISION, video game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that support for HEVC is present with no requirement for extra licensing or player upgrade.
HEVC is now resident in practically every SoC that enters to any mid to high-end CE video device. In truth, considering that 2015, market reports show this group of products numbers 400 million. That's 400 million gadgets that support HEVC natively. It's an excellent start, however what about mobile?
The information business ScientiaMobile preserves the largest dataset of network gadget gain access to profiles by receiving data from the biggest cordless operators on the planet. This company reports that a whopping 78% of all iOS smart device demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are predominant in many industrialized markets, Android is still an extremely crucial gadget profile, and here the ScientiaMobile data is really motivating The Best of Times & Worst of Times in the Video Business with 57% of Android smartphone demands coming from gadgets that support HEVC decoding.
These 2 numbers are where the picture of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have significant video distributors and tech companies currently encoding and distributing content in HEVC. And offered the HEVC device penetration and hardware support any worries about an early transfer to HEVC are not required. However, what other elements verify the idea that HEVC will be a booster to the video business?
LiveU just recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, specifically in the world of sports. And just in case you have thoughts that the usage of HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed using the HEVC video standard while the only other codec used was H. 264.
The report stated that the high HEVC usage was a direct reflection on the increasing need for professional-grade video quality, a pattern that was clearly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The patterns we simply took a look at expose that we have an ever more demanding consumer who desires content that shows off the complete abilities of their viewing gadget, which indicates higher resolutions and more advanced video requirements like HDR. This very same user is now taking in more content, which contributes to more congesting the network.
This customer consumption pattern is hitting a shift from managed services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are dealing with technical shifts and business design fracturing. Remarkably, in spite of a really clear danger to the incumbent services who are seeing video subscriber loses mounting into the numerous thousands over simply a few short quarters, some are continuing with the status quo even while brand-new entrants are introducing services that give the customer more for less.
This is where completion of the story will be written 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 much of the conventional operators and early OTT streaming services. Not due to the fact that the consumer knows the distinction in between H. 264, VP9, or perhaps HEVC, but because the consumer is ending up being aware that better quality is possible, and as they do, they will migrate to the service who provides the very best quality cost effectively.
At Beamr, our company believe that the evidence of our product and technology excellence should be skilled and not simply spoken about. Which is why we have actually created the very 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 picture of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have significant video suppliers and tech business already encoding and dispersing content in HEVC. And given the HEVC device penetration and hardware support any concerns about a premature move to HEVC are not required. What other elements validate the concept that HEVC will be a booster to the video service?
You can check out Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding every month. CLICK ON THIS LINK
Written by: Mark Donnigan