Best of Times & Bad Times in the Video Business 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 VP Marketing at Beamr, a high-performance video encoding innovation company.
Are we in the best of times or the worst of times in video? Mark Donnigan Marketing Head at Beamr
Can a 4 character innovation save us?
This is an intriguing question because there is a paradox emerging in the video company where it feels like the the very best of times for numerous, however the worst of times for some.
Here we have Disney revealing that they have already accumulated one billion dollars in loses, and this even before introducing their direct to consumer company. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and innovation services that were operating under the Oath umbrella.
And naturally there isn't a reporting period that goes by where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the provider company.
Netflix stock is on the increase again, enabling the company to invest in content at levels that need to mystify their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (deal was revealed on January 22, 2019), showing that the AVOD company model can be feasible and quite important.
5G is going to save us all?
This is where I want to get in touch with the massive financial investments being made in 5G and offer my point of view on why 5G may well break some video business while at the exact same time make others.
Let's take a look at AT&T.
So in the last 4 years AT&T has included 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of short and long term financial obligation. Now, 50 billion of this incredible number was the result of the 2015 purchase of DirecTV.
My point is not to break down the AT&T financial obligation numbers, I'm not an analyst, however rather supply a point of view that the monetary circumstance for AT&T entering into its huge 5G financial investment cycle, while at the exact same time making known their strategic effort 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 extremely various with video.
So what can a company like AT&T do to resolve the economic capture, and the total headwinds to the video company? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on many minds who are evaluating the future of the video organisation.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will release a video tsunami of traffic on the network like we have actually never ever seen prior to.
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 consumers with a much better quality experience as an outcome of being able to leverage a quicker network thanks to 5G.
It's bad news for network operators without a plan to monetize this additional traffic load, and of course incumbents who are hoping to get by with incremental improvements to their services; such as switching from managed to unmanaged, or OTT distribution, while continuing to use aging video requirements like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their customers will rapidly be at a downside, and ripe for disturbance, I believe, from new business models such as AVOD and the most recent and most effective video innovations.
The 4 character video innovation that may save the video company.
The four character video standard that I believe will play a key function in the success of the video organisation is HEVC, the video codec that is now released on two billion devices. The following slide discussion supplies numbers regarding HEVC gadget penetration which are worth seeing.
There has actually been much blogged about HEVC royalty issues, something that triggered development of an alternative codec which presumably is royalty free. However, while some in the market ended up being preoccupied with concerns around licensing and royalties, major advancements have been made on the legal front, consisting of almost every CE device manufacturer including HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital distribution of material. This indicates, HEVC encoded content that is streamed will just bring a royalty for the hardware decoder and this is currently covered by the receiving gadget. Offered that you are providing bits over the wire and not through a physical system such as Blu-ray Disc, your company will not need to pay any additional royalties, a minimum of not to HEVC Advance.
Now, if it's any convenience, the business who have actually already done their due diligence on the royalty concern, and are streaming HEVC content to customers today, include: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to call a couple of.
What about HEVC playback support?
This is an excellent and important question and perhaps the location of advancement around the HEVC ecosystem that is least recognized or understood.
Beginning with in-home playback, if your users have purchased a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly ensured that assistance for HEVC is present with no need for additional licensing or player upgrade.
HEVC is now resident in nearly 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 gadget access profiles by receiving data from the largest cordless operators worldwide. This company reports that a whopping 78% of all iOS smartphone demands originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of industrialized markets, Android is still an exceptionally essential gadget profile, and here the ScientiaMobile information is very motivating with 57% of Android smart device requests originating from devices that support HEVC decoding.
And offered the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not warranted. What other factors verify the idea that HEVC will be a booster to the video company?
LiveU recently released a report called 'State of Live' that showed growing patterns in HEVC broadcasting, specifically in the world of sports. And just in case you have thoughts that making use of HEVC is a passing trend on the way 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.
In truth, the report specified that the high HEVC usage 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.
What does this mean for the market?
The trends we just analyzed reveal that we have an ever more requiring consumer who desires material that shows off the complete capabilities of their seeing gadget, which implies greater resolutions and advanced video requirements like HDR. This very same user is now consuming more material, which contributes to further congesting the network.
This consumer intake pattern is colliding with a shift from handled services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are facing technical shifts and service design fracturing. Surprisingly, in spite of a very clear danger to the incumbent services who are seeing video customer loses mounting into the hundreds of thousands over simply a couple of brief quarters, some are continuing with the status quo even while new entrants are introducing services that offer the customer more for less.
This is where the end of the story will be written for some as the finest of times, and for others as the worst of times.
HEVC is more than an innovation enabler. It's a video requirement that is set to interrupt a lot of the standard operators and early OTT streaming services. Not because the consumer knows the difference between H. 264, VP9, or perhaps HEVC, however due to the fact that the consumer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality economically.
At Beamr, we think Mark Donnigan that the evidence of our item and innovation excellence must be experienced and not simply spoken about. Which is why we have actually 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% for complimentary.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. These two 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 companies currently encoding and distributing content in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not called for. What other aspects confirm the idea that HEVC will be a booster to the video business?
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Published by: Mark Donnigan