The Video Business is in the Best of Times or the Worst of Times? 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 technology company.
Best & 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 service where it feels like the the best of times for many, but the worst of times for some.
Here we have Disney announcing that they have actually currently accumulated one billion dollars in loses, and this even prior to releasing their direct to customer service. And then we have Verizon Media announcing sweeping layoffs which represent an exit from a few of the core entertainment service and innovation services that were operating under the Oath umbrella.
And obviously there isn't a reporting interval that passes where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the company service.
Netflix stock is on the rise again, permitting the company to invest in content at levels that should bewilder their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was revealed on January 22, 2019), showing that the AVOD organisation design can be viable and rather valuable.
5G is going to conserve us all?
This is where I wish to get in touch with the huge investments being made in 5G and supply my point of view on why 5G may well break some video business while at the same time make others.
Let's take a look at AT&T.
In the last four years AT&T has actually added 80 billion dollars of extra debt leaving it with more than 160 billion dollars of brief and long term financial obligation. Now, 50 billion of this shocking 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, but rather supply a point of view that the monetary circumstance for AT&T entering into its huge 5G financial investment cycle, while at the very same time making known their strategic effort to develop their video service capability through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely various with video.
So what can a service company like AT&T do to attend to the financial squeeze, and the general headwinds to the video business? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing the future of the video company.
It is my strong belief that common high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we have actually never seen before.
This will be great news for the PlutoTV's of the world and other ingenious video services like Quibi who will have the ability to reach more customers with a better quality experience as a result of being able to take advantage of a much faster network thanks to 5G.
It's bad news for network operators without a strategy 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 standards like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their consumers will rapidly be at a downside, and ripe for disruption, I think, from brand-new service models such as AVOD and the newest and most efficient video innovations.
The four character video technology that may conserve the video service.
The 4 character video standard that I believe will play a key function in the success of the video service is HEVC, the video codec that is now released on two billion devices. The following slide discussion offers numbers relating to HEVC gadget penetration which deserve seeing.
There has been much blogged about HEVC royalty issues, something that set off development of an alternative codec which presumably is royalty complimentary. Nevertheless, while some in the industry ended up being preoccupied with concerns around licensing and royalties, major developments have actually been made on the legal front, including nearly every CE gadget producer consisting of HEVC playback support.
For example, HEVC Advance waived all royalties for digital circulation of material. This means, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the getting device. Supplied that you are delivering bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your business will not have to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any convenience, the companies who have currently 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 among others.
What about HEVC playback assistance?
This is an excellent and crucial question and possibly the location of development around the HEVC community that is least recognized or understood.
Beginning with at home playback, if your users have bought a TELEVISION, 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 gamer upgrade.
HEVC is now resident in practically every SoC that enters to any mid to high-end CE video gadget. Given that 2015, industry reports show this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a fantastic start, however what about mobile?
The data company ScientiaMobile preserves the biggest dataset of network gadget gain access to profiles by getting information from the biggest cordless operators worldwide. This business reports that a whopping 78% of all iOS smartphone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in the majority of industrialized markets, Android is still an exceptionally important device profile, and here the ScientiaMobile data is very encouraging with 57% of Android smartphone requests originating from gadgets that support HEVC decoding.
And provided the HEVC device penetration and hardware support any worries about an early relocation to HEVC are not required. What other factors validate the concept that HEVC will be a booster to the video service?
LiveU recently released a report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially worldwide of sports. And just in case you have thoughts that using HEVC is a passing trend en route to some alternative codec, think about that in 2018, 25% of all LiveU produced traffic was streamed using the HEVC video requirement while the only other codec used was H. 264.
The report stated that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a pattern that was clearly obvious at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The trends we simply analyzed reveal that we have an ever more requiring customer who wants material that shows off the complete capabilities of their seeing device, which indicates higher resolutions and more sophisticated video standards like HDR. This same user is now consuming more material, which contributes to further congesting the network.
This customer consumption pattern is hitting a shift from handled services to unmanaged, or OTT distribution and producing technical stress inside incumbent service operators who are facing technical shifts and service design fracturing. Astonishingly, in spite of an extremely clear hazard to the incumbent services who are seeing video subscriber loses mounting into the hundreds of thousands over simply a few 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 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 an innovation enabler. It's a video standard that is set to interrupt many of the conventional operators and early OTT streaming services. Not since the consumer knows the difference between H. 264, VP9, and even HEVC, but due to the fact that the click here customer is becoming aware that better quality is possible, and as they do, they will migrate to the service who delivers the finest quality affordably.
At Beamr, we believe that the evidence of our item and innovation excellence should be skilled and not just spoken about. Which is why we've put together the best offer that we have seen in the industry 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 gadget. These two numbers are where the image of HEVC as the most logical video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech business currently encoding and distributing content in HEVC. And given the HEVC device penetration and hardware support any concerns about a premature relocation to HEVC are not warranted. What other factors validate the concept that HEVC will be a booster to the video company?
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Published by: Mark Donnigan