Best & Worst of Times in Video Mark Donnigan Marketing Leader at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
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Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding technology company.
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The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation conserve us?
This is a fascinating question 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 lots of, however the worst of times for some.
Here we have Disney revealing that they have actually currently accumulated one billion dollars in loses, and this even prior to releasing their direct to consumer company. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core entertainment service and innovation businesses 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 business.
Netflix stock is on the increase again, allowing the business to invest in material at levels that should mystify their competitors. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was revealed on January 22, 2019), proving that the AVOD organisation design can be feasible and quite important.
5G is going to save us all?
This is where I want 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 exact same time make others.
Let's 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 debt. 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 analyst, however rather supply a viewpoint that the monetary situation for AT&T entering into its massive 5G financial investment cycle, while at the same time making known their tactical initiative to construct up their video service capability through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something really various with video.
What can a service supplier like AT&T do to deal with the financial capture, and the overall headwinds to the video company? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on numerous minds who are analyzing the future of the video service.
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've never ever 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 much better quality experience as a result of having the ability to leverage a 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 handled 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 clients will rapidly be at a disadvantage, and ripe for disruption, I believe, from brand-new business models such as AVOD and the latest and most efficient video innovations.
The 4 character video innovation that may save the video company.
The four character video requirement that I think will play a key role in the success of the video organisation is HEVC, the video codec that is now deployed on two billion gadgets. The following slide presentation supplies numbers regarding HEVC device penetration which deserve seeing.
There has actually been much composed about HEVC royalty issues, something that set off development of an alternative codec which presumably is royalty free. However, while some in the market ended up being preoccupied with questions around licensing and royalties, significant advancements have been made on the legal front, consisting of nearly every CE gadget maker consisting of HEVC playback assistance.
For instance, HEVC Advance waived all royalties for digital distribution of material. This indicates, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is already covered by the receiving gadget. Offered that you are delivering bits over the wire and not via a physical system such as Blu-ray Disc, your business will not have to pay any additional royalties, at least 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, just among others.
What about HEVC playback assistance?
This is an excellent and essential concern and possibly the location of advancement around the HEVC community that is least recognized or understood.
Beginning with in-home playback, if your users have acquired a TV, video game console, Roku box or Apple TV in the last 3 years, you can be nearly guaranteed that support for HEVC exists without any need for extra licensing or player upgrade.
HEVC is now resident in almost every SoC that enters to any mid to high-end CE video gadget. Since 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, but what about mobile?
The information company ScientiaMobile keeps the largest dataset of network device gain access to profiles by getting data from the largest cordless operators on the planet. This business reports that a massive 78% of all iOS smart device demands come from devices click here that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in many developed markets, Android is still an incredibly essential device profile, and here the ScientiaMobile data is extremely motivating with 57% of Android smartphone requests originating from devices that support HEVC decoding.
These 2 numbers are where the image of HEVC as the most sensible video standard to follow H. 264, starts to take shape. Here we have significant video suppliers and tech companies currently encoding and dispersing content in HEVC. And given the HEVC gadget penetration and hardware support any fret about an early move to HEVC are not warranted. What other aspects verify the idea that HEVC will be a booster to the video business?
LiveU just recently published a report called 'State of Live' that showed growing trends in HEVC broadcasting, specifically worldwide of sports. And simply in case you have ideas that the usage of HEVC is a passing trend en route to some alternative codec, think about that in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video requirement while the only other codec used was H. 264.
The report stated that the high HEVC usage was a direct reflection on the increasing demand for professional-grade video quality, a pattern 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 wants content that displays the full capabilities of their seeing device, which means higher resolutions and advanced video requirements like HDR. This exact same user is now taking in more content, which contributes to additional congesting the network.
This consumer intake pattern is colliding with a shift from handled services to unmanaged, or OTT circulation and developing technical stress inside incumbent service operators who are facing technical shifts and company design fracturing. Exceptionally, in spite of a very clear threat to the incumbent services who are seeing video subscriber 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 offer the consumer more for less.
This is where the end 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 an innovation enabler. It's a video standard that is set to disrupt much of the traditional operators and early OTT streaming services. Not because the consumer understands the distinction in between H. 264, VP9, or even 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 best quality cost effectively.
At Beamr, we think that the proof of our item and technology excellence must be experienced and not just discussed. Which is why we've assembled the very best offer that we have seen in the industry where you can use our codecs in mix with our VOD transcoder, 100% totally free.
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 image of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have significant video distributors and tech companies currently encoding and dispersing material in HEVC. And offered the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not called for. What other elements verify the concept that HEVC will be a booster to the video service?
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Originally published by: Mark Donnigan