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 innovation company.
Good Times & Bad Times in the Video Business Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video company where it feels like the the very best of times for many, however the worst of times for some.
Here we have Disney revealing that they have actually currently accrued one billion dollars in loses, and this even before introducing their direct to consumer company. And after that we have Verizon Media announcing 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 of course there isn't a reporting interval that passes where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider business.
Netflix stock is on the increase once again, permitting the company to invest in content at levels that must mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (deal was revealed on January 22, 2019), showing that the AVOD service model can be feasible and quite important.
5G is going to save all of us, right?
This is where I wish to get in touch with the enormous financial investments being made in 5G and supply my point of view on why 5G may well break some video business while at the very same time make others.
Let's look at AT&T.
In the last four years AT&T has included 80 billion dollars of extra debt leaving it with more than 160 billion dollars of short and long term debt. 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 financial obligation numbers, I'm not an analyst, however rather provide a viewpoint that the financial scenario for AT&T going into its enormous 5G financial investment cycle, while at the very same time making understood their strategic effort to develop their video service capacity 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 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 lots of minds who are examining the future of the video business.
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've never seen prior to.
This will be good news for the PlutoTV's of the world and other ingenious video services like Quibi who will be able to reach more consumers with a better quality experience as a result of having the ability to take advantage of a quicker network thanks to 5G.
It's bad news for network operators without a plan to monetize this extra 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 circulation, while continuing to utilize aging video standards like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their customers will quickly be at a drawback, and ripe for interruption, I think, from brand-new business models such as AVOD and the newest and most effective video innovations.
The 4 character video innovation that might conserve the video service.
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 presentation supplies numbers relating to HEVC gadget penetration which deserve seeing.
There has been much written about HEVC royalty concerns, something that activated advancement of an alternative codec which most likely is royalty totally free. While some in the industry became preoccupied Click Here with concerns around licensing and royalties, significant developments have actually been made on the legal front, consisting of nearly every CE gadget producer including HEVC playback assistance.
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 currently covered by the receiving 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 material to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback support?
This is a really good and crucial question and possibly the location of development around the HEVC environment that is least known or understood.
Beginning with in-home playback, if your users have acquired a TV, game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly guaranteed that assistance for HEVC exists without any requirement for extra licensing or player 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 gadgets that support HEVC natively.
The data company ScientiaMobile preserves the biggest dataset of network gadget gain access to profiles by receiving data from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smartphone requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are primary in the majority of developed markets, Android is still a very essential gadget profile, and here the ScientiaMobile information is extremely motivating with 57% of Android mobile phone demands originating from devices that support HEVC decoding.
And provided the HEVC device penetration and hardware support any concerns about an early move to HEVC are not required. What other factors confirm the concept that HEVC will be a booster to the video organisation?
LiveU just recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, particularly in the world of sports. And simply in case you have ideas that using HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.
In truth, 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 plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The trends we simply analyzed reveal that we have an ever more requiring consumer who desires content that flaunts the complete abilities of their seeing device, which means higher resolutions and more advanced video standards like HDR. However, this same user is now taking in more content, which adds to additional congesting the network.
This customer intake pattern is colliding with a shift from managed services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are facing technical shifts and service model fracturing. Amazingly, in spite of an extremely clear threat to the incumbent services who are seeing video subscriber 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 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 disrupt numerous of the standard operators and early OTT streaming services. Not because the consumer knows the difference in between H. 264, VP9, and even HEVC, however due to the fact that the consumer is realising 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, our company believe that the evidence of our item and innovation quality need to be experienced and not just talked about. Which is why we have actually created the finest offer that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% totally free.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. These two numbers are where the picture of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech business currently encoding and distributing 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 factors confirm the concept that HEVC will be a booster to the video company?
You can attempt out Beamr's software video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Written by: Mark Donnigan