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.
Best & Worst of Times in Video Mark Donnigan Vice President Marketing at Beamr
Can a 4 character innovation conserve us?
This is an intriguing concern since there is a paradox emerging in the video company where it seems like the the best of times for lots of, but the worst of times for some.
Here we have Disney announcing that they have already accrued one billion dollars in loses, and this even prior to releasing their direct to customer service. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and innovation organisations that were running under the Oath umbrella.
And of course there isn't a reporting period that passes where the cable cutting numbers have not grown, which puts increasing pressure on the video side of the company company.
Yet, Netflix stock is on the rise again, permitting the business to purchase material at levels that should baffle 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 business model can be practical and quite valuable.
5G is going to conserve us all?
This is where I wish to connect with the huge 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 look at AT&T.
So in the last 4 years AT&T has actually added 80 billion dollars of additional 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 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 offer a point of view that the monetary situation for AT&T entering into its huge 5G investment cycle, while at the 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 different with video.
What can a service company like AT&T do to address the financial squeeze, and the general headwinds to the video organisation? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on numerous minds who are examining the future of the video organisation.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we've never ever seen prior to.
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 being able to utilize a faster network thanks to 5G.
However, it's bad news for network operators without a plan to monetize this additional traffic load, and of course incumbents who are intending to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT distribution, 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 new organisation designs such as AVOD and the latest and most effective video technologies.
The 4 character video innovation that might conserve the video company.
The 4 character video standard that I believe will play a crucial role in the success of the video business is HEVC, the video codec that is now released on two billion gadgets. The following slide presentation offers numbers concerning HEVC device penetration which deserve seeing.
There has been much blogged about HEVC royalty issues, something that set off advancement of an alternative codec which most likely is royalty totally free. 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 support.
For example, HEVC Advance waived all royalties for digital distribution of content. This means, HEVC encoded material that is streamed will just carry a royalty for the hardware decoder and this is currently covered by the getting gadget. Offered that you are delivering bits over the wire and not through a physical mechanism such as Blu-ray Disc, your business will not need to pay any additional royalties, at least not to HEVC Advance.
Now, if it's any comfort, the business who have actually already done their due diligence on the royalty concern, and are streaming HEVC material to customers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback assistance?
This is a great and essential question and maybe the area of development around the HEVC ecosystem that is least known or comprehended.
Beginning with in-home playback, if your users have actually purchased a TV, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that assistance for HEVC is present without any requirement for extra licensing or player upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video gadget. In truth, given that 2015, industry reports reveal this group of products numbers 400 million. That's 400 million devices that support HEVC natively. It's a terrific start, but what about mobile?
The data business ScientiaMobile preserves the largest dataset of network gadget access profiles by getting information from the biggest wireless operators worldwide. This business reports that a tremendous 78% of all iOS smart device requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in most developed markets, Android is still a very important device profile, and here the ScientiaMobile data is extremely encouraging with 57% of Android smartphone demands originating from gadgets 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 offered the HEVC gadget Learn more now penetration and hardware support any fret about an early relocation to HEVC are not required. However, what other factors confirm the idea that HEVC will be a booster to the video service?
LiveU recently released a report called 'State of Live' that showed growing patterns in HEVC broadcasting, specifically worldwide of sports. And simply in case you have ideas that making use of HEVC is a passing trend en route to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed utilizing the HEVC video requirement while the only other codec used was H. 264.
In reality, the report mentioned that the high HEVC usage was a direct reflection on the increasing need 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 patterns we simply examined reveal that we have an ever more demanding consumer who wants content that displays the complete abilities of their viewing gadget, which means higher resolutions and more advanced video standards like HDR. But, this exact same user is now consuming more material, which contributes to further congesting the network.
This consumer consumption pattern is hitting a shift from handled services to unmanaged, or OTT distribution and developing technical stress inside incumbent service operators who are dealing with technical shifts and company model fracturing. Astonishingly, in spite of a really clear threat to the incumbent services who are seeing video customer loses installing into the hundreds of thousands over just a couple of brief quarters, some are continuing with the status quo even while brand-new entrants are releasing services that offer 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 an innovation enabler. It's a video standard that is set to interfere with much of the conventional operators and early OTT streaming services. Not since the consumer understands the distinction in between H. 264, VP9, or even HEVC, but because the customer is realising that better quality is possible, and as they do, they will migrate to the service who delivers the very best quality affordably.
At Beamr, our company believe that the evidence of our item and innovation excellence should be knowledgeable and not just talked about. Which is why we have actually assembled the very best deal that we have seen in the industry where you can utilize our codecs in combination with our VOD transcoder, 100% for free.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. These two numbers are where the photo of HEVC as the most sensible video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and distributing material in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not required. What other factors validate the idea that HEVC will be a booster to the video service?
You can experiment with Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding monthly. CLICK ON THIS LINK
Author: Mark Donnigan