Get 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 Marketing Leader at Beamr
Can a 4 character innovation conserve us?
This is an interesting concern because there is a paradox emerging in the video business 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 actually currently accumulated one billion dollars in loses, and this even prior to introducing their direct to customer organisation. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology services that were running under the Oath umbrella.
And obviously there isn't a reporting period that passes where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the service company company.
Yet, Netflix stock is on the rise once again, allowing the company to invest in material at levels that should bewilder their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in cash to Viacom (offer was announced on January 22, 2019), proving that the AVOD organisation model can be practical and rather valuable.
5G is going to save us all?
This is where I want to connect with the huge financial investments being made in 5G and provide my point of view on why 5G may well break some video companies while at the exact same time make others.
Let's take a look at AT&T.
In the last four years AT&T has added 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of brief and long term debt. 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 debt numbers, I'm not an analyst, however rather provide a point of view that the monetary situation for AT&T going into its massive 5G financial investment cycle, while at the very same time making understood their strategic initiative 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 different with video.
So what can a service supplier like AT&T do to deal with the financial squeeze, and the overall headwinds to the video organisation? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on lots of minds who are examining the future of the video company.
It is my strong belief that common high speed mobile networks powered by 5G will unleash 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 innovative video services like Quibi who will be able to reach more customers with a much better quality experience as an outcome of being able to utilize a much faster 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 enhancements to their services; such as changing from handled to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video distributors who continue to under serve their clients will quickly be at a drawback, and ripe for interruption, I believe, from new service designs such as AVOD and the most recent and most efficient video technologies.
The four character video innovation that may save the video business.
The 4 character video requirement that I believe will play a key function in the success of the video business is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide discussion provides numbers concerning HEVC gadget penetration which are worth seeing.
There has been much discussed HEVC royalty concerns, something that set off advancement of an alternative codec which probably is royalty complimentary. However, while some in the market became preoccupied with questions around licensing and royalties, major developments have actually been made on the legal front, including almost every CE gadget producer consisting of HEVC playback assistance.
HEVC Advance waived all royalties for digital circulation of content. This means, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is already covered by the receiving device. Offered that you are providing bits over the wire and not by means of a physical mechanism such as Blu-ray Disc, your company will not have 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 consumers today, include: Amazon, Get More Information Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to call a couple of.
What about HEVC playback assistance?
This is an excellent and crucial question and maybe the location of advancement around the HEVC ecosystem that is least recognized or understood.
Starting with at home playback, if your users have actually bought a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly guaranteed that assistance for HEVC is present without any requirement for extra licensing or gamer upgrade.
HEVC is now resident in almost every SoC that enters to any mid to high-end CE video gadget. In truth, because 2015, market reports show this group of products numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a great start, however what about mobile?
The data business ScientiaMobile maintains the largest dataset of network gadget access profiles by receiving data from the largest cordless operators worldwide. This business reports that a whopping 78% of all iOS mobile phone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in most developed markets, Android is still a very crucial gadget profile, and here the ScientiaMobile information is really motivating with 57% of Android smart device demands originating from gadgets that support HEVC decoding.
These 2 numbers are where the image of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and dispersing content in HEVC. And provided the HEVC device penetration and hardware support any stress over an early transfer to HEVC are not called for. 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 revealed growing trends in HEVC broadcasting, especially on the planet 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, think about that in 2018, 25% of all LiveU generated traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.
In fact, the report specified that the high HEVC usage 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 industry?
The trends we simply examined reveal that we have an ever more requiring customer who wants material that displays the complete capabilities of their viewing gadget, which means greater resolutions and advanced video standards like HDR. This exact same user is now consuming more content, which contributes to more crowding the network.
This customer intake pattern is colliding with a shift from handled services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are facing technical shifts and business model fracturing. Exceptionally, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over simply a couple of brief quarters, some are continuing with the status quo even while new entrants are launching services that provide the consumer more for less.
This is where the end 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 a number of the traditional operators and early OTT streaming services. Not because the customer understands the distinction between H. 264, VP9, or even HEVC, but since the consumer is ending up being aware that much better quality is possible, and as they do, they will migrate to the service who provides the very best quality economically.
At Beamr, we think that the proof of our item and innovation excellence should be experienced and not just talked about. Which is why we've assembled the best offer that we have actually seen in the industry where you can use 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 device. These 2 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 necessitated. What other aspects validate the concept that HEVC will be a booster to the video organisation?
You can check out Beamr's software application video encoders today and get up to 100 hours of totally free HEVC and H. 264 video transcoding each month. CLICK ON THIS LINK
Originally published by: Mark Donnigan