The Video Business is in the Best of Times or the Worst of Times? 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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Are we in the good times or the bad times in video? Mark Donnigan Marketing Leader at Beamr
Can a 4 character innovation save us?
This is an intriguing question because there is a paradox emerging in the video business where it feels like the the finest of times for lots of, but the worst of times for some.
Here we have Disney announcing that they have actually already accrued one billion dollars in loses, and this even before releasing their direct to customer service. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core entertainment service and technology organisations that were operating under the Oath umbrella.
And of course 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 service.
Yet, Netflix stock is on the increase again, allowing the business to invest in material at levels that must mystify their rivals. And then we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was announced on January 22, 2019), proving that the AVOD business design can be feasible and quite valuable.
5G is going to conserve us all, right?
This is where I want to get in touch with the massive financial investments being made in 5G and provide my viewpoint on why 5G might well break some video business while at the same time make others.
Let's look at AT&T.
In the last 4 years AT&T has actually included 80 billion dollars of extra financial obligation 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 expert, however rather offer a viewpoint that the financial scenario for AT&T entering into its massive 5G investment cycle, while at the very same time making known their strategic effort to develop up their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something extremely different with video.
What can a service provider like AT&T do to attend to the economic capture, and the overall headwinds to the video organisation? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing the future of the video service.
It is my strong belief that common high speed mobile networks powered by 5G will release a video tsunami of traffic on the network like we have actually never ever seen before.
This will be excellent news for the PlutoTV's of the world and other innovative 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 leverage a quicker network thanks to 5G.
However, it's bad news for network operators without a strategy to monetize this additional traffic load, and obviously incumbents who are wanting to manage 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 provide low resolution mobile profiles.
Video distributors who continue to under serve their customers will quickly be at a disadvantage, and ripe for disruption, I think, from new organisation designs 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 requirement that I think will play a key function in the success of the video business is HEVC, the video codec that is now released on two billion devices. The following slide discussion supplies 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 complimentary. Nevertheless, while some in the market became preoccupied with questions around licensing and royalties, major developments have been made on the legal front, including almost every CE gadget maker consisting of HEVC playback support.
HEVC Advance waived all royalties for digital distribution of material. This implies, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the receiving device. Offered that you are delivering bits over the wire and not via a physical system 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 convenience, the companies who have actually currently done their due diligence on the royalty question, and are streaming HEVC content to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback assistance?
This is a very great and important concern and maybe the location of development around the HEVC community that is least recognized or comprehended.
Starting with in-home playback, if your users have acquired a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be nearly guaranteed that assistance for HEVC exists without any need for extra licensing or gamer upgrade.
HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video device. That's 400 million gadgets that support HEVC natively.
The data company ScientiaMobile keeps the largest dataset of network gadget access profiles by getting data from the biggest wireless operators in the world. This business reports that a whopping 78% of all iOS smart device requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in many industrialized markets, Android is still an exceptionally crucial device profile, and here the ScientiaMobile data is really encouraging with 57% of Android mobile phone demands coming from devices that support HEVC decoding.
And provided the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not necessitated. What other aspects validate the idea that HEVC will be a booster to the video company?
LiveU recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, particularly in the world of sports. And simply in Site case you have ideas 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 requirement while the only other codec utilized 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 industry?
The patterns we simply analyzed reveal that we have an ever more demanding customer who wants material that shows off the full capabilities of their seeing device, which means greater resolutions and more sophisticated video requirements like HDR. This same user is now taking in more content, which contributes to further congesting the network.
This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and developing technical tension inside incumbent service operators who are dealing with technical shifts and organisation design fracturing. Amazingly, in spite of a really clear threat to the incumbent services who are seeing video subscriber loses mounting into the numerous 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 the end of the story will be composed for some as the best of times, and for others as the worst of times.
HEVC is more than a technology enabler. It's a video requirement that is set to interfere with numerous of the conventional operators and early OTT streaming services. Not because the consumer understands the distinction between H. 264, VP9, or even HEVC, but since the customer is ending up being conscious that much better quality is possible, and as they do, they will move to the service who delivers the finest quality affordably.
At Beamr, our company believe that the evidence of our product and technology excellence need to be skilled and not just discussed. Which is why we have actually assembled the best deal that we have seen in the market where you can utilize 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 major video distributors and tech business currently encoding and distributing content in HEVC. And provided the HEVC gadget penetration and hardware support any worries about a premature relocation to HEVC are not necessitated. What other aspects confirm the concept that HEVC will be a booster to the video service?
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Written by: Mark Donnigan