Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is VP Marketing for Beamr, a high-performance video encoding innovation company.
The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Leader at Beamr
Can a four character innovation conserve us?
This is an interesting question due to the fact that there is a paradox emerging in the video company where it feels like the the best of times for numerous, but the worst of times for some.
Here we have Disney announcing that they have already accumulated one billion dollars in loses, and this even before introducing their direct to consumer company. And then we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology businesses that were operating under the Oath umbrella.
And of course there isn't a reporting period that passes where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the company organisation.
Netflix stock is on the rise again, allowing the business to invest in material at levels that must baffle their competitors. 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), proving that the AVOD organisation design can be practical and quite important.
5G is going to save us all, right?
This is where I wish to get in touch with the massive investments being made in 5G and offer my perspective on why 5G may well break some video business while at the same time make others.
Let's take a 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 debt. Now, 50 billion of this shocking 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 expert, but rather offer a perspective that the financial scenario for AT&T going into its huge 5G financial investment cycle, while at the exact same time making known their tactical initiative to develop their video service capacity through Warner Media direct to customer offerings like HBO, and DirecTV, is going to be challenged, unless they do something really different with video.
So what can a service company like AT&T do to address the economic capture, and the overall headwinds to the video business? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on lots of minds who are analyzing the future of the video company.
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 have actually never ever seen prior to.
This will be excellent 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 better quality experience as an outcome of being able to take advantage of 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 improvements to their services; such as switching from handled to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to deliver low resolution mobile profiles.
Video suppliers who continue to under serve their clients will quickly be at a downside, and ripe for disturbance, I believe, from brand-new company designs such as AVOD and the most recent and most effective video technologies.
The four character video technology that might conserve the video service.
The 4 character video requirement that I think will play a key role in the success of the video business is HEVC, the video codec that is now deployed on two billion devices. The following slide presentation supplies numbers concerning HEVC device penetration which are worth seeing.
There has actually been much written about HEVC royalty concerns, something that activated advancement of an alternative codec which presumably is royalty free. While some in the industry became preoccupied with concerns around licensing and royalties, major advancements have been made on the legal front, consisting of nearly every CE device producer including HEVC playback assistance.
For instance, HEVC Advance waived all royalties for digital circulation of content. This implies, HEVC encoded content that is streamed will only carry a royalty for the hardware decoder and this is already covered by the receiving gadget. Provided that you are delivering bits over the wire and not through a physical system such as Blu-ray Disc, your company will not have to pay any extra royalties, at least not to HEVC Advance.
Now, if it's any comfort, the business who have currently done their due diligence on the royalty concern, and are streaming HEVC content to consumers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to call a couple of.
What about HEVC playback support?
This is an excellent and crucial question and perhaps the area of advancement around the HEVC community that is least known or understood.
Starting with in-home playback, if your users have actually bought a TV, game console, Roku box or Apple TV in the last 3 years, you can be nearly guaranteed that support for HEVC is present without any requirement for additional licensing or player upgrade.
HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video device. In truth, since 2015, market reports reveal this group of products numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a terrific start, but what about mobile?
The data company ScientiaMobile preserves the biggest dataset of network device gain access to profiles by receiving information from the largest cordless operators worldwide. This business reports that a whopping 78% of all iOS smart device demands originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in many developed markets, Android is still an extremely essential device profile, and here the ScientiaMobile information is very motivating with 57% of Android smart device requests coming from devices that support HEVC decoding.
And provided the HEVC gadget penetration and hardware support any concerns about a premature relocation to HEVC are not warranted. What other factors validate the concept that HEVC will be a booster to the video company?
LiveU recently released a The Best of Times & Worst of Times in the Video Business report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially worldwide of sports. And just in case you have thoughts that using HEVC is a passing trend en route to some alternative codec, consider that in 2018, 25% of all LiveU produced traffic was streamed utilizing the HEVC video requirement while the only other codec utilized was H. 264.
The report mentioned that the high HEVC use was a direct reflection on the increasing demand for professional-grade video quality, a trend that was plainly apparent at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The trends we simply analyzed expose that we have an ever more demanding consumer who wants material that displays the full abilities of their seeing gadget, which indicates greater resolutions and advanced video requirements like HDR. However, this exact same user is now consuming more content, which adds to further crowding the network.
This customer usage pattern is hitting a shift from handled services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are dealing with technical shifts and company design fracturing. Amazingly, in spite of an extremely clear hazard to the incumbent services who are seeing video customer loses mounting into the hundreds of thousands over simply a couple of short quarters, some are continuing with the status quo even while new entrants are introducing 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 requirement that is set to disrupt many of the standard operators and early OTT streaming services. Not because the customer knows the distinction in between H. 264, VP9, or perhaps HEVC, but since the customer is becoming conscious that much 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 evidence of our product and innovation quality should be experienced and not simply spoken about. Which is why we have actually created the best deal that we have actually seen in the market where you can utilize our codecs in mix with our VOD transcoder, 100% free of charge.
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 photo of HEVC as the most rational video requirement to follow H. 264, begins to take shape. Here we have significant video distributors and tech business currently encoding and distributing content in HEVC. And given the HEVC gadget penetration and hardware support any worries about an early relocation to HEVC are not necessitated. What other aspects confirm the concept 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 each month. CLICK HERE
Originally published by: Mark Donnigan