Best & Worst of Times in Video Mark Donnigan Marketing Leader at Beamr
Get 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 technology company.
Good Times & Worst of Times in the Video Business Mark Donnigan Marketing Head at Beamr
Can a 4 character innovation conserve us?
This is an interesting question since there is a paradox emerging in the video service where it seems like the the very best of times for lots of, 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 before releasing their direct to consumer service. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core entertainment service and technology companies that were operating under the Oath umbrella.
And of course there isn't a reporting period that passes where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the provider organisation.
Yet, Netflix stock is on the increase once again, permitting the company to invest in material at levels that should baffle their rivals. And then 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 valuable.
5G is going to save us all?
This is where I wish to connect with the massive investments being made in 5G and provide my viewpoint on why 5G might well break some video companies while at the exact same time make others.
Let's take a look at AT&T.
So 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 short and long term financial obligation. 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 financial obligation numbers, I'm not an expert, but rather provide a perspective that the monetary circumstance for AT&T entering into its enormous 5G financial investment cycle, while at the same time making understood their strategic effort to construct 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 very different with video.
What can a service supplier like AT&T do to deal with the financial squeeze, and the overall headwinds to the video company? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on numerous minds who are evaluating 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 consumers with a much better quality experience as a result of being able to take advantage of a faster network thanks to 5G.
But, it's bad news for network operators without a strategy to monetize this additional traffic load, and of course incumbents who are hoping to manage 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 distributors who continue to under serve their clients will quickly be at a disadvantage, and ripe for disturbance, I think, from new company designs such as AVOD and the latest and most efficient video innovations.
The 4 character video technology that might save the video company.
The four character video standard that I believe will play a crucial role in the success of the video service 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 issues, something that activated advancement of an alternative codec which presumably is royalty free. While some in the market became preoccupied with questions around licensing and royalties, major developments have actually 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 indicates, HEVC encoded material that is streamed will only carry a royalty for the hardware decoder and this is already covered by the getting gadget. Offered 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 additional royalties, at least not to HEVC Advance.
Now, if it's any comfort, the business who have actually currently done their due diligence on the royalty concern, and are streaming HEVC material to customers today, consist of: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback support?
This is an excellent and important concern and maybe the area of development around the HEVC environment that is least known or comprehended.
Beginning with in-home playback, if your users have actually acquired a TELEVISION, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost 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 gadget. That's 400 million gadgets that support HEVC natively.
The information company ScientiaMobile preserves the biggest dataset of network device gain access to profiles by getting data from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smartphone requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in the majority of industrialized markets, Android is still a very crucial gadget profile, and here the ScientiaMobile information is very encouraging with 57% of Android mobile phone requests coming from devices that support HEVC decoding.
These 2 numbers are where the photo of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have major video distributors and tech companies already encoding and distributing content in HEVC. And given the HEVC gadget penetration and hardware support any worries about an early relocate to HEVC are not warranted. However, what other aspects confirm the concept that HEVC will be a booster to the video service?
LiveU recently released a report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially in the world of sports. And simply in case you have thoughts that the use of HEVC is a passing pattern en route to some alternative codec, consider 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.
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 evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the market?
The patterns we just took a look at reveal that we have an ever more requiring consumer who desires content that displays the full abilities of their viewing gadget, which implies greater resolutions and advanced video standards like HDR. But, this very same user is now consuming more material, which contributes to more congesting the network.
This customer consumption pattern is clashing with a shift from handled services to unmanaged, or OTT distribution and developing technical tension inside incumbent service operators who are facing technical shifts and organisation model fracturing. Surprisingly, in spite of a very clear danger to the incumbent services who are seeing video customer loses mounting into the hundreds of thousands over simply a few short quarters, some are continuing with the status quo even while brand-new entrants are releasing services that give the consumer 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 a technology enabler. It's a video requirement that is set to interfere with much of the conventional operators and early OTT streaming services. Not since the customer understands the difference 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 very best quality affordably.
At Beamr, our company believe that the proof of our product and technology excellence should be skilled and not simply spoken about. Which is why we have actually created the very best deal that we have actually seen in the market where you can utilize our codecs in mix 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 2 numbers are where the image of HEVC as the most sensible video requirement to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business currently encoding and distributing content in HEVC. And provided the HEVC device penetration and hardware support any worries about a premature move to HEVC are not warranted. What other factors validate the concept Learn more that HEVC will be a booster to the video organisation?
You can try Beamr's software application video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding on a monthly basis. CLICK ON THIS LINK
Written by: Mark Donnigan