Best of Times & Worst of Times in Video Mark Donnigan Marketing Head at Beamr
Read the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business
Mark Donnigan is Vice President of Marketing for Beamr, a high-performance video encoding technology company.
The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan Marketing Leader at Beamr
Can a four character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video company where it feels like the the best of times for lots of, however the worst of times for some.
Here we have Disney revealing that they have actually already accrued one billion dollars in loses, and this even prior to 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 home entertainment service and technology services that were running under the Oath umbrella.
And obviously there isn't a reporting interval that goes by where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service company company.
Yet, Netflix stock is on the rise once again, permitting the business to purchase content 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 announced on January 22, 2019), proving that the AVOD company model can be feasible and quite valuable.
5G is going to conserve us all?
This is where I want to connect with the enormous financial investments being made in 5G and provide my point of view on why 5G may well break some video business while at the same time make others.
Let's look at AT&T.
So in the last four years AT&T has added 80 billion dollars of additional financial obligation leaving it with more than 160 billion dollars of brief 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 debt numbers, I'm not an expert, however rather offer a viewpoint that the monetary situation for AT&T entering into its enormous 5G investment cycle, while at the same time making understood their strategic effort 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.
What can a service supplier like AT&T do to deal with the economic squeeze, and the overall headwinds to the video service? Such as decreasing pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on many 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 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 ingenious 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.
However, it's bad news for network operators without a plan 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 managed to unmanaged, or OTT circulation, while continuing to use aging video standards like H. 264 to provide low resolution mobile profiles.
Video distributors who continue to under serve their clients will rapidly be at a disadvantage, and ripe for interruption, I believe, from new company models such as AVOD and the newest and most efficient video innovations.
The 4 character video innovation that might conserve the video organisation.
The 4 character video requirement that I think will play an essential role in the success of the video company is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide discussion offers numbers concerning HEVC device penetration which deserve seeing.
There has actually been much discussed HEVC royalty concerns, something that triggered advancement of an alternative codec which probably is royalty totally free. While some in the industry ended up being preoccupied with concerns around licensing and royalties, major developments have actually been made on the legal front, consisting of nearly every CE gadget producer consisting of HEVC playback assistance.
For example, HEVC Advance waived all royalties for digital circulation of content. This implies, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is already covered by the getting device. Provided that you are providing bits over the wire and not via a physical system such as Blu-ray Disc, your company will not need to pay any additional royalties, a minimum of 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 content to customers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply among others.
What about HEVC playback support?
This is a very great and important question and maybe the area of advancement around the HEVC ecosystem that is least known or comprehended.
Starting with in-home playback, if your users have actually purchased a TV, video game console, Roku box or Apple TV in the last 3 years, you can be nearly ensured that assistance for HEVC is present with no 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. Because 2015, market reports reveal this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a great start, but what about mobile?
The data company ScientiaMobile preserves the largest dataset of network device gain access to profiles by receiving data from the largest wireless operators on the planet. This business reports that a tremendous 78% of all iOS smartphone requests come from devices that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of industrialized markets, Android is still an exceptionally important device profile, and here the ScientiaMobile data is very encouraging with 57% of Android smartphone requests coming from devices that support HEVC decoding.
And given the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not called for. What other elements validate the concept that HEVC will be a booster to the video organisation?
LiveU just recently published a report called 'State of Live' that showed growing patterns in HEVC broadcasting, particularly on the planet of sports. And just in case you have ideas that using HEVC is a passing trend on the method 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 truth, 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 plainly evident at the 2018 FIFA World Cup in Russia.
So what does this mean for the industry?
The patterns we just analyzed reveal that we have an ever more requiring consumer who desires content that flaunts the full abilities of their viewing gadget, which implies higher resolutions and advanced video requirements like HDR. This exact same user is now taking in more content, which contributes to additional congesting the network.
This customer consumption pattern is colliding with a shift from managed services to unmanaged, or OTT circulation and developing technical stress inside incumbent service operators who are dealing with technical shifts and service design fracturing. Amazingly, in spite of a very clear risk to the incumbent services who are seeing video customer loses mounting into the numerous thousands over simply a few short quarters, some are continuing with the status quo even while brand-new entrants are introducing services that provide the customer 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 a technology enabler. It's a video standard that is set to interrupt much of the standard operators and early OTT streaming services. Not because the customer understands the difference between H. 264, VP9, or perhaps HEVC, however because the consumer is ending up being aware that better quality is possible, and as they do, they will migrate to the service who provides the finest quality economically.
At Beamr, we think that the proof of our item and technology excellence should be knowledgeable and not simply talked about. Which is why we have actually put together the very best offer that we have seen in the industry where you can utilize our codecs in mix with our VOD transcoder, 100% free of charge.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. These 2 More Info numbers are where the picture of HEVC as the most rational video requirement to follow H. 264, starts to take shape. Here we have major video distributors and tech business currently encoding and distributing content in HEVC. And given the HEVC gadget penetration and hardware support any worries about a premature relocation to HEVC are not warranted. What other aspects verify the idea that HEVC will be a booster to the video business?
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Published by: Mark Donnigan