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.
Good Times & Worst of Times in Video Services Mark Donnigan Marketing Head at Beamr
Can a four character technology save us?
This is an intriguing question because there is a paradox emerging in the video service where it feels like the the best of times for lots of, however the worst of times for some.
Here we have Disney announcing that they have actually currently accumulated one billion dollars in loses, and this even prior to introducing their direct to consumer company. And then we have Verizon Media announcing sweeping layoffs which represent an exit from some of the core home entertainment service and innovation organisations that were operating under the Oath umbrella.
And of course there isn't a reporting period that goes by where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider service.
Yet, Netflix stock is on the rise once again, permitting the business to purchase content at levels that need to mystify their rivals. And after that we have news of PlutoTV selling for a mouth watering $340 million dollars in money to Viacom (offer was revealed on January 22, 2019), showing that the AVOD business model can be feasible and rather important.
5G is going to conserve us all?
This is where I wish to get in touch with the enormous investments being made in 5G and offer my point of view on why 5G may well break some video business while at the 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 additional 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 outcome 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 offer a viewpoint that the financial scenario for AT&T entering into its enormous 5G financial investment cycle, while at the very same time making understood their strategic initiative to develop their video service capacity through Warner Media direct to consumer offerings like HBO, and DirecTV, is going to be challenged, unless they do something very various with video.
What can a service provider like AT&T do to address the financial squeeze, and the total headwinds to the video organisation? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on lots of minds who are evaluating the future of the video business.
It is my strong belief that ubiquitous high speed mobile networks powered by 5G will unleash a video tsunami of traffic on the network like we have actually never seen prior to.
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 having the ability to utilize a much faster network thanks to 5G.
However, it's bad news for network operators without a strategy to monetize this additional traffic load, and of course incumbents who are intending to get by with incremental improvements to their services; such as switching from handled to unmanaged, or OTT circulation, while continuing to use aging video standards like H. 264 to provide low resolution mobile profiles.
Video suppliers who continue to under serve their customers will quickly be at a disadvantage, and ripe for interruption, I think, from brand-new service designs such as AVOD and the latest and most effective video technologies.
The four character video technology that might conserve the video service.
The four character video standard that I think will play a crucial function in the success of the video company is HEVC, the video codec that is now deployed on 2 billion gadgets. The following slide presentation provides numbers regarding HEVC gadget penetration which deserve seeing.
There has been much discussed HEVC royalty issues, something that set off advancement of an alternative codec which probably is royalty totally free. While some in the industry became preoccupied with questions around licensing and royalties, major developments have been made on the legal front, including nearly every CE device producer including HEVC playback support.
For instance, HEVC Advance waived all royalties for digital distribution of material. This implies, HEVC encoded material that is streamed will just carry a royalty for the hardware decoder and this is currently covered by the getting device. Provided that you are delivering bits over the wire and not via 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 convenience, the companies who have already done their due diligence on the royalty concern, and are streaming HEVC content to customers today, include: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just among others.
What about HEVC playback support?
This is an excellent and important concern and maybe the location of development around the HEVC community that is least known or understood.
Beginning with in-home playback, if your users have actually acquired a TV, game console, Roku box or Apple TELEVISION in the last 3 years, you can be almost ensured that assistance for HEVC exists with no requirement for extra licensing or player upgrade.
HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. That's 400 million gadgets that support HEVC natively.
The data company ScientiaMobile preserves the largest dataset of network gadget gain access to profiles by receiving information from the biggest wireless operators in the world. This business reports that a tremendous 78% of all iOS mobile phone demands come from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in many developed markets, Android is still an extremely important device profile, and here the ScientiaMobile data is extremely encouraging with 57% of Android mobile phone requests originating from devices that support HEVC decoding.
These 2 numbers are where the picture of HEVC as the most logical video requirement to follow H. 264, begins to take shape. Here we have major video distributors and tech companies currently encoding and dispersing material in HEVC. And given the HEVC gadget penetration and hardware support any worries about a premature relocate to HEVC are not warranted. But, what other aspects validate the idea that HEVC will be a booster to the video organisation?
LiveU just recently released a report called 'State of Live' that revealed growing trends in HEVC broadcasting, especially worldwide of sports. And just in case you have ideas that the use of HEVC is a passing pattern en route to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed using the HEVC video standard while the only other codec used was H. 264.
The report specified that the high HEVC usage was a direct reflection on the increasing need for professional-grade video quality, a pattern that was plainly evident at the 2018 FIFA World Cup in Russia.
What does this mean for the market?
The patterns we simply examined reveal that we have an ever more demanding consumer who desires material that displays the full abilities of their viewing gadget, which implies greater resolutions and more sophisticated video standards like HDR. However, this very same user is now taking in more content, which adds to additional crowding the network.
This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and creating technical stress inside incumbent service operators who are dealing with technical shifts and business design fracturing. Surprisingly, in spite of a very clear hazard to the incumbent services who are seeing video subscriber loses mounting into the numerous thousands over just a few brief quarters, some are continuing with the status quo even while new entrants are launching services that provide the customer more for less.
This is where completion of the story will be written for some as the best of times, and for others as the Learn more now worst of times.
HEVC is more than a technology enabler. It's a video requirement that is set to interrupt much of the standard operators and early OTT streaming services. Not due to the fact that the customer knows the distinction in between H. 264, VP9, or even HEVC, but because the consumer is ending up being aware that better quality is possible, and as they do, they will move to the service who delivers the very best quality affordably.
At Beamr, our company believe that the evidence of our item and innovation excellence must be skilled and not simply discussed. Which is why we've created the very best deal that we have actually seen in the market where you can utilize our codecs in combination 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 device. These 2 numbers are where the picture of HEVC as the most logical video standard to follow H. 264, begins to take shape. Here we have significant video distributors and tech companies already encoding and dispersing material in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about a premature move to HEVC are not required. What other factors validate the concept 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 totally free HEVC and H. 264 video transcoding on a monthly basis. CLICK HERE
Originally published by: Mark Donnigan