The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan VP Marketing 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 innovation company.

The Video Business is in the Best of Times or the Worst of Times? Mark Donnigan VP Marketing at Beamr

Can a 4 character innovation conserve us?
This is an interesting concern because there is a paradox emerging in the video service where it feels like the the very best of times for many, but the worst of times for some.
Here we have Disney revealing that they have currently accumulated one billion dollars in loses, and this even prior to introducing their direct to customer organisation. And then we have Verizon Media revealing sweeping layoffs which represent an exit from some of the core home entertainment service and technology companies that were running under the Oath umbrella.

And naturally there isn't a reporting interval that passes where the cord cutting numbers have not grown, which puts increasing pressure on the video side of the service provider business.

Netflix stock is on the rise once again, allowing the company 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 (offer was revealed on January 22, 2019), showing that the AVOD service design can be feasible and quite important.

5G is going to save us all?
This is where I desire to link with the enormous investments being made in 5G and offer 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 added 80 billion dollars of additional debt leaving it with more than 160 billion dollars of short and long term financial obligation. 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 expert, but rather provide a perspective that the monetary situation for AT&T entering into its massive 5G financial investment cycle, while at the exact same time making understood their strategic effort to build up 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 various with video.

So what can a provider like AT&T do to resolve the economic squeeze, and the general headwinds to the video business? Such as decreasing pay TV subs, and fragmenting OTT service offerings. This is the question on many minds who are evaluating the future of the video organisation.

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've 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 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 extra traffic load, and obviously incumbents who are wanting to manage with incremental enhancements to their services; such as switching from managed to unmanaged, or OTT circulation, while continuing to utilize aging video requirements like H. 264 to provide low resolution mobile profiles.

Video suppliers who continue to under serve their clients will rapidly be at a drawback, and ripe for disruption, I think, from new business designs such as AVOD and the most recent and most effective video innovations.
The four character video innovation that may conserve the video organisation.
The four character video requirement that I believe will play an essential function in the success of the video service is HEVC, the video codec that is now deployed on two billion gadgets. The following slide discussion supplies numbers concerning HEVC gadget penetration which are worth seeing.

There has been much discussed HEVC royalty concerns, something that activated development of an alternative codec which probably is royalty free. However, while some in the market ended up being preoccupied with questions around licensing and royalties, significant developments have actually been made on the legal front, including nearly every CE gadget manufacturer consisting of HEVC playback assistance.

For example, HEVC Advance waived all royalties for digital distribution of material. This suggests, HEVC encoded content that is streamed will only carry a royalty for the hardware decoder and this is already covered by the receiving device. Provided that you are providing bits over the wire and not by means of a physical system such as Blu-ray Disc, your company will not have to pay any extra royalties, a minimum of 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 content to consumers today, include: Amazon, Comcast, DirecTV, Meal Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to name a couple of.

What about HEVC playback assistance?
This is an excellent and important question and perhaps the location of development around the HEVC ecosystem that is least recognized or understood.

Starting with in-home playback, if your users have acquired a TV, video game console, Roku box or Apple TV in the last 3 years, you can be nearly ensured that support for HEVC exists without any requirement for extra licensing or player upgrade.

HEVC is now resident in nearly every SoC that goes in to any mid to high-end CE video gadget. In reality, considering that 2015, market reports reveal this group of items numbers 400 million. That's 400 million devices that support HEVC natively. It's a terrific start, however what about mobile?

The information business ScientiaMobile keeps the biggest dataset of network device access profiles by receiving data from the largest cordless operators worldwide. This business reports that a whopping 78% of all iOS smartphone requests originate from devices that support hardware-accelerated HEVC decoding. And though iOS devices are primary in many developed markets, Android is still an incredibly crucial device profile, and here the ScientiaMobile information is very motivating with 57% of Android smart device demands coming from gadgets that support HEVC decoding.

These 2 numbers are where the image of HEVC as the most rational video standard to follow H. 264, starts to take shape. Here we have significant video suppliers and tech business already encoding and dispersing material in HEVC. And provided the HEVC gadget penetration and hardware support any fret about a premature transfer to HEVC are not warranted. But, what other elements confirm the idea that HEVC will be a booster to the video business?

LiveU just recently published a report called 'State of Live' that showed growing trends in HEVC broadcasting, especially in the world of sports. And just in case you have thoughts that using HEVC is a passing pattern on the method to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed utilizing the Site HEVC video standard while the only other codec utilized 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 trend that was plainly evident at the 2018 FIFA World Cup in Russia.

So what does this mean for the market?
The patterns we just examined expose that we have an ever more demanding customer who wants material that displays the full abilities of their viewing gadget, which implies greater resolutions and advanced video requirements like HDR. But, this very same user is now consuming more material, which contributes to additional crowding the network.

This customer usage pattern is colliding with a shift from managed services to unmanaged, or OTT distribution and creating technical tension inside incumbent service operators who are dealing with technical shifts and company model fracturing. Remarkably, in spite of a very clear risk to the incumbent services who are seeing video customer 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 offer the customer more for less.

This is where the end of the story will be composed for some as the finest 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 disrupt much of the traditional operators and early OTT streaming services. Not because the customer understands the distinction between H. 264, VP9, or perhaps HEVC, however since the customer 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, we believe that the proof of our product and technology excellence should be skilled and not simply discussed. Which is why we have actually assembled the very best deal that we have actually seen in the market where you can use our codecs in combination with our VOD transcoder, 100% for totally free.

HEVC is now resident in practically every SoC that goes in to any mid to high-end CE video device. These two 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 suppliers and tech companies currently encoding and dispersing content in HEVC. And provided the HEVC device penetration and hardware support any worries about a premature relocation to HEVC are not warranted. What other factors confirm the concept that HEVC will be a booster to the video organisation?


You can check out Beamr's software video encoders today and get up to 100 hours of totally free HEVC and H. 264 video transcoding monthly. CLICK HERE

Published by: Mark Donnigan

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