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

Get the original LinkedIn article here: The Best of Times & Worst of Times in the Video Business

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Mark Donnigan is VP Marketing at Beamr, a high-performance video encoding technology company.

Are we in the good times or the worst of times in the video business? Mark Donnigan Marketing Leader at Beamr

Can a four character technology save us?
This is an intriguing concern due to the fact that there is a paradox emerging in the video business where it feels like the the best of times for numerous, however the worst of times for some.
Here we have Disney revealing that they have actually already accumulated one billion dollars in loses, and this even before 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 technology businesses that were running under the Oath umbrella.

And of course there isn't a reporting interval that goes by where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the provider company.

Netflix stock is on the rise again, permitting the business to invest in material at levels that must mystify 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), showing that the AVOD company model can be viable and quite important.

5G is going to save all of us, right?
This is where I wish to get in touch with the huge investments being made in 5G and provide my viewpoint on why 5G may well break some video business while at the exact same time make others.

Let's look at AT&T.

In the last 4 years AT&T has actually added 80 billion dollars of extra financial obligation leaving it with more than 160 billion dollars of brief and long term debt. Now, 50 billion of this shocking 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 supply a viewpoint that the financial situation for AT&T entering into its massive 5G financial investment cycle, while at the exact same time making understood their strategic effort 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 very various with video.

So what can a company like AT&T do to resolve the economic squeeze, and the total 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 examining the future of the video company.

It is my strong belief that common high speed mobile networks powered by 5G will let loose 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 be able to reach more consumers with a much better quality experience as a result of having the ability to take advantage of a quicker network thanks to 5G.

It's bad news for network operators without a plan to monetize this extra traffic load, and of course incumbents who are hoping to get by with incremental improvements to their services; such as changing from managed to unmanaged, or OTT distribution, while continuing to utilize aging video requirements like H. 264 to provide low resolution mobile profiles.

Video suppliers who continue to under serve their consumers will quickly be at a disadvantage, and ripe for disruption, I believe, from new company designs such as AVOD and the latest and most effective video innovations.
The four character video technology that may 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 devices. The following slide presentation supplies numbers relating to HEVC device penetration which deserve seeing.

There has actually been much blogged about HEVC royalty issues, something that set off advancement of an alternative codec which most likely is royalty free. Nevertheless, while some in the industry ended up being preoccupied with questions around licensing and royalties, major developments have been made on the legal front, consisting of nearly every CE gadget manufacturer including HEVC playback assistance.

For example, HEVC Advance waived all royalties for digital circulation of content. This suggests, HEVC encoded content that is streamed will just bring a royalty for the hardware decoder and this is currently covered by the getting gadget. Provided that you are delivering 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 convenience, the companies who have already done their due diligence on the royalty question, and are streaming HEVC content to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, just to call a couple of.

What about HEVC playback support?
This is a great and important question and perhaps the area of advancement around the HEVC ecosystem that is least recognized or comprehended.

Starting with at home playback, if your users have bought a TELEVISION, game console, Roku box or Apple TV in the last 3 years, you can be nearly ensured that assistance for HEVC is present without any Learn more now requirement for extra licensing or gamer upgrade.

HEVC is now resident in almost every SoC that enters to any mid to high-end CE video device. In fact, considering that 2015, market reports reveal this group of products numbers 400 million. That's 400 million devices that support HEVC natively. It's a fantastic start, however what about mobile?

The data company ScientiaMobile preserves the biggest dataset of network device gain access to profiles by getting data from the biggest wireless operators on the planet. This company reports that a tremendous 78% of all iOS smartphone requests originate from gadgets that support hardware-accelerated HEVC decoding. And though iOS gadgets are primary in many industrialized markets, Android is still an incredibly essential gadget profile, and here the ScientiaMobile information is really motivating with 57% of Android smartphone requests coming from gadgets that support HEVC decoding.

These two numbers are where the picture of HEVC as the most logical video standard to follow H. 264, starts to take shape. Here we have major video distributors and tech business currently encoding and dispersing content in HEVC. And provided the HEVC gadget penetration and hardware support any fret about a premature move to HEVC are not necessitated. What other elements verify the idea that HEVC will be a booster to the video business?

LiveU recently released a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, particularly worldwide of sports. And simply in case you have ideas that the use of HEVC is a passing pattern on the way to some alternative codec, consider that in 2018, 25% of all LiveU generated traffic was streamed utilizing the HEVC video requirement while the only other codec used was H. 264.

The report mentioned that the high HEVC usage 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.

What does this mean for the industry?
The patterns we just took a look at reveal that we have an ever more requiring consumer who desires content that flaunts the complete capabilities of their viewing device, which means higher resolutions and more advanced video requirements like HDR. This same user is now taking in more material, which contributes to additional crowding the network.

This consumer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and producing technical tension inside incumbent service operators who are dealing with technical shifts and business model fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video subscriber loses mounting into the hundreds of thousands over simply a few brief quarters, some are continuing with the status quo even while brand-new entrants are introducing services that offer the consumer more for less.

This is where completion of the story will be written for some as the finest 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 much of the traditional operators and early OTT streaming services. Not because the consumer knows the distinction in between H. 264, VP9, and even HEVC, but since the customer is realising that much better quality is possible, and as they do, they will move to the service who provides the best quality cost effectively.

At Beamr, we think that the evidence of our product and technology excellence need to be experienced and not just spoken about. Which is why we have actually created the best offer that we have seen in the industry 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 photo of HEVC as the most rational video standard to follow H. 264, begins to take shape. Here we have major video suppliers and tech business already encoding and dispersing content in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about an early relocation to HEVC are not warranted. What other factors validate the concept that HEVC will be a booster to the video organisation?


You can check out Beamr's software application video encoders today and get up to 100 hours of complimentary HEVC and H. 264 video transcoding every month. CLICK ON THIS LINK

Originally published by: Mark Donnigan

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