The Best of Times & Worst of Times in the Video Business Mark Donnigan Marketing Head at Beamr

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

Best of Times & Bad Times in Video Services Mark Donnigan Marketing Leader at Beamr

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

And obviously there isn't a reporting period that passes where the cord cutting numbers haven't grown, which puts increasing pressure on the video side of the service supplier company.

Yet, Netflix stock is on the rise once again, allowing the company to purchase material at levels that need to bewilder their competitors. 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 design can be viable and quite valuable.

5G is going to save us all, right?
This is where I want to link with the huge financial investments being made in 5G and supply my perspective on why 5G might well break some video companies while at the same time make others.

Let's look at AT&T.

In the last 4 years AT&T has actually included 80 billion dollars of additional debt leaving it with more than 160 billion dollars of brief and long term debt. 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 debt numbers, I'm not an expert, but rather provide a point of view that the monetary situation for AT&T going into its enormous 5G financial investment cycle, while at the exact same time making known their tactical effort 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 really various with video.

So what can a company like AT&T do to deal with the economic capture, and the general headwinds to the video company? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the question on many minds who are examining the future of the video company.

It is my strong belief that ubiquitous high speed mobile networks powered by 5G will let loose a video tsunami of traffic on the network like we've never ever seen prior to.
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 an outcome of being able to take advantage of a faster network thanks to 5G.

It's bad news for network operators without a strategy 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 standards like H. 264 to deliver low resolution mobile profiles.

Video distributors who continue to under serve their clients will rapidly be at a downside, and ripe for disruption, I think, from brand-new business models such as AVOD and the most recent and most effective video innovations.
The 4 character video innovation that might conserve the video organisation.
The 4 character video requirement that I think will play a key role in the success of the video business is HEVC, the video codec that is now released on 2 billion gadgets. The following slide discussion supplies numbers regarding HEVC gadget penetration which deserve seeing.

There has actually been much composed about HEVC royalty issues, something that activated advancement of an alternative codec which probably is royalty complimentary. While some in the market ended up being preoccupied with questions around licensing and royalties, major advancements have been made on the legal front, including nearly every CE device producer consisting of HEVC playback assistance.

For instance, HEVC Advance waived all royalties for digital distribution of content. This suggests, HEVC encoded material that is streamed will only bring a royalty for the hardware decoder and this is currently covered by the receiving device. Supplied that you are providing bits over the wire and not through a physical mechanism such as Blu-ray Disc, your business will not need to pay any extra royalties, at least not to HEVC Advance.

Now, if it's any comfort, the companies who have actually currently done their due diligence on the royalty question, 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 an excellent and crucial question and maybe the area of advancement around the HEVC ecosystem that is least recognized or understood.

Starting with at home playback, if your users have bought a TV, video game console, Roku box or Apple TV in the last 3 years, you can be almost guaranteed that support for HEVC is present with no need for additional licensing or player upgrade.

HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video gadget. In fact, given that 2015, industry reports show this group of items numbers 400 million. That's 400 million gadgets that support HEVC natively. It's a terrific start, however what about mobile?

The data company ScientiaMobile preserves the biggest dataset of network device access profiles by receiving data from the biggest cordless operators on the planet. This business reports that a tremendous 78% of all iOS smartphone requests come from gadgets that support hardware-accelerated HEVC decoding. And though iOS devices are predominant in a lot of industrialized markets, Android is still an incredibly essential gadget profile, and here the ScientiaMobile information is very encouraging with 57% of Android mobile phone demands originating from gadgets that support HEVC decoding.

And given the HEVC gadget 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 service?

LiveU recently published a report called 'State of Live' that revealed growing patterns in HEVC broadcasting, particularly on the planet of sports. And just in case you have ideas that using HEVC is a passing pattern en route to some alternative codec, consider that in 2018, 25% of all LiveU created traffic was streamed utilizing the HEVC video standard while the only other codec utilized was H. 264.

In reality, 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 clearly evident at the 2018 FIFA World Cup in Russia.

So what does this mean for the industry?
The patterns we simply analyzed expose that we have an ever more demanding customer who wants content that reveals off the full abilities of their viewing device, which means higher resolutions and advanced video requirements like HDR. This same user is now taking in more material, which contributes to further congesting the network.

This customer intake pattern is hitting a shift from managed services to unmanaged, or OTT circulation and producing technical stress inside incumbent service operators who are facing technical shifts and service design fracturing. Remarkably, in spite of a really clear risk to the incumbent services who are seeing video subscriber loses mounting into the numerous thousands over simply a couple of short quarters, some are continuing with the status quo even while new entrants are introducing services that offer the consumer more for less.

This is where the end of the story will be written for some as the very best 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 interfere with many of the standard operators and early OTT streaming services. Not because the customer knows the difference between H. 264, VP9, or even HEVC, however click here since the consumer is ending up being mindful that better quality is possible, and as they do, they will move to the service who provides the best quality affordably.

At Beamr, we think that the evidence of our product and innovation quality must be knowledgeable and not simply talked about. Which is why we have actually put together the finest offer that we have actually seen in the market where you can use our codecs in mix with our VOD transcoder, 100% free of charge.

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 image of HEVC as the most sensible video requirement to follow H. 264, begins to take shape. Here we have major video suppliers and tech business already encoding and distributing material in HEVC. And offered the HEVC gadget penetration and hardware support any concerns about a premature relocation to HEVC are not necessitated. What other aspects verify the concept that HEVC will be a booster to the video organisation?


You can experiment with Beamr's software video encoders today and get up to 100 hours of free HEVC and H. 264 video transcoding every month. CLICK ON THIS LINK

Originally published by: Mark Donnigan

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