Are we in the good times or the bad times in the video business? 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.

Good Times & Bad Times in Video Services Mark Donnigan Vice President Marketing at Beamr

Can a 4 character innovation conserve us?
This is an interesting question because there is a paradox emerging in the video service where it seems like the the finest of times for numerous, however the worst of times for some.
Here we have Disney announcing that they have already accrued one billion dollars in loses, and this even before launching their direct to consumer organisation. And after that we have Verizon Media revealing sweeping layoffs which represent an exit from a few of the core home entertainment service and technology companies that were operating under the Oath umbrella.

And of course there isn't a reporting interval that passes where the cable cutting numbers haven't grown, which puts increasing pressure on the video side of the service company company.

Netflix stock is on the rise once again, permitting the company to invest in content at levels that must baffle their rivals. 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), proving that the AVOD business design can be practical and quite important.

5G is going to conserve us all?
This is where I want to get in touch with the massive financial investments being made in 5G and offer my perspective on why 5G might well break some video business while at the very 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 debt leaving it with more than 160 billion dollars of short and long term financial obligation. 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 point of view that the monetary circumstance for AT&T entering into its huge 5G financial investment cycle, while at the same time making understood their tactical 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 really different with video.

So what can a company like AT&T do to deal with the financial capture, and the overall headwinds to the video organisation? Such as declining pay TELEVISION subs, and fragmenting OTT service offerings. This is the concern on lots of 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 have actually never ever seen prior to.
This will be good 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 a result of being able to take advantage of a quicker network thanks to 5G.

However, it's bad news for network operators without a strategy to monetize this extra traffic load, and of course incumbents who are intending to manage 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 deliver low resolution mobile profiles.

Video suppliers who continue to under serve their consumers will rapidly be at a drawback, and ripe for interruption, I believe, from new business designs such as AVOD and the most recent and most efficient video technologies.
The 4 character video innovation that might conserve the video service.
The four character video requirement that I think will play a crucial function in the success of the video service is HEVC, the video codec that is now released on two billion devices. The following slide discussion provides numbers concerning HEVC device penetration which are worth seeing.

There has been much written about HEVC royalty concerns, something that activated advancement of an alternative codec which most likely is royalty free. However, while some in the market ended up being preoccupied with questions around licensing and royalties, major advancements have actually been made on the legal front, consisting of almost every CE device maker consisting of HEVC playback support.

HEVC Advance waived all royalties for digital distribution of material. This indicates, HEVC encoded content that is streamed will just carry a royalty for the hardware decoder and this is currently covered by the receiving gadget. Supplied that you are delivering bits over the wire and not The Best of Times & Worst of Times in the Video Business by means of a physical mechanism such as Blu-ray Disc, your business will not have to pay any additional royalties, a minimum of not to HEVC Advance.

Now, if it's any comfort, the companies who have currently done their due diligence on the royalty question, and are streaming HEVC material to consumers today, consist of: Amazon, Comcast, DirecTV, Dish Network, Netflix, Sky, Sony, Vudu, Vodafone, and Orange, simply to name a few.

What about HEVC playback support?
This is a great and essential concern and perhaps the area of development around the HEVC ecosystem that is least recognized or understood.

Starting with in-home playback, if your users have actually purchased a TELEVISION, video game console, Roku box or Apple TV in the last 3 years, you can be almost guaranteed that assistance for HEVC is present without any requirement for extra licensing or gamer upgrade.

HEVC is now resident in almost every SoC that goes in to any mid to high-end CE video device. That's 400 million devices that support HEVC natively.

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

And provided the HEVC device penetration and hardware support any concerns about an early move to HEVC are not required. What other factors confirm the concept that HEVC will be a booster to the video company?

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

In reality, the report specified that the high HEVC use was a direct reflection on the increasing need for professional-grade video quality, a trend that was plainly apparent at the 2018 FIFA World Cup in Russia.

What does this mean for the market?
The trends we simply examined expose that we have an ever more demanding customer who wants material that shows off the complete capabilities of their seeing device, which suggests higher resolutions and advanced video requirements like HDR. However, this exact same user is now taking in more content, which adds to further crowding the network.

This consumer usage pattern is colliding with a shift from managed services to unmanaged, or OTT circulation and creating technical tension inside incumbent service operators who are dealing with technical shifts and company design fracturing. Amazingly, in spite of an extremely clear hazard to the incumbent services who are seeing video subscriber loses installing into the numerous thousands over just a few short quarters, some are continuing with the status quo even while brand-new entrants are releasing services that give the consumer more for less.

This is where completion of the story will be composed for some as the best 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 interfere with numerous of the traditional operators and early OTT streaming services. Not since the customer understands the difference between H. 264, VP9, and even HEVC, however due to the fact that the customer is becoming aware that much better quality is possible, and as they do, they will move to the service who provides the very best quality cost effectively.

At Beamr, we believe that the proof of our product and innovation excellence should be experienced and not just spoken about. Which is why we've put together the very best offer that we have actually 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 nearly every SoC that goes in to any mid to high-end CE video gadget. These two numbers are where the picture of HEVC as the most sensible video requirement 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 given the HEVC gadget penetration and hardware support any concerns about an early move to HEVC are not warranted. What other elements confirm 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 monthly. CLICK ON THIS LINK

Author: Mark Donnigan

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