Thoughts from Streaming Media West 2015 - Part 1
Nov 30, 2015
This year's Streaming Media West was, in my perspective, all about getting down to the business of getting stuff done, and making money on online video. In terms of HEVC, there's definitely a wrench thrown in expected progress by the misguided licensing terms originally announced by HEVC Advance. They are widely expected to backpedal from terms such as revenue-based fees and uncapped device-based royalties, but the damage in terms of missing the pre-Olympics window for deployment has been done. Slow uptake of 4K services is also a factor, which has been hindered partly by a lack of infrastructure and partly by very few use cases where 4K can actually be more profitable than HD. The International Olympics Committee has in fact refrained from providing an official 4K broadcast feed citing lack of interest in licensing such a stream. That said, we are seeing HEVC continue to inch towards commercially meaningful deployments in applications outside of 4K, such as mobile OTT and contribution/primary distribution. A complete discussion of our take on the status of HEVC in 2016, including updated device projections and a synopsis of our first-ever release of HEVC revenue projections, is here.
A key finding this year is that advances in CPU technology are allowing further gains to be extracted from AVC encoders, which puts their performance at par with current HEVC implementations. Over time, as HEVC becomes more sophisticated, it is universally expected to decisively outpace AVC in efficiency. For the time being, however, these two horses are running more or less neck to neck, in our perspective. There were several other talks at the conference providing various perspectives on the relative efficiency of AVC v/s H.265, the potential role of VP9, and the future role of the Open Media Alliance. High Dynamic Range (HDR) is one of the key open issues for 4K content services. The good news is that several consortia are determined to tackle and resolve the problem. While resolution by CES 2016 is the ideal goal, we feel that a decisive solution will more likely be achieved in NAB 2016 timeframe.
Another factor that we expect will slowly but decisively disrupt the encoding/transcoding industry is the advent of unlimited cloud resources coming to bear on workflow architectures. Traditionally, much of the magic in the technology has been overcoming memory and CPU limitations to produce high-quality, high-efficiency, low-latency encoders. With IP connectivity spreading, the cloud can compensate extremely well for inefficiencies in implementation. It also allows computation to be cheaply thrown at a complex compression algorithm, for high compression in tandem with low latency. Over time, the implications of an IT-centric approach on video compression are very likely to shift the balance of power and traditional mode of approach in our industry.
We will continue to provide objective, trustworthy guidance on HEVC technology deployment. If you are currently subscribed to our Digital Media research program, we've recently published an in-depth analysis of HEVC forecasts and market landscape here. There are also several public insights on topics such as RoI from HEVC in various use cases, collectively listed here.
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