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February 18, 2015

Production trends for 2015: Demand for multi-format content drives video requirements

by: Todd Smoots
Senior Production Manager

When people get nostalgic about the simpler times of yesteryear, they could certainly count the video production business as one of their examples. The history of Hollywood includes innovations like the introductions of sound and Technicolor, where a producer could anticipate having at least a decade or so to recoup their investments in production technology. The shelf life for today’s video formats, such as 3DTV, can be considerably shorter.  

Looking ahead, we shouldn’t expect the risks of investing in production gear for a particular video format to diminish any time soon. As TV Technology’s Gary Arlen observed in his recap of the 2015 International Consumer Electronics Show, “skirmishes over format and technology will continue indefinitely."* Those skirmishes include what Arlen describes as “the Ultra HD juggernaut,” where the chances for having 4K UHDTV become a widely adopted format are being threatened by such emerging alternatives as advanced 4K, 8K and High Dynamic Range (HDR) imaging.

In the early days of video, movie theaters represented the only major distribution platform. That’s quite a contrast to the video marketplace of today, where viewers can access professional and user-generated content delivered across multiple content delivery solutions. Today’s production considerations must take into account delivering a quality of experience (QoE) that is consistent on a myriad of media devices ranging from 60” home theater displays to a 5.2” screen on a smartphone. According to the Consumer Electronic Association’s (CEA) latest data, the most widely used video devices include TVs, with a 97% household penetration, followed by DVD players (81%), laptop computers (66%) and smartphones (64%).**

On the content delivery front, the areas that bear the most watching include the increased use of smartphones for watching video content and the role of TV Everywhere in converging the worlds of MVPDs (multichannel video programming distributors) and OVDs (online video distributors). With respect to the outlook for mobile video, Cisco estimates a compound annual growth rate (CAGR) of 66% between now and 2019, with video streaming amounting to 90% of total mobile data traffic.

How will these trends affect the video production market?

For one, they help to underscore the market drivers for a “lease versus buy” for the more expensive elements of video production, such as sound stages, broadcast cameras and post production suites. Roughly a decade ago, five studios were responsible for creating 90% of the country’s video content, making it easier for them to gain a ROI on their equipment investments. In today’s video marketplace, which has fostered the emergence of a vibrant independent production community, there is no assurance that individual producers can recover their investments in cutting edge video gear, such as 4K cameras, before a newer format becomes the norm. Studios, production and post facilities represent a “lease” alternative, where the costs for technology investments are shared across a number of clients.

Additionally, the TV Everywhere ecosystem requires a multiplatform content delivery strategy. For the same reason advertisers must use integrated ad campaigns in order to reach viewers across TV, online and mobile platforms, video producers require multiplatform consumption in order to achieve the scale needed for monetizing their video content. In order to engage viewers, it must be distributed in a manner that helps to ensure a consistent QoE that reflects favorably on the brand regardless of the format, the delivery network and the viewing device. Achieving this level of quality can often require transcoding, content management and video monitoring solutions that provide the level of quality assurance not found in highly commoditized services “in the cloud.”

Compared to the 20th Century, the video marketplace has met with much greater turbulence as we navigate our way through the rapidly evolving digital age.  Finding the right partner helps to address these challenges while enjoying a smoother, safer and surer pathway toward financial success.

 

*“CES Augers New Video Landscape,” TV Technology, February 4, 2015

**“HPA 2015: Consumer Electronics Update,” TV Technology, February 11, 2015