It is an exciting era for the video industry. Consumers' demands for high image quality constantly push the improvement of resolution. It started from standard definition (SD) to high definition (HD), and now is shifting to ultra-HD (UHD). At the same time, both high dynamic range (HDR) and high frame rate (HFR) are playing a key role in the next-generation of video innovation. When combined with ultra-high resolution, they can bring an exponential improvement to image quality. The emergence of VR even shifts the traditional two-dimensional video experience to 3D and provides the ultimate immersive experience.
Huawei iLab, the ultra-broadband (UBB) network innovation lab, has found that 82% of consumers are willing to pay an extra 10% to 30% for higher-quality video content. This willingness maintains and even boosts the video service dividends. In fact, videos have entered the communication and vertical industries. Besides entertainment videos, other videos have also entered people's daily life and become the basic medium for information in this digital era. To be specific, the market space of entertainment videos is estimated at USD 650 billion, and the estimation for video communication is USD 18 billion. However, in vertical industries, ubiquitous video services will bring USD 350 billion market space.
Video– is also redefining the communication industry. For operators, video services are essential. As the new basic service type, video services are creating exponential market space, making it a necessity for operators to perform well in this field. Judging from recent years, operators who develop video services have had rapid growth. In North America, revenue from video-on-demand (VOD) is 50% higher than that from cinemas. In Europe, the proportion of Quad Play users of a Spanish operator exceeds 50%. In Asia Pacific, the annual growth rate of IPTV users has reached 71%. Particularly in China, there are over 100 million IPTV users. The number of new users in 2016 alone exceeds the total number of users from the past ten years. By June 2017, there are 65 operators worldwide (Telcos & MSOs) who have deployed UHD (4K) video services.
It took the industry at least 5 years to make HD content available on mainstream platforms and low-cost HD TVs available for purchases at stores. From this perspective, the first wave of UHD videos has come especially fast. According to Huawei Market Insight statistics, the number of 4K live channels has increased globally from 95 in 2016 to 121 in 2017. The FIFA World Cup 2018 will be streamed on-demand on 16 4K channels, and the PyeongChang Olympic Winter Games will also be streamed in 4K. In 2016, only 44% of movie companies supported 4K movies, this percentage reached 70% in 2017, almost doubling the 4K movie database. The global ownership of 4K TVs increased 82.5% from 2016 to 2017, and the ownership of 4K STBs doubled.
However, the video industry has a complex ecosystem. With the development of video technologies, more industry partners will become involved. To enable the continuous development and prosperity of the video industry, industry chain breakpoints need to be considered and solutions prepared.
Breakpoint 1: Broadcast networks still lack UHD content. To resolve this breakpoint, all-IP production and broadcast standards need to be implemented, and the All-IP Network Production and Broadcast solutions need to mature.
Breakpoint 2: The collaboration between content producers and content distributors is insufficient, which means that high quality 4K productions need to be priced lower than their actual value in order to gain sufficient sales. The 30 Mbps bandwidth requirement for OTT content transmission can rarely be achieved. The price of 4K cinema projection equipment is still very high. Most 4K Hollywood movies end up being presented in 2K when they are distributed to cinemas or video operators.
Breakpoint 3: The industry does not have unified standards to evaluate video experience. Such standards are required to guide the planning, construction, and optimization of networks, offering the ultimate viewing experience for consumers.
The entire ecosystem needs to collaborate to resolve these breakpoints with wisdom and effort. However, the final decision is in consumers' hands. If the industry can provide a large quantity of UHD content and implement ubiquitous UBB networks, video experience will be consistently improved as technologies develop. Only then will the dividends of the video industry increase continually.
