Cutting Through The Hype Of HEVC (H.265)

Includes: IYW, QTEC, ROM, XLK
by: Dan Rayburn

While the next-generation video compression technology, HEVC, is a hot topic, far too many people are getting caught up in non real-world use cases, like 4K, or think HEVC is going to be adopted in short order. In reality, the mainstream market is not yet ready for HEVC, it's still a few years away, and there isn't an ROI to be achieved from being an early adopter of HEVC. (See my post from January on this topic: HEVC (H.265) Adoption Is At Least Five Years Away For Consumer Content Services)

While HEVC probably will serve as the successor to MPEG-4, many myths surround the technology and the rate at which it will be deployed. Yesterday [Tuesday], my co-worker at Frost & Sullivan, digital media Industry Manager Avni Rambhia, lead a webinar discussing the current state of HEVC products and technology, and its strategic implications in the short, mid and long term for a variety of businesses. Here were some of the key takeaways:

Myth 1: UltraHD Is An Immediate Driver for HEVC

  • Higher-end profiles of HEVC are still under development

  • True 4K source material is still hard to find (VOD or live)

  • 1 or 2 flagship UltraHD channels can be fit into today's IPTV, cable and DTH systems. A codec overhaul is neither necessary nor economical

  • 4K TV sets are still in a nascent market stage

  • Real time encoders and power-efficient decoders for 4K resolution are still a few years away

  • HDMI 2.0 is needed for the higher frame rates (40-100 fps) that many consider a fundamental aspect of 4K - this is still a year or two away

  • When HD is the new SD and UltraHD seeks to become the new HD, HEVC will be an enabler. Until then, this combination is interesting but not critical.

Reality: In the M&E space, bandwidth-limited OTT and VOD in SD and HD resolution, likely in conjunction with MPEG-DASH, is the most important short-term application for HEVC.

Myth 2: MSOs Should Upgrade from MPEG-2 to HEVC

  • AVC technology is mature enough for immediate adoption, and prices have fallen considerably across the board - making this technology far more affordable than it has been in the past

  • Encoders and decoders for HEVC are significantly more expensive than AVC products. Moreover, mature, reliable and scalable compression and transmission solutions are several years away

  • It will be some years before commercial HEVC encoders can deliver compression gains that justify disruptive investments in the technology. Until then, cutting-edge AVC encoders and technologies like switched digital video offer more cost-effective ways for better bandwidth utilization

  • Today's software-based AVC encoders can be upgraded in the field to support HEVC when the time is right, so investment is protected.

Reality: Service providers should begin to trial and test HEVC products now in preparation for potential rollout in the 2016-2018 timeframe, but AVC does offer immediate benefits in the meanwhile.

Myth 3: Many HEVC Products Will Hit The Market in 2013

  • Devil is in the details - while first-generation products are indeed being debuted in 2013, unit sales are small, content availability is minimal, revenues are uncertain, and consumer uptake remains very small

  • Many vendors, particularly vendors of encoder and decoder cores, are deeply invested in HEVC products and are either releasing or close to releasing first-generation cores in 2013. Certainly, since there are no ASIC or open source implementations of HEVC encoders and decoders as yet, companies have a significant opportunity to demonstrate expertise and breakthrough innovation in a market that is otherwise plagued by commoditization.

  • However, the end to end ecosystem is yet to fall into place for any application

Reality: Serious pilots and feasibility tests are underway, but serious, large-scale deployments are not.

Reality: Applications like video conferencing and wireless OTT will be among the first to leverage HEVC, but even those will not see mainstream adoption before late 2014.

Conclusion: Key Take-Aways and Recommendations

  • HEVC is a promising technology, but will take at least 6-8 years to mature - just as AVC is only now hitting its stride, nearly a decade after the standard was finalized

  • Large footprints of legacy MPEG-2 and AVC equipment and limited maturity of HEVC products will hinder short-term uptake

  • Encoder and decoder vendors (hardware and software) are in the thick of the battle to innovate and deliver real time, power-efficient solutions to the market

  • Vendors of other components in the end to end value chain need to be innovating now to incorporate HEVC into their product roadmaps

  • Service providers, on the other hand, need to carefully evaluate all options available to them for optimizing bandwidth, and develop an ROI-centric strategy to adopt and deploy HEVC.

We've done a lot of work at Frost & Sullivan on the topic of HEVC and in addition to three reports Avni Rambhia has already publish, we've done a lot of private research on HEVC for clients.

Disclosure: None

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