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.