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Video cloud service is a video streaming media service based on cloud computing technology. In the video cloud service process, videos collected by content providers are encoded into specific formats and uploaded to cloud servers. After transcoding in the cloud, they are distributed to terminal devices via a content distribution network for accelerated delivery. Terminal devices decode these streams and enable playback. In a video cloud computing system, cloud servers provide computing power to handle applications and transmit the application's running results to terminal devices in real-time as audio/video streams. Terminal devices only need to provide network capabilities, video decoding capabilities, and human-computer interaction capabilities to complete the decoding and playback of audio/video. Video cloud service providers use features such as elastic scalability, pay-as-you-go, and rapid launch to lower the entry barriers for the online video industry, helping enterprises in the video field to provide high-quality video services to end-users at low cost and high efficiency.
The market segmentation of IaaS, PaaS, and SaaS is clear.
Video cloud service providers offer video cloud services at three levels: IaaS, PaaS, and SaaS to downstream customers. The PaaS layer mainly provides general video capabilities, typically targeting customer groups whose core business is video. Customers customize and optimize according to their business needs. The SaaS layer is relatively standardized, providing ready-to-use video software, which is more suitable for customer groups with weaker IT development capabilities or whose video business is not a core business. The demands of customers from different industries vary greatly, and SaaS vendors tend to provide relatively standardized video software applications for specific vertical scenarios to meet the deep integration needs of industry customers with video businesses. IaaS focuses on providing infrastructure services such as computing, networking, storage, and CDN to help video enterprise users quickly launch videos. The three levels of IaaS, PaaS, and SaaS correspond to different service models, and most video cloud service providers are positioned in different business areas based on their core competitive capabilities, business expansion needs, and customer group advantages. Generally speaking, large internet companies like Tencent and Alibaba have a large customer base, strong technical strength, and wide business coverage. Their video cloud businesses are mostly deployed at the IaaS and PaaS layers to provide comprehensive services to downstream customers; traditional video service providers such as PolyV and CC Video have been deeply involved in the video field for many years, familiar with video application solutions for various scenarios, and often choose to focus on the SaaS layer to fully leverage their own advantages. The market concentration of the PaaS layer in video cloud services is expected to increase. As customers value the resources and technical strength of vendors, vendors that excel in resource and technology fields are expected to continue consolidating their advantageous positions. Many small and medium-sized PaaS vendors face the risk of being eliminated by the market, and opportunities for new entrants are even more limited. SaaS layer services focus on scenario-based applications, and SaaS vendors usually concentrate on specific niche areas, competing with each other within their respective niches.
China Video Cloud Industry Chain
Source: Drawn by LeadLeo Research Institute
The demand from the massive downstream user base is expected to be unleashed.
The downstream of the video cloud industry chain consists of demand-side entities, mainly including enterprises and governments. Among them, enterprise demand is the largest. Video cloud services offer many advantages such as convenience, scalability, high performance, and low cost, which have a strong attraction for video enterprises. At present, more than 50% of Chinese enterprises have already started contacting or using cloud services. The market scale of industries such as online education, live streaming events, and game streaming is continuously growing, with a massive explosion in video consumption. The demand for cloud storage, distribution, etc. continues to rise, making the attractiveness of video cloud enduring. In 2017, the total number of small and medium-sized enterprises registered with the national industrial and commercial authorities exceeded 70 million, accounting for over 97% of Chinese enterprises. The public cloud demand from the vast number of small and medium-sized enterprises has not been fully released, and the future growth potential of video public clouds focused on video solutions is enormous. From the government perspective, China has a large base of various government agencies. With the acceleration of informatization, the demand to use new technologies to improve government management capabilities is continuously rising. Customized cloud computing services can provide a good infrastructure platform for government agencies, helping them reduce management costs and improve efficiency. Video cloud services can build one-stop video cloud service platforms for government agencies, providing services such as meeting systems, video promotion, government video resource storage, and organization. Through technology, they can automate publicity and office work, enhance administrative management capabilities, and contribute to the advancement of the national 'Internet+' policy.
The huge demand for video applications provides an excellent opportunity for the development of video cloud.
Internet video applications have evolved from online videos to include pan-entertainment live streaming, new forms such as online education, online healthcare, radio and television new media, and government affairs new media. They are continuously penetrating into traditional industries, with deeper integration with sectors like education, finance, e-commerce, media, and healthcare. Videoization has become a development trend for various industries, and 'various scenarios + video elements' have become the norm of industry application development. According to data from the China Internet Information Center, as of December 2018, the user base of online video in China reached 612 million people, with mobile network video users reaching 590 million people, both exceeding a penetration rate of over 70%, indicating that users have developed a habitual use of video applications. In 2018, the market size of China's video content industry exceeded 201.6 billion yuan, a year-on-year increase of 39.1%. Among them, the short video market size exceeded 11.8 billion yuan, a year-on-year increase of 106.0%; the pan-entertainment live streaming market size reached 63.02 billion yuan, a year-on-year increase of 92.8%. The increasing demand for video elements by internet applications has generated a large demand for video traffic. User needs under different application scenarios are gradually diversifying, with higher demands for video quality, authenticity, and engagement. Users' expectations for low latency, zero lag, and instant opening on the first screen are also increasing, prompting video service providers to demand more specialized cloud services. The evolution from video collection, video processing (codec), video transmission, and video storage to advanced needs such as video intelligent analysis and video interaction has led to service demands that are not met by existing standard cloud service platforms. Video enterprises are more urgently seeking specialized video cloud services, and video cloud services that can meet diverse and high-quality needs are gradually favored by video enterprises, providing good opportunities for the development of the video cloud industry.
Video Cloud Service Application Areas
Source: Drawn by LeadLeo Research Institute
The intelligentization level of video cloud applications is gradually deepening.
The internet video volume has seen explosive growth, and the video industry has also faced strong regulation. Issues such as vulgarity, violence, gore, and pornography in video content have once again drawn attention. Simple manual review methods can no longer adapt to the high placement situation of internet videos. However, artificial intelligence technology can play an important role in video content review, analysis, and scenario-based integration. It can reduce manual review costs, improve review efficiency, and accuracy. Video cloud service providers can achieve intelligent operation and maintenance and products by utilizing artificial intelligence technology, thereby opening up more new value-added services and launching new features such as video content review, video content understanding, and video content editing. At present, the application proportion of artificial intelligence in video cloud services is relatively low, and related technologies and application scenarios still need further exploration and development. However, considering that the application of artificial intelligence technology will bring about improvements in the efficiency of video cloud services, highlight the value of video cloud services, and enhance user experience, it can be predicted that the integration degree between video cloud and artificial intelligence will gradually deepen. Currently, many video cloud service providers have gradually deployed AI applications in the cloud. For example, Tencent Cloud launched the "Mingmou" solution, which is based on Tencent's audio and video AI technology and combined with Tencent Cloud's live streaming, on-demand, interactive live streaming and other cloud products to provide customers with services such as voice-to-text conversion, audio pornography identification, and real-time subtitles. The "Mingmou" solution has been implemented and applied in scenarios such as online court trials, WeChat mini-programs for insurance claims settlement, and video retrieval, receiving good market feedback. Alibaba Cloud further utilizes artificial intelligence technology to assist the development of the video industry. Starting from customers' needs for intelligent video review, video content understanding, intelligent video editing, and video copyright protection, it has launched six major functions including video tagging, voice pornography identification, intelligent first picture, face recognition, video fingerprinting, and security review, opening up AI + video capabilities to customers and enhancing the value of customers using video cloud services.
With the widespread penetration of video applications across various industries, the integration of video cloud with these industries is deepening, especially in the pan-entertainment scenario. Traditional industries such as broadcasting and television, security, healthcare, and government affairs have strong demand for video content and possess significant market development potential. In recent years, the pan-entertainment, broadcasting and media industries have become the main customers of the video cloud service market, occupying a large share of the market. As of the end of 2018, these three industries together accounted for 80.0% of the market share in the video cloud service industry, leading the development of the market.
