Higher video prices are revealing deeper professional demand

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 4:45

   I know this is kind of an elementary question but did you like were you surprised by how much money there is behind this? 100% we were too like we thought like we were surprised all along the way we were surprised how quickly we switched from image models to video models where like now we make I would say 50% of our revenue from video models and then after that transition we thought like video was going to completely take over right it was zero and then it reached to around like 70 70 percent of our revenue and then we thought image models are like done and it's like it's it's not it's not enough compute it's it's a simple problem and from now on it's all gonna be video and then turns out image editing models brought life back to image models and then it's also useful for video models as well because it you can create different frames and video models

2. 5:45

   does such such such better job interpolating between those frames so image editing all of a sudden made image models come back and now like our revenues 50 50 even that was surprising right like when we thought like a portion of our business was dying but it like made a huge comeback but yeah video models keep getting better yeah currently what we can do like the best video model maybe creates 10 to 12 seconds of video like the new ones are going to reach maybe like 30 seconds but until you can generate like real-time streaming very high definition video this is gonna keep increasing and as as you increase the resolution as you increase the duration the cost increases exponentially because you have to have more attention in the in the inference during inference time and the resolution increases the amount of pixels exponentially so things are

3. 6:37

   getting much more expensive so now we have a framework to think about okay there's a lot more money to be made going forward because the video output we get is still like very rudimentary. There was also like a very interesting point sometime last year when VO2 came out. I think at the time like Kling was probably one of the best video models and there was also like MiniMax and the prices were like somewhat kind of going lower.

4. 7:08

   I would say like they started at let's say 40 cents per five second video and then they sort of settled around there maybe like 30 cents for a five second like clip and then VO2 was very surprisingly it was like five dollars per a five second video so it jumped like you know more than 10x and we were like okay like who the heck is gonna pay the pay all this money right like this is just another five-second video turns out like there is essentially infinite demand so people people started using that model and then even more expensive models came around and people started using those models and what was really happening under the hood was we actually saw like more and more professional use cases start start happening for like ads like real you know people who are in marketing and like ads and actually like movie production they started using these models because the

5. 8:05

   quality went so much higher and there was just more demand that like other models weren't able to actually capture so it's it's like the usage is going up and then the capabilities are going up and then everything's getting more expensive over time so essentially yes like people ended up spending so much more money and and and in terms of progress it's still happening like we're nowhere near, you know, with LLMs, I think people talk a lot about hitting a wall or like diminishing returns. I think in this side of the market, we're like nowhere near actually hitting like diminishing returns. I think there's just so much new stuff happening with like Seedense V2 and V2.5.

6. 8:50

   It's just like the quality is going up, prices are going up, and people still want to use all these models. For sure. I mean, do you guys remember Sora? Yeah. Feels like it was a lifetime ago. I mean, that was a really cool moment, but clearly too expensive. Yeah, it was too expensive. Like, in fact, we saw, we also hosted Sora on our platform and like we saw huge growth in the like last three months before they decided to like take it down. We were like, what's happening? Like, there's like infinite volume here, essentially. But yeah, it turns out, you know, the rumor is like there wasn't enough compute for everything else. And it's also expensive to run. So yeah, but I think it had a great future. Maybe it'll come back sometime.