Video Server Revenue Lags In 2013: Infonetics

Global Haul To Dip 9% As Pay-TV Providers ‘Sweat’ Legacy Gear Ahead of 4K Renaissance

For vendors that make broadcast and streaming video gear, the Ultra HD era can’t get here soon enough.

Global revenue in this broad category will dip 9%, to $1.39 billion, in 2013, before getting back on track and heading out on a growth surge through 2017, Infonetics said in a new report that sizes up the market.

"Pay-TV providers are sweating their existing encoding assets as they wait for the next generation of platforms that support HEVC (high efficiency video coding) so they can reduce current bandwidth requirements while preparing for ultra-definition TV, such as 4K," Jeff Heynen, Infonetics’ principal analyst for broadband access and pay TV, said in a statement. "Demand for contribution encoders among broadcasters will remain steady through 2017, with increases in spending due to the long-term transition to support HEVC and newer video formats."

The emerging HEVC compression scheme will be about 50% more efficient than H.264/MPEG-4. Service providers are expected to jump on the HEVC wave as they look for ways to deliver 4K and mobile video services without gobbling up more bits than necessary.

Heynen said edge servers that populate content delivery networks (CDNs) for the delivery of over-the-top and multiscreen video are set to grow at a 21% compound annual growth rate from 2012 to 2017. Spending for VOD playout servers, meanwhile, will decline in the short term, Heynen said, noting that pay-TV providers will continue to lean on those legacy assets while they shift spending to CDN edge servers.

Vendors tracked in the report included Alcatel-Lucent, Anevia, Arris, Ateme, Cisco Systems, Concurrent Computer Corp., Digital Rapids, Edgeware, Elemental Technologies, Envivio, Ericsson, Harmonic, Huawei, RGB Networks, Seawell, Thomson, XOR Media, and ZTE, and others.