Pay-TV Video Encoders Market – Growth Prospects

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Pay-TV Video Encoders Market – Growth Prospects Meghali Sharma, Research Associate Digital Media Information & Communication Technologies Frost & Sullivan August 11, 2009 [email protected]

Transcript of Pay-TV Video Encoders Market – Growth Prospects

Page 1: Pay-TV Video Encoders Market – Growth Prospects

Pay-TV Video Encoders Market – Growth Prospects

Meghali Sharma, Research Associate

Digital Media

Information & Communication Technologies

Frost & Sullivan

August 11, 2009

[email protected]

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Agenda

• Overview of Frost & Sullivan Encoders-Transcoders Market Coverage, 2009

• Introduction to the Pay-TV Video Encoders Market

• Competitive Landscape

• Industry Challenges

• Market Drivers

• Market Restraints

• Growth Trends

• Market & Technology Trends

• Growth Opportunity

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Overview of Frost & Sullivan Encoders-Transcoders Market Coverage, 2009

Applications:

Real time streaming, multicasting, video-on-demand

Applications:

Distribution, Video-on-demand,

Applications:

Contribution, Distribution, DTT (digital terrestrial television),

Others (archiving, mastering, redundancy)

Customer Segments:

Enterprise: Corporate, Government, Hospitality, etc.

Internet: Web Portals, Broadcasters, Service Providers

etc.

Mobile: Telco Service Providers, Web Portals, Content Providers

Customer Segments:

Cable, Satellite, IPTV Service Providers

Customer Segments:Broadcasters, DTT Service

Providers

World Enterprise, Internet and Mobile Video Encoders-

Transcoders Market (to be published)

World Pay TV Video Encoders Market

(published)

World Broadcast & DTT Video Encoders Market

(published)

World Video Encoders-Transcoders Market

Source: Frost & Sullivan

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Introduction to Pay-TV Video Encoders Market

• Cable – most dominant form of pay-TV services in most countries. Several operators still use analog transmission, few digital providers have been using MPEG-2 technology. Faces stiff competition from satellite and IPTV services.

• Satellite – popularly known as DTH. Gained huge popularity in US and is in emerging phases in Middle East, Africa and Asia Pacific Regions. Capability to distribute large number of SD and HD channels.

• Internet Protocol Television (IPTV)-comparatively new as compared to the much established cable and DTH services. Add-ons are VOD, games and interactive applications.

Cable

IPTVSatellite

Pay-TV Market Segments

Source: Frost & Sullivan

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Competitive Landscape

Source: Frost & Sullivan

Company Cable Satellite IPTV

Anystream* X X X

ATEME* X

Cisco Scientific-Atlanta X X X

ComtechTV –Radyne X X

Digital Rapids* X X

EGT X X

Envivio X

Ericsson - TANDBERG Television X X X

Harmonic X X X

Harris X X

Motorola X X X

NTT X

Optibase X

Telairity X X X

Telestream* X X

Thomson Grass Valley X X X

Viewcast* X X

(*) - Companies with software solutions for Pay-TV application markets

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Economic recession has forced service providers to restrain their

capital expenditure for next 12 months

Economic recession has forced service providers to restrain their

capital expenditure for next 12 months

Strong demand for SD products in many parts of the world trends to affect the sales of their HD product

line

Strong demand for SD products in many parts of the world trends to affect the sales of their HD product

line

Unable to provide an expanded and interactive

VOD offering due to technical limitations and

are thus losing customers to cable and IPTV

operators

Unable to provide an expanded and interactive

VOD offering due to technical limitations and

are thus losing customers to cable and IPTV

operators

Economic slowdown might push governments in various countries to postpone the digital deadlines, thereby

delaying investments in digital equipment

Economic slowdown might push governments in various countries to postpone the digital deadlines, thereby

delaying investments in digital equipment

IndustryChallenges

SD Legacy to prolong HD transition

Postponem-ent of digital deadlines

Technical Limitations for DTH providers

Economic Recession

Industry Challenges

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Market Drivers

Medium-highHighHighIncreasing penetration of advanced encoding formats such as AVC in various parts of the world drive the demand for encoding equipment

3

HighHighHigh

Increase in the number of digital channels, HD

programming and launch of video-on-demand (VOD) applications are expected to drive the growth of video encoders market

2

HighHighHigh

Rising adoption of HD content drives the demand for advanced encoding systems

1

5 - 6 Years3 - 4 Years1 - 2 YearsDriverRank

Source: Frost & Sullivan

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Market Restraints

MediumMedium-highHighReduction in product prices is expected to curtail the market growth rate

4

Medium-highHighHighDelay in HD content distribution suppresses the

adoption of advanced encoding equipment

3

Medium-highHighHigh

Legacy equipment and long sales cycles restrains the growth of the video encoders market

2

HighVery highExtremely

high

Global economic slowdown restrains investments in broadcast equipment including video encoders

1

5 - 6 Years3 - 4 Years1 - 2 YearsRestraintRank

Source: Frost & Sullivan

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Growth Trends: Cable Video Encoders Market

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2009 2010 2011 2012 2013 2014 2015

Year

Revenue G

row

th R

ate

(%

)

• In 2009, the cable video encoders market is estimated to decline by 5.3 percent

• The world cable video encoders market is expected to cross $250 million in revenues by 2015

• The market will grow at a low single digit CAGR over the forecast period

• Saturated demand in U.S.; EMEA and Asia Pacific regions to grow at a higher CAGR

Source: Frost & Sullivan

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Growth Trends: Satellite Video Encoders Market

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2009 2010 2011 2012 2013 2014 2015

Year

Revenue G

row

th R

ate

(%

)

• In 2009, the satellite video encoders market is estimated to decline by 1.6 percent

• The world satellite video encoders market is expected to cross $150 million in revenues by 2015

• The market will grow at a low single digit CAGR over the forecast period

• Asia Pacific regions to show higher demand; Negligible growth in the Americas

Source: Frost & Sullivan

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Growth Trends: IPTV Video Encoders Market

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2009 2010 2011 2012 2013 2014 2015

Year

Revenue G

row

th R

ate

(%

)

• The world IPTV video encoders market is expected to cross $160 million in revenues by 2015

• Americas are to decline by nearly 14 percent in 2009; however, the total market is expected to show growth of nearly 2 percent

• EMEA and Asia Pacific regions are expected to show a higher growth rate

Source: Frost & Sullivan

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-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2009 2010 2011 2012 2013 2014 2015

Year

Revenu

e G

row

th R

ate

(%

)Growth Trends: Total Pay-TV Encoders Market

Effects of Economic Slowdown and

maturing US market

Increased uptake of pay-TV service

fuelled by HD, VOD, Advanced encoding

formats

• Decline of over 2 percent expected in 2009; recovery from 2010 onwards

• The market is expected to grow at a CAGR of over 4 percent

• Historically prices have fallen by 15-20 percent and are expected to fall further over the next 12-24 months

• Most growth expected from EMEA and Asia Pacific

Source: Frost & Sullivan

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Growth Trends: Geographic Segments – Total Market

Americas

Over $165 million in 2008

Expected CAGR of more than 2 percent

EMEA

Over $153 million in 2008

Expected CAGR of approximately 5 percent

Asia Pacific

Over $110 million in 2008

Expected CAGR of approximately 6 percent

Source: Frost & Sullivan

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Market & Technology Trends

Technology TrendsEfficient Server-based Software Solutions

Server-based software solutions will enable a service provider to conserve overall costs as well support easy upgradeability of products.

Emerging Companies: Broadcast International and Elemental Technologies

Market TrendsMergers/Acquisitions:

• Harmonic acquires Rhozet, Entone Technologies and recently, Scopus

• Tandberg Television acquired by Ericsson

� Scientific Atlanta acquired by Cisco Systems

• Thomson divests its stake in Grass Valley

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Growth Opportunity

• Increasing Penetration of High-definition (HD) content

HDTV Service Penetration (World), 2007

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

UK US France Canada Japan

Countries

Tele

vis

ion

Ho

us

eh

old

wit

h

HD

TV

(%

)

Source: Canadian Association of Broadcasters,

Frost & Sullivan

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Growth Opportunity – contd.

• Transition from MPEG-2 to MPEG-4/AVC/H.264

2006

38.3% 61.7% 43.1% 56.9%

2007

2008

58.9%41.1%

Key:

MPEG-2

MPEG-4/AVC/H.264 Source: Frost & Sullivan

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Pay-TV Operators

Growth Opportunity – contd.

• Convergence

Internet Videos

Mobile Videos

Digital Video RecordersAnd Gaming Consoles

Source: Frost & Sullivan

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Next Steps

� Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. ([email protected])1-877-GoFrost (1-877-463-7678)

� Join us at our annual Growth, Innovation, and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, September 13-16 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ(www.gil-global.com)

� Register for the next Chairman’s Series on Growth:

The CEO's Growth Team™: The CEO’s Growth Survey and its Economic

Outlook for 2010 (September 3, 2009) (http://www.frost.com/growth)

� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)

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For Additional Information

Jake Wengroff

Global Director

Corporate Communications

(210) 247-3806

[email protected]

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Sales Manager

Information & Communications Technologies

(210) 247-2460

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Research Director

Digital Media

(210) 247-3850

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