IPTV, satellite pay-TV revs surge as operators gear up for UltraHD

Joseph O'Halloran | 19-12-2013

The pay-TV market is in a state of rush as operators are engaged in aggressive plans to make best use of existing assets before the arrival of 4KTV/UltraHD services says Infonetics Research.

The analyst calculates by 2017, worldwide video service revenue in the global pay-TV market—including cable and satellite pay-TV and telco IPTV—will be worth $270 billion, a 2012-2017 CAGR of nearly 5%. It observed that the market grew in the first half of 2013 to $110 billion, a 2% year on year rise.

Looking at the performance of the respective pay-TV platforms, Infonetics said that IPTV and satellite revenue continue to rise, thanks to new subscribers and increased ARPU in the critical regions of North America and Western Europe. By contrast cable revenue market share fell primarily due to a slowdown in North American subscriber growth. In the region cable video subscribers are declining at a pace of 1.5% to 2.5% annually.

"Telco IPTV operators continue to enjoy strong growth in new subscribers and ARPU, showing that competitive providers with differentiated services can successfully steal share away from incumbent cable operators," noted Jeff Heynen, principal analyst for broadband access and pay-TV at Infonetics Research. "Whether it's an improved user interface, multiscreen video, or even DVR services, there are marked differences that have allowed telcos to grow their subscriber bases at a time when others aren't."

The research also showed that pay-TV providers are sweating their existing encoding assets as they wait for the next generation of platforms that support (high efficiency video coding (HEVC) which will reduce their current bandwidth requirements making it economically viable to support 4KTV services.

Infonetics expects the global broadcast and streaming video equipment market to decline about 9% in 2013 to $1.39 billion, then to grow through 2017, with a commensurate dip in spending on video-on-demand (VOD) playout servers in the short term. However the analyst does see a shift to spending to content delivery network (CDN) edge servers to support multiscreen and over the top (OTT) video content.

Infonetics believes these will grow at 21% CAGR from 2012 to 2017. Overall it anticipates multiscreen broadcast encoder revenue to increase slightly over the next four years as operators transition to software-only platforms and encoders with integrated transcoding.