HD, digital content boost video, ad insertion demand

| 31 July 2014

The global adoption of video and ad insertion servers is set to escalate as broadcasters and operators migrate to digital networks in an effort to cater for growing demand for digital content, in particular high definition and video-on-demand (VOD) services.

According to the analysis from Frost & Sullivan, the Global Video and Ad Insertion Server Market report, this trend towards dynamic ad insertion is helping to monetise investments in interactive and on-demand services and has meant that the market earned revenues of $1.32 billion in 2013. F&S expects this figure to reach $2.33 billion in 2019 as major events, such as the Olympics and the FIFA World Cup, are increasingly recorded in HD and UltraHD. The consequent shortening of the sales cycles for digital media technology is fuelling the uptake of digital equipment, including video server systems.

"Personalised and interactive services such as VOD have further transformed the way consumers watch television," commented Frost & Sullivan Digital Media Research Analyst Aravindh Vanchesan. "The advent of advanced capabilities such as pausing live TV and catching up TV, networked personal video recorders and interactive advertising is widening this global market scope."

Yet despite what it described as "immense" potential, the analyst warned that the popularity of the Internet as an advertising avenue might eat into the advertising dollars of broadcasters, in turn, affecting their ability to budget for technology. It suggested that broadcast television providers may also be forced to operate on the linear ad-insertion model, where all TV sets receive the same commercial regardless of individual preferences. This curbs the need for video and ad insertion servers.

"As vendors look for opportunities in this intensely competitive space, mergers and acquisitions will gain pace," Vanchesan added. "While the video server market witnessed significant consolidation among vendors over the last five years, the highly fragmented ad cable segment, as well as the telecommunication and broadcast segments will witness strong M&A activity during the forecast period."