Generic hardware, virtualisation drive down video equipment prices

DetailsJoseph O'Halloran | 10 January 2015

The global broadcast and streaming video equipment market looks to be on a secular decline according to a new industry report from Infonetics Research.

2014-Infonetics-Broadcast-Streaming-Video-and-Subs-Mkt-Fcst-2nd-Edition-ChartThe analyst found in its latest Broadcast and Streaming Video Equipment and Pay TV Subscribers report, found that the cost of encoding and transcoding platforms continues to come down, pressuring video and broadcast equipment revenue. It calculated that global broadcast and streaming video equipment revenue decreased 4% to $810 million in the first half of 2014 with nearly all product segments down.

Looking at how long this would keep happening, Infonetics principal analyst for broadband access and pay-TV Jeff Heynen said that this was a long-term trend. "[The price drop is] pressuring video and broadcast equipment revenue as pay-TV providers move to generic hardware platforms and, ultimately, network functions virtualisation (NFV) rather than dedicated platforms," Hymen said. "[This shift] that will keep video revenue from growing more significantly, despite the fact that pay-TV providers must fundamentally alter their video processing environments to support linear, over-the-top (OTT) and multiscreen content that continues to grow exponentially."

Indeed the report also found that sales of video-on-demand (VOD) playout servers rose 20% in the first half of 2014 compared with the second half of 2014 as operators in China and the Middle East continue to drive spending. In addition, Infonetics forecasts content delivery network (CDN) edge server revenue to grow at a CAGR of 14% from 2013 to 2018, and multiscreen broadcast encoders are expected to grow moderately