IPTV add-ons driving surge in pay-TV middleware

DetailsJoseph O'Halloran | 19 February 2015

The growing tendency of satellite, cable and terrestrial providers to add an IPTV element to their offerings has delivered a welcome boost to pay-TV middleware says Frost & Sullivan.

In its Global Pay TV Middleware Market report, the analyst suggests that service providers are being forced to reinvent themselves to offer highly personalised content and value-added services in order to support the new self-selection consumption models that characterise the viewing habits of today.

Frost & Sullivan added that the surge in Internet protocol (IP)-enabled video consumption devices such as smart TVs, smartphones and tablets was compelling pay-TV middleware solution providers to deliver a unified multiscreen experience to viewers.

Yet it cautioned that rising subscriber churn and a high demand for over-the-top (OTT) subscriptions have put tremendous pressure on existing pay-TV operator business models. To alleviate this satiation it argued that highly interactive, flexible consumption models that leverage OTT as an opportunity instead of a threat are expected to come to the fore, fuelling the need for advanced pay-TV middleware solutions globally. Indeed Frost & Sullivan asserted that by adopting agile open source middleware, pay-TV providers could better compete with the OTT ecosystem. Already, it added, the middleware market earned revenues of $1.05 billion in 2014 and this is likely to reach $2.03 billion by 2020.

"Pay-TV middleware vendors will need to be extremely nimble and focus on providing agile solutions that allow service providers to compete with OTT services," explained Frost & Sullivan digital media industry analyst Hiral Jasani. "They must direct attention towards open source middleware, as this has proven to be a successful strategy for middleware vendors and operators alike."

The analyst predicts that operator partnerships with advanced search and recommendation providers are gaining pace and will eventually change the landscape for pay-TV middleware solution providers. Jasani noted that the market has already seen a flurry of acquisitions such as that of Microsoft Mediaroom by Ericsson, Conax by NAGRA, and NDS by Cisco Systems in order to leverage the huge potential of consumer video delivery services.