World Video Encoders Market to Exceed US$3.2 Billion by 2015, According to a New Report by Global Industry Analysts, Inc.

Monday, December 3rd, 2007

Digitalization is a new buzzword of modern world, which may perhaps not be viable without the proliferation of video compression technologies. Advancements in video CODECs (compression and decompression) have been the key foundations for the delivery of digital video over multiple media applications (broadcast, cable, satellite, IPTV and others).

SAN JOSE, CA — World Video Encoders market is forecast to maintain an impressive CAGR of over 22% over the 2005-2015 analysis period and exceed US$3.2 billion by 2015. Broadcast and Cable TV applications dominate the global market for Video Encoders, with a share estimated at 48.95% in 2007. In terms of growth, however, Internet Protocol Television (IPTV) is forecast to surpass all other applications for Video Encoders, with a projected CAGR of 30.65% over 2005-2015. Other applications of Video Encoders independently analyzed include Satellite TV and Enterprise & Private Networks.

The report also analyzes the world markets for IP Media Streaming Platforms and Mobile Media Streaming Platforms by geographic region.

Government decisions to give up analog broadcasting in countries such as the US, Japan, South Korea and many parts of Europe is ultimately pushing demand for video encoders. The Federal Communications Commission (FCC) in the US has mandated all broadcasters to shift to digital formats by 2009, which mean service providers need to upgrade their existing headend infrastructures with digital encoding systems for converting analog content. Similarly, in Europe, most governments have announced a switch over of analog signal to digital terrestrial television (DTT) by 2010. Further, government subsidies to consumers to support their analog-only TV sets receive digital over-the-air transmission is expected to reinforce government intentions for digital broadcasting. However, most parts of the world still operate on Phase Alternation by Line (PAL) as an analog format, which has a better resolution than NTSC (prevalent in the US). This may take a longer process for much of the world for adoption of digital formats, awaiting a similar regulation that is being mandated by FCC.

Emerging digital formats such as MPEG 4/H.264 and VC-1 are positioning their place as potential replacements for MPEG-2 in the video encoding market. Both these formats enable bit rate savings and better quality compression, attracting attention of the broadcast, cable, and wireless segments. However, end-users are still reluctant to make an immediate transition to the new formats, mainly due to their recent investments in MPEG- 2 and lack of universally accepted standards. This situation can be resolved when market matures further and the capabilities of both formats become more apparent along with the costs involved. Further, encoding vendors can combat the resistance by reiterating the good return on investment to end-users. Vendors need to integrate all formats through a modular architecture that would enable end users to upgrade to emerging formats with greater flexibility, and at minimal incremental costs.

Telcos, in quest of the triple play (voice, video, and data), are investing largely to compete with the cable companies for delivery of quality video content to the consumer. The entry of cable operators in voice stream (voice over IP) has created a major threat for telecomm operators to retain their customer base and revenue sources. To offset these challenges, most telcos are responding in a big way to offer video delivery, via a new technology called IPTV. Advanced video encoding is the most critical building block that enabled bandwidth limited telcos to deliver IP video services such as video-on-demand and IPTV over existing copper infrastructure and DSL technologies. Thus, the entry of telcos into IPTV is likely to boost demand for advanced video encoders such as H.264/AVC.

Streaming rich media across mobile and Internet networks provides an opportunity for enterprise and entertainment markets to generate revenues through video-on-demand and advertising. Wide usage of efficient compression technologies and broadband is likely to fuel the adoption rate of Streaming Platform. Media streaming platforms offer instant and in-expensive communication media for enterprise market to carryout day-to-day operations.

Major companies covered include 3ivx Technologies Pty. Ltd, Anystream, Ateme SA, Darim Vision Company Ltd., EGT, Inc., Envivio, Inc., Harmonic Inc., Harris Corp., Inlet Technologies, MainConcept AG, Modulus Video, Inc., Motorola, Inc., On2 Technologies, Inc., Optibase Ltd., Radyne Corp., RealNetworks, Inc., Rhozet Corp., Scientific Atlanta Scopus Video Networks Ltd., TANDBERG Television Ltd., Telestream, Inc., Thomson Grass Valley Systems and VBrick Systems, Inc.