The transformative impact of IP video distribution on pay-TV networks and the move towards cloud-centric architectures will drive continued growth in video infrastructure sales worldwide, according to US firm Synergy Research Group.
The company estimates that the video infrastructure market reached US$ 32bn in 2011, and predicts that it will growth by more than 7% per year over the next five years to reach US$ 45bn in 2016.
While revenues from client hardware and software segment (comprised primarily of set-top boxes, residential gateways and associated software) are expected to remain relatively flat at around US$ 14bn per year, particularly strong growth will be seen in content management and distribution (comprising content delivery networks, media data centres and content management related software), which will surge to become a US$ 23bn market by 2016.
Revenue from professional services related to video infrastructure is also likely to show strong growth, according to Synergy, while the content acquisition and preparation segment will grow by a steady 5% per year.
Two big trends are expected to drive the growth in infrastructure sales over the forecast period – transformation of a relatively mature pay-TV market, and a surge in OTT services.
“Clearly the biggest event in this market recently is Cisco’s acquisition of NDS,” said Jeremy Duke, founder and Chief Analyst of Synergy Research Group. “The price was high but you can see the rationale. Cisco was already a market leader with 18% video infrastructure market share; the addition of NDS boosts this to 21% by adding revenues and customers in some key market segments.
“It also significantly expands what Cisco can offer to telcos and to cable operators looking to migrate their traditional cable head ends to data centre and cloud architectures — which we believe is a multi-billion dollar market in transition.”