TV Everywhere reshaping the pay-TV content protection market

The boundaries between different content protection technologies are being blurred as a result of the TV Everywhere initiatives being driven by pay-TV operators in many markets, according to a new report from Frost & Sullivan.

The study adds that the pay-TV content protection market is thriving thanks to the ongoing digitisation of cable in emerging markets and continued investment in advanced applications and ‘TV Everywhere’ offerings.

Content protection solutions (whether conditional access or digital rights management) are believed to have generated revenues of US$ 1.63bn in 2011 and are forecast to reach US$ 2.6bn in 2016.

“As over-the-top (OTT) content consumption grows, many are rushing to sound the death knell for pay-TV as we know it – and, by extension, the content protection industry,” said Avni Rambhia, Senior Industry Analyst for Digital Media at Frost & Sullivan.

“The truth is that consumer demand worldwide for pay-TV content remains strong, although the ‘bring your own device’ (BYOD) revolution is forever changing the way video content is delivered and consumed.”

Both CAS and DRM segments are described as flourishing, with South East Asia and Latin America continuing to see rapid deployment of new pay-TV services, with digital cable and IPTV in particular adding to market momentum.

“A key challenge in major markets is falling average selling prices, particularly in the smart-card based CAS segment which accounts for the vast majority of total market revenues,” remarked Rambhia.

“There is a growing trend of providing CAS systems at little to no cost when bundled with a total head-end and customer premise equipment (CPE) contract, making it extremely challenging for standalone CAS vendors to innovate and grow.”

Vertical integration is a widely adopted strategy to combat cost pressures while maintaining sustainable profit margins, in turn driving a wave of acquisitions, says Frost & Sullivan.

“With consistent TV experiences across managed and unmanaged devices becoming a competitive necessity, content protection solutions are evolving,” concludes Rambhia.

“Multi-rights DRM systems and cardless CAS clients are playing an increasingly important role in the ecosystem, both to enable TV everywhere and also to combat unrelenting cost pressures.”

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