The new IMS Research
report The World Market for Professional Video Encoding – 2009 Edition reveals that the industry will experience an estimated 19% annual increase in worldwide shipments during 2010, representing an 11% annual increase in revenues over 2009. This includes all broadcast encoders serving the ingest, transcode, distribution and contribution (fixed & mobile) markets. At the end of 2008, cable comprised the majority of distribution shipments followed by IPTV. This trend is expected to continue through 2014, although the CAGR for satellite is forecast to be stronger than any other platform. On the contribution side, revenues are forecast to grow by 17% through 2014 on shipment growth of 18%.
Shane Walker, research manager and author of the study, states, “Due to a general slowing in the pace of technological advancement within the industry, we expect the replacement rate for both MPEG-2 and MPEG-4 AVC (SD & HD) encoders for contribution and distribution to drop throughout the forecast. While MPEG-2 channels will continue to be upgraded to MPEG-4 AVC and JPEG 2000, they will still account for 25% of the distribution and contribution market at the end of 2014”. Walker continues “a likely area of opportunity will be encoding for web video, with data from some interviewees putting annual growth in this relatively small segment between 60% and 70%”. Two other areas IMS Research is watching include software-based encoders and camera-based encoders, both of which are expected to begin affecting the market between 2010 and 2011. Scenarios are presented in the report which demonstrate that the combined influence of these encoders could lower overall annual revenues for the industry by 9% over the next four to five years. This is due to the fact that, while software-based encoders require a maintenance agreement, they do not require equipment switch-out for upgrades. The impact from all of this on consumers will be a significant jump in new channels, including VOD, over the next two years on a worldwide basis.
This study provides detailed forecasts for the ingest, transcode, distribution and contribution encoding markets split by seven geographic regions. In addition, the market is further split by MPEG-2, MPEG-4 AVC and JPEG 2000 standards as well as broadcast platform type for distribution.