[Satellite News 07-14-10] The global video encoders market will exceed $1.0 billion by the year 2015, according to a global market report released July 13 by Global Industry Analysts (GIA).
    The report, “Video Encoders: A Global Strategic Business Report,” shows that advancements in video Codecs for compression and decompression is the primary driver of video encoder growth, delivering key foundations for the delivery of digital video over multiple media applications, including broadcast, cable, satellite and IPTV.
    North America leads the global video encoders market in generated revenue. GIA expects penetration of HD units in the market to exceed deployment of SD units by the year 2011, which may force vendors to supply low cost efficient products. GIA named ARRIS Group, Anystream, Ateme, Envivio, Harmonic, Harris Corp., International Datacasting Corp., MainConcept AG, Motorola, Cisco, Ericsson, Telestream and VBrick Systems as key players in the market.
    “Historically, video was stored as an analog signal on magnetic tape and over the time with latest technologies in place, compact disc entered the market as a digital-format replacement for analog audio and video. Currently, the ongoing digital trend is endorsing demand for the delivery of quality video at lowest possible bit rates over multiple media, and thus driving growth for video encoders … With rise in demand by broadcasters for solutions with JPEG2000, AVC and other sophisticated compression formats, HD products remain a prospective avenue for investment.” GIA analysts wrote in the report.
    Market trends such as demand for high-definition services, government regulations to convert analog broadcasts to digital ones, and fierce competition among cable, satellite and telcos for delivering value added services, are all leveraging demand for bit-efficient video encoders. However, despite the promise of the video encoders sector, GIA believes its market growth has been affected by the global financial turmoil, with commercial and government budget cutbacks, postponement of digital mandates, and pricing pressures likely to challenge short-term growth.
    “While the demand for video encoders is expected to be driven by local digital mandates, a higher risk for postponement exists in many regions due to financial constraints of broadcasters for supporting capital expenditures … The market is being challenged by the freeze on capital expenditure and investment cutbacks resulting in intense competition and increased pricing pressure,” the report said.
    Although GIA found that cable TV remains the preferred pay-TV service globally, its revenues are expected to be affected by the economic recession and limited investments by cable operators on digital equipment. Demand for satellite encoders is also likely to be affected, the analyst firm said. However, GIA cites digital mandates in Western Europe, China and other Asian regions as factors to boost growth in the market, specifically with IPTV services.   “IPTV services are also gaining considerable penetration in the Asian and European markets for offering subscribers with interactive services, capability of recording content on PVR devices, games, and VOD. The increasing demand for the services is likely to lead to adoption of sophisticated compression encoders offering superior bit savings.”