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HD Drives Big Telco Investment in Pay-TV

The telco TV market is quickly adding new deployments and subscribers, which is boosting headend equipment sales as each deployment requires at least one headend system, according to In-Stat.

Growth in the ranks of subscribers means more revenue from license, service, and support fees for vendors of middleware, content protection, and on-demand platforms, the high-tech market research firm says.

"As more headends are built, the market for broadcast TV content-processing equipment will turn from newly built headends to headend upgrades," says Michelle Abraham, In-Stat analyst. "Many of these upgrades will be the addition or replacement of encoding equipment as more channels are added and encoding technology improves. The launch of new HD channels will be a driving factor for additional encoding equipment."

The research report entitled "Telco TV Headends Moving to the Upgrade Phase" covers the worldwide market for telco TV headends. It provides forecasts for number of new headends and for revenue from middleware, content protection, broadcast content processing, and on-demand equipment by region through 2011, as well as analysis of major markets.

In-Stat's market study found the following:

- The worldwide telco TV headend market will reach $732 million in 2011.

- Broadcast content processing equipment revenue will stagnate, while middleware, content protection, and on-demand content will continue to rise.

- A video-on-demand (VOD) service has become a requirement for many telcos when they deploy telco TV, which has improved the market for on-demand equipment vendors.

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