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Continued Upside for Video Server Market

According to ABI Research, the broadcast, cable, and telco TV segments of worldwide video server markets are all growing at a healthy pace, and total revenues are expected to reach $1.5 billion in 2013.

Of the three, the telco TV market is showing the strongest investment growth, with a compound annual growth rate of 28 percent over 2007-2013. Cable will experience a CAGR of about 13.5 percent, while broadcast markets show the slowest growth at 8 percent.

"Cable, broadcast and telco TV are all highly competitive markets for video servers," says ABI Research industry analyst Zippy Aima.

"Cable and broadcast are the more traditional modes of entertainment for consumers, but cable providers and telcos have been quicker to adapt to market trends and to offer innovative consumer services. But to remain competitive, even the broadcast segment has tried its hand at hybrid deployments and similar initiatives."

After a slow start in North America, telco TV is now growing quickly there as it is in the rest of the industrialized world. As the latecomer to the television distribution game, telco TV has the advantage of employing the most current broadcast TV technology.

This, in part, explains the stronger growth in this segment. The hardware side of the equation is largely commoditized -- apparently vendors aim for differentiation via the accompanying software applications. At least, that's their intent.

Most video server vendors address at least two out of these three markets, and increasingly their goal is to offer an end-to-end platform. This plays to the advantage of some of the newer, larger, entrants to the market.

They have the resources to fit these servers into larger, more comprehensive solutions. However Aima notes that, "Even the smaller, more specialized video server vendors are doing well in this buoyant market."

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