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Profitable Personalized Video Advertising

The telco television headend equipment market is expected to grow substantially over the next five years, according to the latest study by In-Stat.

This growth, driven by the expansion of video channels, the introduction of high-definition (HD) content, and the continued adoption of on-demand services will position telco operators to pursue highly-profitable personalized advertising and converged services business models, the high-tech market research firm says.

"For operators to generate significant profitability from telco TV and related video services, they must find ways for the network to add value," says Keith Nissen, In-Stat analyst.

This will dictate finding solutions to the challenges faced with personalized advertising, converged video services, and ultimately the integration of network and Web-based applications.

The In-Stat research covers the worldwide market for Telco TV and headend equipment. It tracks the development of the worldwide telco TV market, and examines its evolution to personalized ads, multi-screen, and web-based services.

It also provides updated product and revenue forecasts for headend equipment segments, including broadcast content processing, on-demand, content security, and middleware by region and headend size.

The research discusses the need to migrate telco TV functions from a centralized headend to an architecture where quality of service (QoS)-related functions and storage of selected content are distributed to the edge and access networks.

In-Stat's market study found the following:

- The telco TV headend equipment market will grow to over US$ 700 million by 2012.

- The upgrade to MPEG-4 encoding was strong during 2007 and 2008.

- Increasingly, headend functionality will be distributed to the edge and access network.

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