Skip to main content

Traditional Pay-TV Providers Can't Find VOD Upside

Last year, in the fall, the U.S. cable TV service providers decided to work together -- in an unprecedented collaboration effort -- to promote their collective Video-on-Demand (VoD) offerings. They agreed to invest $30 million in an advertising campaign, and they created a dedicated web site (which is now redirected to a Facebook page).

If there was increasing pay-TV subscriber interest in their offering, then they would have increased their share of the growing on-demand video market. So, what was the outcome? Across the whole U.S. market, to date about 10,000 people say they "like" the Movies on Demand brand.

Clearly, this experiment demonstrates that the traditional pay-TV sector has a very tough road ahead -- as more and more people's video entertainment needs shift away from the channel-centric pay-TV model.

Infonetics Research earlier this month released its fourth quarter 2010 (4Q10) Cable, Satellite, and IPTV Video Infrastructure and Subscribers market share and forecast report. The results are very telling.

The overall video infrastructure market was impacted by yet another decline in video-on-demand and streaming content server sales in the quarter -- as well as a slowdown in digital cable and satellite middleware sales, which are tied directly to set-top box sales.

Digital cable and satellite STB sales declined this quarter, particularly in North America -- as net subscriber growth over the last few quarters has been weak.

North American video infrastructure showed the greatest overall decline in the quarter, dropping 7 percent, after two straight quarters of revenue increases.

"North American MSOs and telco IPTV operators slowed their purchases of VOD servers as they continue to struggle with slow uptake of pay VOD programming," notes Jeff Heynen, directing analyst for broadband access at Infonetics Research.

Highlights of the latest Infonetics market study include:

- Worldwide video infrastructure revenue sequentially dipped 3 percent to $836 million in 4Q10.

- Worldwide video encoder revenue increased 10 percent and topped the $100 million mark in 4Q10, representing the third consecutive quarter of growth for MPEG-2 encoders and renewed efforts among cable operators to expand their HD channel lineups.

- Concurrent leads the worldwide video-on-demand and streaming content server market for revenue in 4Q10, followed by ZTE, SeaChange, and Cisco, as Huawei drops from the top 5.

- Operators aren't generating as much revenue from pay video-on-demand services as they would like (much of the unicast video traffic is free or is for subscription services such as HBO, Showtime, and Starz), explaining why cable operators want to be allowed to offer first-run movies earlier, as that would allow them to charge more per movie.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Why Cloud-Native is The Future of IT Spending

The leading organizations that create a digital transformation plan will gain the most from their use of public cloud computing. However, some CIO and CTO leaders still struggle with how to build a modern cloud migration strategy. The worldwide cloud computing Infrastructure as a Service (IaaS) market grew 41.4 percent in 2021, to a total of $90.9 billion -- that's up from $64.3 billion in 2020, according to the latest market study by Gartner. "The IaaS market continues to grow unabated as cloud-native becomes the primary architecture for modern workloads," said Sid Nag, vice president and analyst at Gartner . Cloud IaaS Market Development Cloud supports the scalability and composability that advanced technologies and applications require, while also enabling enterprise leaders to address emerging needs such as sovereignty, data integration, and enhanced customer experience. In 2021, the top five IaaS providers accounted for over 80 percent of the market. Amazon AWS conti

Private 5G Networks and Enterprise Wi-Fi Converge

The global enterprise wireless networking market is evolving. Driven by a desire to take advantage of the available 6 GHz communications spectrum, with greatly improved broadband throughput and latency rates, more organizations may choose to adopt Wi-Fi 6E technologies. According to the latest worldwide market study by ABI Research, shipments of Wi-Fi 6E access points and routers will rise from 1.5 million units in 2022 to 5.2 million units by 2024. Wireless spectrum expansion is just one facet of the commercial wireless network market transition, as the technology of Wi-Fi customer premise equipment will be upgraded once again with Wi-Fi 7 (IEEE 802.11be standard) devices. Enterprise Wireless Network Market Development "The adoption of Wi-Fi 7 access points will accelerate following the protocols standardization in 2024, and just two years later, most 6 GHz enabled access point shipments will be supporting Wi-Fi 7," said Andrew Spivey, industry analyst at ABI Research . Anot