Broadcast Video Encoders: Maturing Market, Drivers
                 and Challenges



           Vidya S Nath, Senior Indu...
Agenda


•   Overview of Frost & Sullivan Encoders-Transcoders Market
    Coverage, 2009
•   Introduction to the Broadcast...
Overview of Frost & Sullivan Encoders-Transcoders Market
Coverage, 2009

                            World Video Encoders-...
Introduction to the Broadcast & DTT Video Encoders
Market




                                                     4
Digital Deadlines, Broadcast Standards and Compression Formats in Use
   (World), 2008
                                   ...
Industry Challenges

                                      Advertising Market Trends (World)

              10%
          ...
Market Restraints


                                     Broadcast Video Encoders Growth Rate (2008-2015)
                ...
Regional Trends

                               Total Broadcast Video Encoders Market: Region-wise Revenues
              ...
Market Drivers: So where is the opportunity?


 AVC/H.264, 41.7%
                                                SD, 51.2%...
Market Trends

        2006-2009:                                  Strengths:                 Weakness:
        Comtech ac...
Technology Trends


•   Ultra HD Technology from NHK Broadcasting
    UltraHD format is four times as high and four times ...
Competitive Landscape: Changes Expected

                More than 20 vendors in this market globally


Usual Suspects (Gl...
Conclusions


•   Broadcast market maturing in North America and Western Europe

•   Immediate growth expected in Asia

• ...
Next Steps


 Request a proposal for a Growth Partnership Service to support you and your
 team to accelerate the growth o...
Your Feedback is Important to Us


          What would you like to see from Frost & Sullivan?

Growth Forecasts?

Competi...
For Additional Information



                             Craig Hays
Jake Wengroff                Sales Manager
Corporate...
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Broadcast Video Encoders: Maturing Market, Drivers

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A presentation covering the Encoders market, world digital deadlines, industry challenges, market restraints, and regional trends. The presentation also describes an overview of the Frost & Sullivan Encoders-Transcoders market
coverage, 2009.

Published in: Business, Technology

Broadcast Video Encoders: Maturing Market, Drivers

  1. 1. Broadcast Video Encoders: Maturing Market, Drivers and Challenges Vidya S Nath, Senior Industry Analyst Digital Media July 23, 2009 vnath@frost.com
  2. 2. Agenda • Overview of Frost & Sullivan Encoders-Transcoders Market Coverage, 2009 • Introduction to the Broadcast & DTT Video Encoders Market • Digital Deadlines Worldwide • Industry Challenges • Market Restraints • Regional Trends • Market Drivers: So where is the opportunity? • Market Trends • Technology Trends • Competitive Landscape: Changes Expected • Conclusions • Questions 2
  3. 3. Overview of Frost & Sullivan Encoders-Transcoders Market Coverage, 2009 World Video Encoders-Transcoders Market World Broadcast & DTT Video World Pay TV Video Encoders World Enterprise, Internet and Encoders Market Market Mobile Video Encoders- (published) (published) Transcoders Market (to be published) Customer Segments: Customer Segments: Customer Segments: Broadcasters, DTT Service Cable, Satellite, IPTV Service Enterprise: Corporate, Providers Providers Government, Hospitality, etc. Internet: Web Portals, Broadcasters, Service Providers etc. Mobile: Telco Service Providers, Web Portals, Content Providers Applications: Applications: Applications: Contribution, Distribution, DTT Distribution, Video-on-demand, Real time streaming, (digital terrestrial television), multicasting, video-on-demand Others (archiving, mastering, redundancy) 3
  4. 4. Introduction to the Broadcast & DTT Video Encoders Market 4
  5. 5. Digital Deadlines, Broadcast Standards and Compression Formats in Use (World), 2008 UK – 2012; DVB-T; China– 2015; Hong Kong – 2012; MPEG-2 and H.264 DMB-T/H; DMB-T/H; MPEG-2 MPEG-2/H.264 Czech Republic – 2010; DVB-T; MPEG-2 Canada – 2011; ATSC; MPEG-2 and H.264 United States; 2009; ATSC; MPEG-2 and Italy– 2012; DVB-T; Japan– 2011; H.264 MPEG-2 and ISDB-T; H.264 MPEG-2 Mexico – 2022; ATSC; MPEG-2, H.264/MPEG-4 Malaysia– 2015; DVB-T; MPEG-4/H.264 Brazil – 2016; ISDB-T; Key: H.264/MPEG-4, AVC Country name; Digital Deadline Year; Broadcast Standard; South Africa– 2011; DVB-T; Australia – 2013; DVB-T; Compression format in use H.264/MPEG-4 MPEG-2 and H.264 Source: Frost & Sullivan 5
  6. 6. Industry Challenges Advertising Market Trends (World) 10% • Economic Recession: advertising revenues 5% decline- major cost Growth Rate 0% restructuring 2005 2006 2007 2008 2009 2010 2011 2012 -5% -10% • Likely Postponement of Digital Deadlines -15% Source: Internet Sources such as Year Adage.com, PWC; Frost & Sullivan • Promising HD Demand; but Media Companies Growth Rate (Quarterly) challenged by the standard 15% definition legacy 10% 5% 0% Ad revenue for Network TV from top 100 leading -5% advertisers, (U.S.,) 2008 -10% Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 $26.71 Bn Source: Adage.com Source: Internet Sources & Annual Reports of companies such as Disney and News Corp. 6
  7. 7. Market Restraints Broadcast Video Encoders Growth Rate (2008-2015) 10.0% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 Growth Rate -10.0% -20.0% -30.0% -40.0% Year Source: Frost & Sullivan Legacy equipment and long sales cycles External Restraint Further intensifies Interoperability issues Reduced •Global Economic other existing Slowdown restraints Demand Reduction in product prices 7
  8. 8. Regional Trends Total Broadcast Video Encoders Market: Region-wise Revenues (World), 2008-2015 120.0 100.0 80.0 $ Million 60.0 40.0 20.0 - 2008 2009 2010 2011 2012 2013 2014 2015 AmericasYear EMEA APAC Source: Frost & Sullivan • Americas to decline at a CAGR of 20% till 2011 • EMEA to decline at nearly 13% till 2011 • APAC demand will weather the storm- still single digit CAGR over forecast period 8
  9. 9. Market Drivers: So where is the opportunity? AVC/H.264, 41.7% SD, 51.2% MPEG-2, 58.3% HD, 48.8% Source: Frost & Sullivan Source: Frost & Sullivan • Demand for products- especially in the newsgathering/ contribution category- for high resolution • Even emerging (typically price-sensitive) countries transitioning to HD workflows • New products supporting H.264 AVC/ JPEG2000 etc. in demand • High demand for software-intensive solutions-that are highly scalable, easily upgradeable; cheaper, and can sit on top of server systems 9
  10. 10. Market Trends 2006-2009: Strengths: Weakness: Comtech acquires Radyne •Aggressive demand •Tremendous price in Asia pressure, low margins Thomson divests its stake in Grass Valley •Demand for high •Saturation in demand resolution, advanced from premium Harmonic acquires Rhozet, Entone formats regional markets Technologies and recently, Scopus •Broadcasters Tandberg Television acquired by Ericsson diversifying: investing in alternate media Motorola acquires Tut Systems and Opportunities: Threats: Modulus Video •Overall fall in pricing •Highly competitive for hardware- calls for market Scientific Atlanta acquired by Cisco Systems innovation •Not a lucrative •Potential to create segment: low turnkey efficient and volumes robust software- •Alternative media: • Market Consolidation: acquisitions based systems complex and and mergers •Alternative media fragmented customer • Inorganic growth efforts: new product markets demands; demand for lines, new regions cheap solutions- high risk of failure 10
  11. 11. Technology Trends • Ultra HD Technology from NHK Broadcasting UltraHD format is four times as high and four times as wide as HD. It is a prototype for a new digital video format, proposed as replacement for existing high definition television (HDTV). The current High-Definition Television (HDTV) uses 1,080 lines of resolution, where as UltraHD uses 7,680 x 4,320 pixels in a widescreen aspect ratio of 16x9, making for a total of approximately 33 million pixels. UltraHD is so named because it provides a video resolution containing 16 times as many pixels as current HD. • AVS- Format in China Audio Video Coding Standard or AVS is an independent coding-decoding standard, which officially became the national standard of China in 2005. AVC is 2-3 times more efficient as compared to the traditional MPEG-2 standard. The performance of AVS and AVC is similar. However, AVC's licensing mode is complex and fees expensive, where as AVS's licensing mode is as simple as that of MPEG-2 and fees competitive. 11
  12. 12. Competitive Landscape: Changes Expected More than 20 vendors in this market globally Usual Suspects (Global Presence): •Tandberg Television (Ericsson) Examples of Emerging Vendors •Cisco Scientific Atlanta •Motorola NTT, Fujitsu •Harmonic •Grass Valley Streambox •Envivio •Harris Digital Rapids, •Comtech TV (earlier Radyne) Telestream, Viewcast 12
  13. 13. Conclusions • Broadcast market maturing in North America and Western Europe • Immediate growth expected in Asia • Vendors need to innovate: demand for lower cost, highly efficient and scalable software solutions • For survival, if not robust growth: “expand your horizons,” alternative market segments 13
  14. 14. Next Steps Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, September 13-16 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ (www.gil-global.com) Register for the next Chairman’s Series on Growth: The CEO's Growth Team™: Research & Development Driving Growth and Innovation (August 4th) (http://www.frost.com/growth) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 14
  15. 15. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. 15
  16. 16. For Additional Information Craig Hays Jake Wengroff Sales Manager Corporate Communications Information & Communications (210) 247-3806 Technologies jake.wengroff@frost.com (210) 247-2460 craig.hays@frost.com Mukul Krishna Research Director Digital Media (210) 247-3850 mukul_krishna@frost.com 16
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