Personalization, VOD growth pushes operators toward ‘nimble’ solutions

Increasing demand for video on demand (VOD) and a growing constellation of consumer devices – smartphones, tablets, and smart TVs – are combining to drive the growth of pay-TV middleware solutions, resulting in a market likely to exceed $2 billion globally by 2020.

A new report from Frost & Sullivan said the need to deliver a unified multiscreen experience to viewers at any time and anywhere is forcing service providers “to reinvent themselves to offer highly personalized content and value-added services in order to support the new self-selection consumption models that characterize the viewing habits of today.”

The middleware market saw $1.05 billion in revenues during 2014, and is forecast to nearly double to 2020 to $2.03 billion.

“Factors favoring market growth include the increase in the deployment of hybrid models such as cable + IPTV, satellite + IPTV and terrestrial + IPTV,” said Hiral Jasani, a Frost & Sullivan analyst. “Moreover, the need for interactive pay TV middleware on secondary devices to offer managed experiences on unmanaged devices is lending impetus to the markets across North America, Latin America, Europe, the Middle East and Africa.”

Increased subscriber churn and strong demand for over-the-top (OTT) subscriptions are squeezing operators and their existing business models.

As a result, pay-TV providers are trying to develop highly interactive, flexible consumption models that also leverage OTT, an attempt to make it an opportunity rather than a threat.

That’s prompting operators to look at less-rigid solutions, like those provided by SaaS vendors, to help create more nimble and agile solutions that allow service providers to compete with OTT services.

In developed markets, more hybrid cable and satellite deployments are cropping up. But in emerging markets, like Africa, Latin America and India, operators are moving toward pay TV “IPfication.”

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn