The global market for media managed services reached $24 billion in 2013, up nearly threefold from just $9 billion in 2006, driven by the need for online and digital video, according to new information from the IHS Technology Professional Video research practice.
While media services cover activities such as storing, processing and preparing video content, the transport of video represents the majority of revenue for media managed services, or 68 per cent of total industry takings in 2013. By 2017, the total media managed services industry revenue is expected to reach $32 billion, as shown in the attached figure.
Video transport as a service is broadly centred on the uplink of content via teleport, or four primary modes of distribution: satellites, terrestrial towers, private fibre networks or the open Internet via delivery through content delivery networks (CDN). Of these, the satellite sector is considerably the largest industry, accounting for nearly half of all video transport revenue.
“The video transport industry is not just about getting video to consumers, but also about moving content between locations and businesses. Therefore IHS sees especially strong growth with greater viewing demand in all regions for both linear and non-linear content,” said Tom Morrod, senior director for consumer electronics and video technology at IHS. “However, some dynamics are changing even within the industry. For instance, satellite will still grow and continue to be the main method for content distribution, but expansion will also be driven by other industries, such as CDN, fibre and teleport.”
With the exception of terrestrial services, which have peaked in developed markets, IHS expects video transport to become increasingly important and competitive as broadcasters and pay-TV operators try to minimise costs associated with transporting increasingly large portfolios of content.”
The rise in processing-based services is also driving a great deal of new contracts and requests for proposals from broadcasters and pay-TV operators, Morrod noted. Many companies, for example, have recently invested in services such as linear playout and media asset management despite lower profitability, because those services are increasingly essential to the procurement of other provisions, such as teleport, encoding, transcoding and fibre or satellite re-sale. The total video processing service market was worth $4 billion globally in 2013, which IHS forecasts to grow to over $6.5 billion by 2017.
Globally, the top 10 service providers last year made up 37 per cent of total revenue for the managed services industry. The players are primarily found in the satellite, terrestrial and data centre services, where building up significant scale is advantageous. Among the key vendors are satellite providers such as SES, Eutelsat and Intelsat; terrestrial providers like Arqiva and TDF; and infrastructure providers such as Dell, IBM and Fujitsu. Processing and teleport services tend to encourage a larger number of small- and medium-sized competitors, as they are often more specialized and regional.
Western Europe is the largest market for media managed services, ahead of Asia-Pacific, North America and Eastern Europe. Overall more than 25 per cent of all media managed services can be attributed to Western Europe, followed by Asia-Pacific and North America each claiming approximately 20 per cent. As the key region for almost all media managed services, Western Europe has a large number of direct-to-home (DTH) satellite operators, boasts more developed terrestrial services and forms a significant hub for teleport, playout and asset management services for the collective Europe-Middle East-Africa (EMEA) region as a whole. Western Europe is expected to remain the major region for services moving forward, but Asia-Pacific will supply intensified competition from Asia Pacific.