$4B Video Distribution Market Led by TV Everywhere, OTT

Revenue from worldwide entertainment video distribution (ie. cable, satellite, IPTV (News - Alert), mobile video and online platforms) will hit $2.1 billion this year, which is impressive enough. But the real story is within the next five years, where we will see the money pot balloon to more than $4 billion upon nearing 2017 – thanks to digital distribution – according to ABI Research (News - Alert). That, in turn, is creating big opportunity for delivery enablement players.

The market expansion is being led by TV Everywhere and over-the-top (OTT) video in particular, the firm said, especially Comcast Xfinity, HBO GO, Netflix, BBC iPlayer and BSkyB’s (News - Alert) Sky Go service, which are all growing rapidly. That in turn is making for a healthy lookout for video delivery platform companies, the ranks of which can be broken down into four specific segments: online video platforms (OVPs), managed video platforms (MVPs), content management systems (CMS), and content delivery networks (CDNs).

Each of those rubrics has a clear market leader as well, which may seem to compete with each other but in reality do not, according to Sam Rosen, practice director of TV & video at ABI Research.

That’s because the customer targets vary by segment.

Smaller content owners and those wanting social media integration and simple platforms lean to OVPs, he pointed out, while MVPs are helpful for operators that don’t have the technical expertise to deliver a video service, and want a turnkey solution. CMS are attractive to the largest operators with diverse assets and a desire to manage all their video centrally. And CDNs optimize digital video delivery and handle caching.

Well-known CDN Akamai (News - Alert) has a commanding lead of the video delivery market today, with about $475 million in 2011. Meanwhile KIT Digital, while suffering through what Rosen termed “serious growing pains” in early 2012, leads the market for content management systems with nearly $175 million in revenue in 2011. Brightcove is the largest OVP with $64 million in 2011 media and entertainment revenue. Synacor (News - Alert), which primarily hosts websites for cable MSOs, leads out the MVP market with nearly $91 million in 2011 revenue.

“Many of these companies claim the same competencies in video delivery,” said Rosen. “However, each offers a unique piece of the solution.”

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