Market Dynamics
Broadcast equipment market drivers
Demand for encoders to support multiple format driving market growth
A video encoder generally converts the given analog or digital video format into a suitable digital video format which can be reached by a decoder. For television broadcast, video encoders usually input SDI in a digital video signal that is uncompressed into an H.264 or HEVC. The video encoders designed for ISR and IPTV accept analog composite video, SDI, or ethernet and user-specific data to transport into different forms of viewing or storage devices instead of a wireless or IP-based network to view through computer monitors or to capture into a storage device.
These hardware encoders are the dedicated processors which use a particular algorithm to encode a video and data into streamable content. These solutions are available in smaller transferable boxes and larger permanent equipment. The majority of professional broadcasters prefer to use these hardware encoders for live streaming as they specialize in hardware encoding, giving them an advantage over the software encoders. These encoders are being used with multiple cameras, which can be used to produce content by the users.
The market has a rising demand for advanced encoders having multiple product support, for which vendors are providing new products. For instance, in Feb 2020, Z3 Technology, LLC, a video encoding provider, released the DME-40, a new H.265 video encoder that is capable of encoding up to four 4K Ultra HD cameras along with highly efficient H.265. The DME-40 is the ideal platform for various applications such as broadcast, medical imaging, event streaming, industrial video, low-latency, low-bit-rate streaming, and other multi-camera video streaming and recording.
Moreover, the ability of the encoders to manage multiple HD channels and send to multiple destinations has a significant aspect in applications like live event broadcasts that need to be broadcast on different media outlets. This demand is further boosted since broadcasters continue innovating and upgrading their infrastructure.
Furthermore, in Jan 2020, Anevia, an OTT and IPTV software solutions provider, launched Genova Station, an off-the-shelf, small form factor encoder. By leveraging their encoder technology, the company released their compact, hardware-accelerated Genova Station appliance delivers enterprise-level video streaming functionality in a “plug and play” format at a highly aggressive price point.
Such instances are likely to boost the market growth in this region. Video encoding is essential as it enables users to transmit the created video content on the internet efficiently. In video streaming, because the compressing of the raw video reduces the content bandwidth, the encoding of the generated content is important, making it easier to transmit and maintaining a good quality of experience for the end viewers.
Ott services boosting market growth
With the advent of OTT platforms, content consumption and audience viewing patterns are experiencing a significant shift. Moreover, subscription-based digital content providers and OTT service providers have also propelled audio/video data streaming growth. The requirement for technological and maintenance upgrades for multi-screen content distribution has encouraged multiple production houses to switch to these platforms. Owing to this, the number of devices utilized to access digital content has increased recently. This has expanded the number of platforms through which users can access streamed audio and video content.
An OTT video delivery system consists of various video servers that store and stream content according to multiple formats defined by standards (e.g., HLS, HDS, HSS, and MPEG-DASH). The massive surge in OTT services has increased the use of multiple broadcast equipment products, such as SDI & HDSR encoders, video servers, etc. The growth of D2C offerings through OTT is driving the usage of cloud solutions. Operators can adopt a hybrid approach to deliver OTT video using a private cloud-based CDN solution. Some components, like the management system and the analytics, on-net streaming servers, are kept in-house to maximize security and control. The streaming servers for off-net delivery are generally deployed outside the enterprise in the public cloud and closer to end-users for optimal performance.
The rise of media streaming services is majorly fuelled by the increasing demand for subscription-based services, the increasing availability of region-specific content, and the creation of original content across the world. These drivers have been enforcing the service providers to change their strategies and focus their plans on enhancing the customer experience. Moreover, the adoption of mobile devices and cloud-based solutions with the increasing penetration of OTT based platforms and the incorporation of AI along with machine learning to help in the regulation of live streaming and provide data regarding consumer usage patterns, and partnerships in offering region-specific content have been driving the market across various regions.
Broadcast equipment market restraints
Lack of standardization hampering market growth
Many media codecs and file formats create indistinctness and lead to a lack of standardization. The rapidly evolving digital audio and video formats and the lack of open, national, or international consent standards for creating and preserving digital audio and video are challenging the market growth. The usage of standards helps store media for the long term, making them fundamental.
Various kinds of video and audio compression formats make it complex for broadcast and IT engineers to identify and work with since various formats are used in legacy systems. Additionally, a lot of errors in video quality are caused by the non-conformance to the variety of compression standards. Thus, standardization of different media formats and codecs is essential for broadcasters.
Video distribution has grown into an enormous ecosystem that encourages the launch of new formats. Broadcasters are anticipated to follow certain national or regional standards like ASTC or DVB. Government and standardization organizations have introduced new formats. New codecs are being launched by ISO-certified authorities reducing uncertainty.
What are future key opportunities in broadcast equipment market
Technological innovations offering growth opportunities
The future of the market is anticipated to be boosted by some technological innovations like developing 5G, cloud-based software as a service. In May 2021, Open Broadcast Systems introduced 5G support to the existing encoder products that allow the transport of low latency, high-quality video from encoders in the entire broadcast without external hardware. Thus, these kinds of developments are driving the market in the future.
Additionally, the shift toward commoditization of sporting and entertainment services has encouraged OTT streaming and it is creating an impact on millennials and Generation Z, as their way of engagement with sports and entertainment content is evolving. Users of this age group demand more flexibility and reduced prices to access the sporting events of their favorite clubs and teams. Therefore, operators are looking to invest in the areas where their audiences see value to keep pace.
Moreover, reality connects the digital world to the physical world by augmenting digital content over a physical object or image. In August 2020, LiveXLive Media announced its partnership with Strax Networks Inc., to bring its augmented reality StraxAR SaaS platform to LiveXLive. These two companies would collaborate to bring new reality technology of Strax Networks across the LiveXLive platform and its vast OTT distribution network. This can provide new technology to the streaming world with a new business model. The increased usage of Smart TV also encourages the development of software solutions and, in turn, drives the market.
For instance, Amagi, a cloud-based channel playout platform, developed Cloudport to offer edge deployment for delivering linear channels over fiber, IP, and satellite in Smart TV. These solutions encourage the automation processes like playlist generation, management of live broadcast, and ingest content from multiple live sources. For instance, in 2020, WKAR transmitted ATSC 3.0, while bearing the experimental license from FCC to broadcast two separate signals, the company hopes to include interactive functionality to broadcast over ATSC signals. These types of initiatives encourage the development and adoption of cloud-based SaaS for the entertainment and media sector.
However, hardware components such as video servers might remain an essential component of broadcast since they can fit easily in any broadcast television station such as a government station, public access, educational, house of worship, or production house. Moreover, the inevitable migration to IP-based media productions is still anticipated to drive the use of switcher technologies in the future. Moreover, the availability of switchers that deliver 8K, HD, and UHD capability in a single unit increases the adoption of hardware components. Also, vendors are also focusing on HDR technology and AI in the switchers that increase further adoption.
Moreover, the development focus on Neural network-based encoders and the deployment of the same to enhance the video current encoding standards is a factor driving the market. Furthermore, incorporating AI-based pre-processing and compaction on optimization of perceptual quality for a small number of encoder bits addresses various challenges like pre-processing before compression. Overall developments in the hardware and software are expected to drive the market, and the software solutions are expected to replace the hardware broadcasting equipment over the next five years, slowly.
Regional Analysis
North america to be the largest revenue holder in global market
Based on region, the global broadcast market share is segmented into North America, Europe, Asia-Pacific, Latin America, and Middle-East & Africa. North America is anticipated to hold the largest market share of USD 3 million by 2030 at a CAGR of 6% during the forecast period. The market in Asia-Pacific was valued at USD 27,547 million in 2021.
The rapidly increasing number of satellite and cable television channels and the increasing internet penetration have provided broadcasters the opportunity to offer high-quality content to the viewers, which is one of the driving factors behind the rising demand for broadcast equipment in this region. Another major factor boosting the region's market is the rapid adoption of OTT services. The introduction of software as a service (SaaS) in broadcast equipment also boosts the market growth.
Europe is the second region dominating the global broadcast equipment market with USD 1 million in 2021. Some of the major factors boosting the development of the market in the region are the increasing adoption of IoT devices and OTT subscriptions, penetration of the internet, and investments made by local vendors. Rapid growth in the development of various broadcasting hardware has also contributed to the market growth.
The broadcast equipment market in Asia-Pacific is expected to witness slow growth, with a value of USD 1 million in 2021. This region is one of the fastest adopters of high-speed internet. The adoption of smart devices is a factor that is creating the demand for high-definition videos and audio in the region. The increasing OTT subscription in the region and the development of new radio stations also encourage the adoption of broadcasting equipment.
Latin America and Middle East & Africa have the lowest market owing to less-developed internet facilities and required infrastructure. In 2021, the market revenue in Latin America was valued at USD 1 million. The market value of Middle East Africa was USD 1 million in 2021.
Impact of covid-19
Owing to the uncertainties caused by COVID-19, the market is noted to be benefitted from an economic revival and the transition to IP and Cloud-based solutions. The industry has accepted new habits and ways of working that have settled for most broadcast and media organizations. Cloud infrastructure is anticipated to continue supporting remote workflows and reducing dependency on on-premises systems. For broadcasters, the pandemic has accelerated the adoption of distributed workflows for better operational agility.
Broadcast professionals are leveraging IP streaming technology to collaborate with their peers, whether it is for remote production, remote collaboration, or any remote operation. R&D will be a key area as companies continue to invest in new product. Technology that delivers low latency return video teleprompting has become vital during this period. Under these circumstances, the ability to provide precisely-timed and captivating live content has become a prime exercise of inefficiency.
The impact of the pandemic will be more significant for hardware manufacturers who are facing disrupted supply chains owing to the pandemic and rely on trade shows to drive the sales. Between the transitions to as-a-service models, suppliers are pushing their next-generation software products more aggressively to compensate for the decrease in legacy offerings. Conferencing tools like Zoom grew up globally, facilitating users to effectively conduct several virtual business meetings. For example, Microsoft saw a 500% increase in Microsoft Teams meetings in China after the outbreak.
The outbreak has forced broadcasters to rethink their approach to producing and delivering content, resulting in changes to staffing, technology stacks, and facilities. News broadcasting is already changing to the lockdown requirements of several nations, with several programs worldwide gathering experts’ input through many consumer video technologies. Broadcasting Technologies also enabled programs and concerts during the pandemic scenario. For instance, Lady Gaga organized an eight-hour event with 100 musicians playing in their living rooms, bedrooms, and gardens.
The impact of the pandemic on future operations and results, including the customer, demands; is uncertain. Due to the lockdowns, thousands of support staff deploying, monitoring, and managing operations were forced to adopt cloud-based applications. For fully IP-based workflows, the adoption of compression standards within the ST 2110 space and the push into AV for streaming, alongside NDI, SDVoE, and other IP-driven technology, is expected to boost growth. 12G-SDI Fiber solutions are also being developed to improve the movement of 4K/UltraHD HFR content over a single cable up to 10 Km to meet the need for high bandwidth content.
