Published On: Mon, Jan 18th, 2016

Video Technology Services

Fueled by advances in network capacity, new viewing devices (tablets and connected TVs) and new distribution models (Netflix), video is undergoing a major change in the way it is delivered and consumed. No longer the sole purview of pay TV operators, the consumption of video content over the Internet is growing at phenomenal rates; consumer video usage is at 4 million terabytes per month and is expected to grow to 17 million terabytes in five years. These rates are being driven by the popularity of over the top (OTT) video: Netflix, Hulu and YouTube. These growth rates may be conservative. Netflix alone grew from 20 percent to 30 percent of prime time Internet traffic in North America in 6 months. This seismic shift in consumer behavior is creating multiple and significant challenges and opportunities for service providers and networking vendors. Service providers (fixed and wireline) are increasing their capacity, which is enabling more OTT video but is also increasing costs–they often cannot charge additional revenues to offset the expense.

Quality of experience is improving with the advent of more efficient streaming and adaptive bit-rate technologies. STB makers are facing challenges from Apple’s iPad, a device that premiered about one year ago and major consumer brands (Sony, Samsung, LG) who are building streaming into their TVs and Blu-Ray players.

Centers of influence are shifting and it is unclear who will emerge as the market leader. Pay TV companies are facing the prospect of more OTT consumption, bypassing their managed network. Netflix, once a niche player considered an annoyance, is emerging as the major video distributor.

As a result, service providers and their vendors need to work as strategic partners to address capacity/congestion, quality of experience issues while reducing capex and opex, and develop new revenue opportunities/business models.

ACG’s research and go-to-market services provide independent qualitative analysis, quantitative data and expertise are designed to help both service provider and networking vendor organizations make key decisions about product development, pricing, market entry strategies and competitive positioning. Our next-generation video infrastructure research service offers the following service offerings: strategic and go-to-market planning, market research and monitoring services, market education services, training, and customized.

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