Gains Seen in VOD, Online Delivery Systems

SCOTTSDALE: ABI forecasts that the worldwide market for VOD equipment will see a 3-percent annual growth to reach $591 million in 2016, while pay-TV operators’ investments in content delivery networks (CDN) to facilitate "TV Everywhere" rollouts will reach $774 million, a 4.3-percent increase from this year.

Operators are investing in technology in order to be able to deliver content to iPads and other streaming devices, including PCs, mobile phones and connected TVs. “The rapidly rising amount of video content is creating challenges for service providers,” says Jason Blackwell, ABI Research practice director. “CDNs have historically focused on delivery between operator networks. However, to facilitate the rapid growth of video, operators are installing CDNs within the footprint of their own networks. Operators used to plan for very low concurrency rates of about 3 percent on their VOD systems, but increased content and use of these systems on new connected devices is leading concurrency rates to more than 20 percent.”

ABI Research senior analyst Sam Rosen adds, “Operators face a challenge when introducing new services. Time Warner Cable recently saw unprecedented demand for its TWCable TV in-home streaming iPad App, and had to scale back from 30 channels to 15 due to inadequate server capacity. Some forward-looking vendors have developed time-based licensing models to prevent this type of problem and to allow for peak-demand periods, such as sporting events, that would otherwise overwhelm the servers.”