According to ABI Research, cloud-based video technology is forecast to exceed 25% of the $49-billion enterprise video solutions market by 2023. While changes in viewer behavior and the shift from on-premises hardware to cloud services have posed challenges to some market segments such as encoders/transcoders, middleware, and conditional access (CA), new opportunities in over-the-top (OTT) and cloud video are adding fuel to the market - UltraHD and ongoing codec transitions (e.g., HEVC) are expected to help balance out declines and slowing growth in some pay TV markets.
"Video services and operators are increasingly moving workflows and operations to the cloud - doing so allows companies to better scale operations both up and down to meet demand and helps lower capex spend, particularly among those companies without extensive history in the OTT space," said Michael Inouye, principal analyst at ABI. "These changes also reflect the need for video platforms and services to be more flexible to meet the needs of a wider breadth of customers and, ultimately, end viewers."
The video market is expected to grow at a 4.8% CAGR from 2017 to 2023, but the increasing trend of moving to the cloud is expected to help the cloud video segment achieve a stronger 11.7% CAGR. Beyond the spread of cloud content and services, the industry is also looking forward to upcoming opportunities to enrich the value proposition of content and, where possible, gain efficiencies to reduce costs.
"The video industry is an interesting space, with aspects of the market undergoing significant transitions and a regional diversity that sees subscriber losses in the United States but continued growth in others such as the Asia-Pacific," Inouye said. "On the horizon: AI and advanced advertising are expected to help achieve some of the earlier stated goals around value proposition and efficiencies. In addition, other technologies and services, such as those in the smart home, will create new opportunities for operators to engage with customers - all of which will further redefine what it means to watch TV."