Video Software Shifting to the Headend

According to Q4 data from Synergy Research Group, headend-oriented software is accounting for an ever-larger share of video infrastructure software revenues, while content protection share of the market is declining. In 2014, headend software made up 43% of total revenues, compared to 32% three years ago. Content security share of the market declined by an equivalent amount while client software share of the market is holding steady at around 22%. In the headend software market, Cisco, Ericsson and Rovi each account for 10-11% of the total, followed by ARRIS and Accenture.

Total spend on video infrastructure software grew by 6% in 2014, with the headend software segment growing by 14% while content security declined somewhat. Headend software includes sub-segments such as headend middleware, content management systems, advanced advertising, search and recommendation, analytics, cloud DVR and TV Everywhere.

"Trends in OTT, consumer expectations, video consumption patterns, TV and video business models, and cloud-oriented technologies are all putting more emphasis on complex headend software," wrote John Dinsdale, a chief analyst and research director at Synergy. "We are seeing extremely high growth rates in some of the emerging product areas such as cloud DVR, TV Everywhere, and search and recommendation. This is opening up opportunities for relatively new players in the market, though the bulk of spending continues to gravitate towards the more traditional vendors that have a broad range of video products."