The video middleware, conditional access, DRM and guide software market is feeling pressure as the industry migrates to Software as a Service (SaaS) business models, says analysis from ABI Research.
Moreover, even though the analyst forecasts a flat video software market until 2021, with revenues remaining close to $4 billion, it cautions that the industry is on the verge of a sea change. ABI believes there is a risk of increased service complexity, dependence on more suppliers, and possible IT incompatibilities.
That said, ABI’s study observed that many of those offering software enabling delivery of video services to pay-TV operators are evaluating the efficacy of micro-service–based architecture for their solutions, meaning that they are focusing on a larger number of more concentrated services to promote flexibility. But, ABI added, the greater number of interoperability points across the platform risks stability.
“Multiscreen services have largely migrated to SaaS business models, while operators still have some resistance to migrating traditional set-top box middleware software licences to SaaS,” said Sam Rosen, managing director and vice-president at ABI Research and author of the Market Update: Middleware, CAS and DRM executive summary. “We expect middleware vendors to describe the benefits of SaaS models to the operator community… in addition to continued discussion around services and content protection.”
The ABI analysis concluded by suggesting that content delivery network (CDN) providers Akamai, Level 3 and Limelight and managed video platforms (MVPs) like Quickplay were draining video distribution revenues. It added that an increase in quality and availability of public cloud offerings was expounding this trend as mature market saturation, cost and consolidation pressure from open source software, and a tendency toward in-house development from large operators were driving the flat video software market forecast.