Market Trends of Broadcast Equipment Industry
Encoders are Expected to Witness Significant Growth
- Encoders play a crucial role in broadcasting by converting audio and video signals into digital format for transmission over networks. As demand for high-definition and streaming content grows, broadcasters need advanced encoders to deliver high-quality video efficiently. This drives the demand for broadcast equipment, including encoders, as broadcasters upgrade their infrastructure to meet evolving viewer preferences and technological standards.
- In April 2024, Net Insight announced a boost to the capability of its Emmy Award-winning internet media transport offering, the Nimbra 400 encoders, to meet the growth in more prosperous and more interactive events production with the upgraded Nimbra 414. The latest version of the Nimbra 414 increases channel density and support for UHD content, making the Nimbra 414 encoder/decoder family now ideally placed to help broadcasters deliver more immersive productions that enhance viewer engagement.
- The purpose of encoding a video is to create a digital copy transmitted over the internet. Broadcasters can choose between a hardware or software encoder, depending on the purpose of the stream and the budget. Most professional broadcasters use hardware encoders, but due to the high price point, most beginner-level to mid-experienced broadcasters go with live streaming encoder software.
- For instance, in April 2024, VITAC, a Verbit Company, a US-based captioning company, and ENCO, a provider of broadcasting solutions, announced a strategic partnership aimed at providing broadcasters with expanded choice for hardware encoders and cloud captioning. Through this alliance, broadcasters will access a comprehensive suite of captioning tools and services tailored to meet their specific requirements.
- Furthermore, the increasing popularity of streaming platforms necessitates efficient encoding technologies to deliver high-quality video content over the internet. For instance, in September 2023, Nordic PayTV and streaming platform Allente launched its new Allente Stream multiscreen OTT offering. As a result, the operator has gone live with the latest apps for Android TV and mobiles, LG and Samsung Smart TVs, Apple TV, web, and iOS, based on the 3SS 3Ready product platform.
- Moreover, with content being distributed across different platforms and devices, broadcasters need encoders that support adaptive bitrate streaming and compatibility with different codecs and protocols. Further, the popularity of live events, sports, and news coverage needs encoders that can efficiently encode and transmit live video streams in real time.
- According to Meltwater, in recent years, live-streaming video content has become one of the most popular types of video content consumed online for entertainment and operational purposes. During the third quarter of 2023, live streaming registered an audience reach of almost 28% among internet users worldwide. In addition, in 2023, Netflix revealed that it had 80.13 million paying streaming subscribers in the United States and Canada.
- The effectiveness of encoders has significantly improved, and they play a significant role in the success of modern formats, like HDTV, and compression standards, like H.264. Currently, the demand for encoders in broadcast settings can be categorized into three key domains: contribution, primary distribution, and home distribution.
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Asia-Pacific is Expected to Witness Significant Growth Rate
- Asia-Pacific is home to some densely populated countries such as China and India. Increasing urbanization and digitization across Asia-Pacific countries fuel the demand for broadcast equipment as more people access television and digital media content. According to Meltwater, in the third quarter of 2023, about 96% of internet users aged between 16 and 64 years in the Philippines used a subscription video-on-demand (SVOD) service, such as Netflix, each month.
- Further, over-the-top (OTT) streaming platforms are gaining popularity in the region, creating a need for advanced broadcast equipment to support high-quality streaming services. For instance, in May 2024, Prasar Bharati has announced its plans to start its own OTT platform for families in August. The government's public service broadcaster will stream content that will be focused on Indian society and culture. Initially, the platform will be available for free to the public. Such developments may further propel the market’s growth in the region.
- Asia-Pacific is home to major sporting events like the Olympics, FIFA World Cup, and regional tournaments. The demand for broadcast equipment surges during such events to ensure seamless coverage and transmission. At the same time, advancements in broadcasting technologies, such as 4K/UHD broadcasting, virtual reality (VR), augmented reality (AR), and immersive audio, are driving the adoption of advanced broadcast equipment in the region.
- Countries such as Bhutan, Iran, Bangladesh, and Vietnam are demonstrating the most significant mobile penetration advances, according to a GSMA report. The implementation of smart devices in the region is another factor fueling the demand for high-definition audio and videos. As per GSMA, 64% of the residents in APAC already possess smartphones, and the adoption is expected to cross 80% in 2025.
- Furthermore, in March 2023, Netflix announced plans to spend approximately USD 1.9 billion on local content in Asia-Pacific. The company was expected to register revenue growth of 12% Y-o-Y in 2023 and exceed USD 4 billion compared to 9% growth in 2022. In addition, according to ITU, 66% of the population in Asia-Pacific reported using the Internet as of 2023, further propelling the market’s growth.
- Local vendors invested heavily to capitalize on the opportunities brought by the COVID-19 pandemic. For instance, in March last year, Signiant Inc. announced the acquisition of Kyno, which provides embedded media processing software. The acquisition helps Signiant Inc. extend the functionality of the Software-Defined Content Exchange (SDCX) SaaS platform, incorporating tools for engagement with media assets. With almost 1 million users globally, the platform connects more than 50,000 media and entertainment companies of all sizes.
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