2014/01/14 MPEG Broadcast Contribution Encoders
By Michelle Abraham
Contribution encoders are used to compress the video and audio stream coming from the camera, truck or venue before it is transmitted to the studio. Contribution encoders are also used for compressing the stream as it is moved between studios.
There are several methods of transmitting the linear stream, each of which may have its own encoding equipment: Satellite, microwave, cellular and fixed network. One trend in the market is new transmission equipment that combines two or more of these transmission methods with the encoder so news crews can take advantage of the most suitable transmission network for the conditions.
One large factor influencing the future of the contribution encoder market is the rollout of HEVC. MRG expects that the mobile and fixed segments of the market will deploy HEVC encoders in different time frames with those using cellular transmission equipment moving first. There will be a number of demos of HEVC contribution encoding equipment at NAB with the first shipments expected later in 2014.
Other trends shaping the market in the next few years include transmission via the unmanaged Internet, improvements in satellite transmission technology, 4K content production, and the need to reduce expenses at the same time as the demand for more and more video content is increasing. Not all of that content will use broadcast encoders though as it becomes easier and easier for reporters to capture video footage with nothing more than a cell phone.
There are a large number of vendors in this market, some of whom may ship only a few hundred encoders per year. Some have expertise in a particular transmission method, such as microwave, and ship encoding equipment only in that contribution segment. Most either also have business in other video transmission equipment or in other segments of the encoder market.
MRG Analysis:
Though there will be shifts in the market with some segments growing more slowly than others, the overall contribution encoder market will grow in 2014 after declining in 2013. We will see the normal seasonal patterns with greater shipments in even years for major events like the World Cup and the Olympics. Cellular newsgathering equipment is relatively new in the market, so there is a higher growth trajectory projected for that segment of the market.
There are many broadcasters who have not upgraded their newsgathering capabilities to HD, so replacing older SD MPEG-2 equipment with new HD H.264 equipment will continue with the overall market shift to HD. By 2017 SD encoders will account for 13% of the market compared to 35% in 2013. ASPs will decline each year so vendors will need to increase their shipments each year to keep their revenues stable, so revenue will grow slightly to $192 million in 2016. Higher prices for HEVC encoders will help with revenue.
For more information, please see our new report on MPEG Contribution Encoders, due out next week.
