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Transcoder Vendor Revenues Set for Boost From HEVC in 2014

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12/19/2013
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SCOTTSDALE, Ariz. -- MRG, an SNL Kagan company and a market leader in the Video and Media ecosystem for more than 20 years, has released its latest report, Multiformat Transcoding.

Multiformat transcoders are used to process video and audio streams for distribution via OTT and multiscreen services as well as for other purposes like digital archiving. Many live transcoders are bought by pay-TV providers who are offering TV Everywhere multiscreen services out of fear of OTT providers undermining their business. They are spending money without generating additional revenue or improving margins. The pay-TV providers do not impact the file segment as much. Many of the customers for file transcoders buy them for mezzanine transcoding and workflow automation which can save money and time, thereby boosting profits and possibly generating revenue if it allows them to distribute their content more widely.

In addition to the many market drivers highlighted in this research, the move to use HEVC compression will encourage customer upgrades with an impact in 2014 and beyond. HEVC will not necessarily require new equipment but providers will likely buy more because they will still need to process H.264 as well as HEVC. With live streams, that means duplicating exactly the number of streams to be processed. For files, a customer may have current downtime to process HEVC as well as H.264. The density of HEVC solutions will not be as great as that of H.264, so it will drive additional transcoder sales.

Multimedia Research Group (MRG) Inc.

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