Movies on Demand to be Coming Attraction for Broadband

SCOTTSDALE, Ariz., June 5, 2002 - As deployments of cable modems and Digital Subscriber Line (DSL) services continue to increase throughout the world, Video-on-Demand (VOD) services over Internet Protocol (IP) networks will grow to a total of more than 17 million users, generating over $1.9 billion (US) in subscription and pay-per-view revenue during 2006, according to In-Stat/MDR. The high-tech market research firm reports, that as consumer-oriented VOD services over IP become more pervasive, revenue generated by family-oriented VOD services will eventually surpass those of adult content sites, which currently dominate the VOD-over-IP market.

“Consumers who have broadband Internet connections represent a strong growth market for VOD services,” says Gerry Kaufhold, a Principal Analyst with In-Stat/MDR. “Adult content Internet VOD services are way ahead of cable TV VOD deployments in terms of total subscribers and revenues. However, four new family-oriented VOD-over-IP service efforts are underway: CinemaNow, Intertainer, MovieLink, and Movies.com.” CinemaNow has deployments in North America, Taiwan, and Singapore, with more to come. Intertainer is rolling out their service in 35 major U.S. cities that have strong broadband deployments in place and the other two services will launch later this year.

“Several million movie streams per month are currently being served up for free, but as the major movie studios enter the fray, with premium movie titles, pay-per-view and subscription services will gain traction, helping Hollywood figure out what the market is for 'on demand' content, and help engineers and software programmers to develop efficient delivery systems and workable Digital Rights Management solutions,” says Kaufhold. Slated to generate approximately $460 million worldwide in 2002, the adult content segment of the market (representing over 98% of revenues) will serve as a barometer for the future success of the market as a whole. By the end of 2004, the number of subscribers and pay-per-view participants, regularly using family oriented "on demand" IP services, will out number the users of adult content services, and, by 2006, family oriented "on demand" services will overtake the adult content sites in terms of annual revenues.

In-Stat/MDR has also found that:

  • By 2006, about 40% of worldwide consumers who have high-speed Internet connections to their residences will be using 'on demand' services for which they pay monthly fees, bringing $1.9 billion to Hollywood.
  • The North American market has the lion's share of consumer broadband connections deployed, and, by 2006, will represent over 7.6 million VOD users, generating over $820 million in revenues.
  • Asia, especially South Korea, Taiwan, Singapore, and others, will represent about 37% of worldwide VOD-over-IP subscribers by 2006, producing over $700 million for movie studios. Europe will provide about 15% of worldwide VOD-over-IP revenues in 2006, and the Rest-of-the-World will bring in about 4.7%.
  • Blockbuster Video rental stores won't go away, but VOD services from Cable TV, Satellite TV services, and digital terrestrial datacasting services, will all add momentum to the 'on demand' market.

 

Middleware "Magic Bullet" to Enable the Digital Media Continuum

SCOTTSDALE, Ariz., May 1, 2002 - As broadband applications begin to migrate up and down the bandwidth continuum, the dividing lines between television stations, Cable TV headends and corporate streaming media networks will blur, according to new research from In-Stat/MDR. The high-tech market research firm reports that, as this occurs, new players with innovative products may quickly out-distance long-established companies who fail to see the walls of their vertical markets coming down.

“Digital content wants to cover the world,” says Gerry Kaufhold, a Principal Analyst with In-Stat/MDR. “Multimedia 'Middleware' has opened up Pandora’s Box, advancing to the point where any content can be managed and delivered, securely and safely, over any network.”

Kaufhold identifies seven fundamental underpinning technology trends in multimedia broadband:
  • Web-like portals will become a preferred user interface
  • The Internet will become a preferred control panel to set up delivery
  • Separate network infrastructures will move and deliver the digital content
  • Encryption, security and conditional access will keep it all safe
  • Wireless and mobile workers need to be served
  • Middleware permits applications to migrate up and down the continuum
  • Automation systems provide the ability to control the delivery mechanisms.
In-Stat/MDR found:
  • The worldwide market for multimedia broadband equipment will grow to more than $11 Billion in 2006.
  • Ethernet is becoming the new video backbone. Interconnection costs for Ethernet can be ten times lower than traditional analog video routing and switching. As video moves onto Ethernet in the TV realm, it will leap into corporate LANs very quickly.
  • Video conferencing services will soon be adding Web events and video streaming.
  • Automation systems will permit broadcasters to "bundle" several local stations to operate as "video data centers," and existing corporate data centers will soon add video.

‘On-Demand’ Services Poised to Revive Interest in Interactive TV

SCOTTSDALE, Ariz., January 16, 2002 - After several years of hype and false starts, the worldwide interactive TV (iTV) market is finally beginning to take shape, according to Cahners In-Stat/MDR. The research firm reports that despite the fact that iTV still must overcome some formidable obstacles, including a broad misunderstanding of exactly what iTV is, the market is poised for growth, particularly in North America.

“After years of trials and tentative service introductions, the past year has seen interactive services become a common sight on most pay-TV networks. Cable TV operators, terrestrial broadcasters, and satellite TV providers have all been active in testing different interactive applications in the quest to increase average subscriber revenues,” says Mike Paxton, a Senior Analyst with In-Stat/MDR. “The expanded capabilities that two-way, digital transmission networks offer to both subscribers and service providers have resulted in greater penetration of interactive applications like Electronic Programming Guides and Video-on-Demand.”


In-Stat/MDR also found that:

  • Of all the different iTV applications, "on-demand" applications, like video-on-demand and personal video recording, have sparked the most industry interest due to their great potential for adoption by today’s TV viewers. The number of television households using on-demand services worldwide will jump from 1.3 million in 2001 to over 33 million in 2005.
  • North American Video-on-Demand service revenues are forecasted to grow from $86 million in 2001 to over $1.75 billion in 2005.
  • In a recent survey of consumers, 75% of the respondents were familiar with several different iTV applications, but had rarely or never used them.

Digital Video to Spur MPEG Chip Growth – ST and ESS Top of the Market

SCOTTSDALE, Ariz., June 19, 2002 - After a hiccup in 2001, the Motion Picture Experts Group (MPEG) video chip market will continue to grow through 2006, according to In-Stat/MDR. The high-tech market research firm reports that, spurred by the proliferation of digital video, the entire MPEG video chip merchant market will triple in revenue from 2001 to 2006. “Currently, the different segments of this market are in various stages of the life cycle,” says Michelle Abraham, a Senior Analyst with In-Stat/MDR. “For example MPEG-1 Decoders are holding steady while MPEG-2 Decoders for SVCD are declining. However, the markets on the way up (MPEG-2 Encoders, MPEG-2 Decoders and MPEG-4 codecs) will more than make up for those on the way down.”

In-Stat/MDR has also found that:

  • The MPEG video chip merchant market is expected to reach $3.3 billion and 272 million units in 2006 up from $1 billion and 112 million units in 2001. During this period, the overall composition of the market will change. The HD MPEG-2 decoder, MPEG-4, and MPEG-2 encoder segments will grow as a percentage of the total while all other segments decline.
  • With regards to MPEG chip market share in 2001, ST Microelectronics was first in revenue with $392 million or 33% for the fourth year in a row. ESS Technology came in first in unit shipments with 34 million for 31% share. LSI Logic was second in both categories. These three companies account for over 70% of the MPEG video chip market.