Cable Technology Feature Article
Dynamic Ad Insertion Set to Spike with HD and VOD Uptake
By Tara Seals, TMCnet Contributor
Broadcasters and cable operators are migrating from analog to digital networks in an effort to cater to subscribers' growing demand for digital content. With the transition from standard to high definition (HD) and video on demand (VOD) content shifting the focus to interactive, addressable advertising commercials, the global adoption of video and ad insertion servers is set to escalate.
That’s according to analysis from Frost & Sullivan (News - Alert), which found that the market saw revenue of $1.32 billion in 2013—a figure that the firm estimates will reach $2.33 billion in 2019.
Major sports events, such as the Sochi Olympics in Russia and the 2014 FIFA World Cup in Brazil, have been increasingly recorded in HD and even 4K UltraHD. The consequent shortening of the sales cycles for digital media technology is fuelling the uptake of digital equipment, including video server systems.
"Personalized and interactive services such as VOD have further transformed the way consumers watch television," said Frost & Sullivan digital media research analyst Aravindh Vanchesan. "The advent of advanced capabilities such as pausing live TV and catching up TV, networked personal video recorders and interactive advertising is widening this global market scope."
Despite this immense potential, cannibalization is a looming concern. The popularity of the Internet as an advertising avenue may eat into the advertising dollars of broadcasters, in turn, affecting their ability to budget for technology. Broadcast television providers will be forced to operate on the linear ad insertion model, where all TV sets receive the same commercial regardless of individual preferences. This curbs the need for video and ad insertion servers.
Taking steps towards regional and targeted ad insertion, which has long been considered a potentially strong revenue generator for broadcasters, will be crucial to perk up demand for video and ad insertion servers. Server providers can also target cable and telecommunication companies that need to upgrade their server solutions to distribute video over multiple media such as the Internet and mobile devices.
"As vendors look for opportunities in this intensely competitive space, mergers and acquisitions will gain pace," said Vanchesan. "While the video server market witnessed significant consolidation among vendors over the last five years, the highly-fragmented ad cable segment, as well as the telecommunication and broadcast segments will witness strong M&A activity during the forecast period."
Edited by Maurice Nagle