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Pay TV Operator Software Spending Contracts 5% in Developed Markets in 2013, According to ABI Research

Pay TV Operator spending on middleware, conditional access, DRM and other elements of the Pay TV software contracted 5% in North America and Western Europe during 2013, compared to 2012. This decrease was driven by classic end-to-end middleware functions, while newer experiential components—including guide technologies and interactivity—fared better. Further, the growth of Pay TV, especially in developing regions of Asia-Pacific, including China, India, Malaysia, Indonesia and other countries has offset this loss—bringing the worldwide Pay TV operator spending on video software up about 5% to $4.48 billion USD.

The largest middleware and professional service integrators such as Cisco (including the NDS group) and NAGRA are being outpaced in terms of growth by smaller companies such as TiVo and Rovi. According to ABI Research practice director Sam Rosen, “The strategic focus at these companies, as well as at Ericsson, fresh off its Mediaroom acquisition, is to develop solutions which extend Pay TV systems to multiple screens. We expect future acquisitions similar to the Ericsson acquisition of Azuki Systems and the ARRIS acquisition of SeaWell Networks to better prepare OTT delivery platforms.”

Middleware providers believe that the development of Comcast’s RDK is one of the most significant factors in the decrease in software spending in North America during 2013, with merger uncertainty a second important reason. Today, larger middleware companies see it mainly as a threat—operators directly hiring developers rather than relying on traditional vendors—while smaller middleware providers see it as an opportunity to decrease technology spending while offering robust solutions.

These findings are part of ABI Research’s Multiscreen Video Middleware and DRM Market Research (https://www.abiresearch.com/market-research/service/video-sw-middleware-and-drm/).

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

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