Market Overview For Video Transcoding Services

When it comes to delivering online video, content owners continue to need more services than just pushing bits across a network. The real struggle moving forward is trying to solve the entire ecosystem of video creation, ingestion, transcoding, management, storage, distribution and tracking. Not to mention all of the other sub-categories of management like authentication, meta data, business rules, etc.

The question I often get asked is who's in the transcoding market and what segments of the market are they going after? In a recent conversation I had with Ripcode, they shared with me one of their slides that breaks out the different vendors in the market and the segments or verticals each vendor is going after. While I am sure there are a few more vendors that could be listed, especially for mobile transcoding, the slide does a good job of capturing who's in the market today and what they are focusing on.

While transcoding is a small market today, it's only going to grow larger as more content owners place more videos online, in more formats, for more devices. Over time, transcoding is going to become a mainstay functionality of the CDNs and we are already beginning to see more content delivery networks think about the ecosystem for video, including transcoding. In addition, some content owners have the ability and resources to do their own transcoding and for some, it makes sense to keep it in-house. The transcoding solutions on the market today are a lot cheaper and more efficient than they were three or four years ago and provide the ability to turn around videos very quickly for content owners who have the internal manpower.

Last year, Frost & Sullivan released a report entitled "Video Encoders and Transcoder Market" which contains a slide that shows the revenue forecasts and growth rate for 2005-2014.

The Frost & Sullivan report details that over the next few years, while the size of the transcoding and video encoder market continues to grow, it will so do at a slower rate, due to competition driving prices down and product saturation down the road. They still have the market growing but at decreasing rates as digitization becomes well established globally over the forecast period.

While transcoding is not a service you hear many people talking about in the industry, it is a topic that you hear raised quite often when speaking to a large number of customers. Over time, transcoding should become a technology that is built into the network layer of content delivery and hopefully will be seen less as a stand-alone product offering. The key thing to remember is that if content owners can't get their video into the right format, for the right device, they content can't be delivered.

 

Comments

[Steve Lerner]

Encoding has always been a tricky business- how many encoding shops have we seen come and go? However its always necessary... and always interesting.

I like the concept of the 90watt super efficient encoding box- but it needs to support watermarking for audio.

The real trouble is distribution- each digital service provider (media store) has different metadata and delivery requirements- so far I've only seen distribution solved by service providers.

[Greg Wallace]

Hi Dan,

You do point out in your article that the slide may leave a few vendors out of some of these categories. I'd like to to point out for your readers that Inlet Technologies (where I work) can be found in at least 2 other categories in addition to IPTV headend. We support web broadcast and streaming environments for MLB.tv, professional tennis, auto racing and many other non-sports live streaming applications with our Spinnaker line. And our Armada transcoding workflow management system, working in tandem with Fathom capture and encode platforms, does the heavy lifting at several of the largest post production and game platform companies to handle their massive "batch transcoding" requirements.

Thanks!

[Yossi Wellingstein]

Dan,
I think you are pointing at a real business that did not get much attention until now.
I think that one of the challenges of this industry is to manage transcoding in a way that each stream/download would fit the largest number of devices at the user end.
This is a technology game and the ones to provide a good solution, may have a significant advantage in the market.

[Arthur Meyerovich]

Hard to imagine their slide missed encoding.com, they must be really in tune with the market.

[Dan Rayburn]

Why would encoding.com be listed? The slide is breaking out transcoding based hardware and software vendors, not vendors who provide outsourced encoding services.

[Mike Nann]

Dan, I know I'm late in commenting here -- and that you didn't create the original slide -- but like the other vendors who commented above, I just wanted to point out that Digital Rapids fits into more that just the categories indicated on the slide. In particular, in addition to the "mobile and web" live streaming category, we also have solutions in customer use daily for IPTV Headend Encoding. While there are varying definitions of IPTV (some closer to Internet TV), we have deployed solutions meeting even the fairly strict definitions (e.g. H.264 in Transport Streams for delivery over a closed, controlled network to set-top boxes).