Market Insight

Media transport services market almost doubled in under 10 years

July 23, 2014

Przemek Bozek Przemek Bozek Associate Director – Research and Analysis, Service Provider Technology

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“The global market for media transport services reached $16.5 billion in 2013 from $8.3 billion in 2006. During this period, traditional providers from satellite, teleport and terrestrial verticals recorded a doubling of revenues while fibre and CDN markets increased by three times and six times, respectively.

Media transport industry encompasses services offered by satellite, fibre, Content Delivery Network (CDN), terrestrial operators and teleport service providers for uplink and downlink to media & entertainment companies. Collectively these five groups nearly doubled in size between 2006 and 2013. The future outlook looks very promising with an expected CAGR of 6% in the next four years.

Channel growth and device proliferation are driving the growth of satellite and CDN transport, respectively.

Individual parts of the industry have different drivers behind their growth. For traditional services represented by satellite, teleport and terrestrial networks the opportunity comes from further increase in the number of channels and their multicast, and the conclusion of digitization in developing economies; for fibre owners the speed of transmission and easiness of feed management provides advantage over satellite networks for contribution; and for CDN providers the consumer proliferation of connected devices together with multiscreen adoption. CDN media revenues boasted the largest growth amongst all categories researched, as consumer viewing patterns keep changing towards personalized viewing and viewing outside own premises.

We see another increase in demand for satellite and fibre services as markets realize that there is less competition between them and rather they tend to complement each other. Fibre dominates in contribution from venues but its share is still lower than a satellite in primary distribution to cable headends due to its point-to-point nature. Secondary distribution – understood as a distribution to customer premises – has been seized by satellite and it remains the most popular and efficient method of reaching masses despite growing fibre/IP presence at homes in some geographies. The growth of CDN services is also being driven by end-consumers, but to-date this has been mainly supplementary to more traditional forms of delivery, as a method for unicast of on-demand content.

Digitization key for terrestrial growth

The digitization of terrestrial infrastructures has refreshed revenues of network providers and multiplex owners in countries where the process has been completed. It increased their flexibility, total channel lineup and allowed multiplex operators to add more profitable HD channels to their list. In the longer run it will open up another opportunity for operators who can offer hybrid DTT/IP services for VoD, catch-up or entertainment.

Aggregated satellite media revenue share stood at almost 50% of transport markets

Transport markets are dominated by the largest satellite companies including SES, Eutelsat, Intelsat and Echostar to name a few followed by terrestrial giants: Arqiva, TDF and Abertis, CDN leader Akamai and fibre network owners such as Telstra Global, Level 3, Tata Communications and BT.”

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