Pay TV Middleware is emerging from largely closed systems with long product cycles to more modular and open architectures with large operators investing more heavily in captive middleware while adopting a best-in-class approach. New technologies including advanced advertising, multiscreen guides, TV personalization via search, recommendation and discovery, and automatic content recognition are all receiving investment. Application of analytics to video systems is rising in importance, including measuring quality of experience (QoE), driving consumer engagement, improving monetization, and improving customer acquisition, ARPU and reducing churn.
Conditional Access Systems (CAS) and Digital Rights Management (DRM) technologies provide content protection (copy prevention) and revenue protection (blocking access to unauthorized users) for video content. The CAS market is changing slowly based on downloadable and renewable CAS technologies as well as a significant transition to 2-way content protection systems. The DRM market is maturing and moving from a PC and traditional telco IPTV focus to look at content delivery to connected TVs and multiscreen devices (tablets, smartphones), and enabling a shift to periodic revenues rather than revenues driven by set-top box shipments.
Tier-1 vendors are consolidating and transitioning from product-oriented offerings to more holistic systems integration and service offerings. A second tier of vendors is focusing on more turnkey solutions. Innovation continues to happen through small, nimble start-ups on multiple continents, with search, recommendation and discover, analytics, or interactivity at the core of their offerings.