The ‘TV as a Service’ (TVaaS) business market is due to grow to US$1.5 billion (€1.4 billion) in 2021, representing 35% of video software revenues, up from 10% in 2016, according to ABI.
The research firm said that recurring revenues based on video consumption, transactions, or subscriber-related metrics will take over traditional hardware sales, software and IP licences, and service-related revenues.
The report also noted that most major vendors now demonstrate products with TVaaS components – such as Cisco’s Infinite Video suite, Nagra’s intuiTV product, and Ericsson’s MediaFirst suite.
“Video software markets are in a period of rapid disruption, highlighted most aggressively by Ericsson’s revelation that its media unit’s operating income showed a loss of 25% of revenues in 2016, accelerating to 33% in the fourth quarter,” said managing director and vice president of ABI Research, Sam Rosen.
“To survive the upheaval, these markets must adopt models that showcase a unique balance of service-oriented integration and development offerings, intellectual property (IP) licensing, traditional software licensing and TVaaS.”