The worldwide market for VOD equipment will grow 20 percent, thanks in large part to premium VOD offerings, advanced advertising in VOD and catch-up TV services.
A recent report by ABI Research said the market for VOD equipment would increase from $493 million last year to $591 million in 2016.
One area of growth for VOD equipment is advanced advertising for free VOD content. Earlier this month, Comcast announced it was already dynamically inserting ads into VOD through some of its NBCUniversal properties, with most of its major markets slated to have the ability over the coming year.
Canoe Ventures, which is backed by the nation's six-largest cable operators, has a dynamic ad insertion (DAI) trial slated for this year, with commercial launches to follow early next year.
"To date, most operators have been providing their free video-on-demand libraries only as a way to reduce subscriber churn, with the focus on attracting viewers," said Sam Rosen, senior analyst for the digital home at ABI Research. "Now, VOD system manufacturers are turning their attention to advanced advertising as a way for operators to sell ads in VOD streams. For instance, Concurrent's advanced media data logistics platform enables all types of advanced advertising within a VOD platform."
The report said that pay-TV providers were preparing to offer subscribers premium VOD offerings, which are new releases that cost $25 to $30 each and come out about two months after a movie's theater release and two months before it's released to DVD, premium channels such as HBO, and video services such as Netflix.
"Premium VOD requires close cooperation of VOD server and content protection vendors," Rosen said. "In the case of DirecTV's premium VOD launch, Home Premiere, SeaChange worked to integrate watermarking technology by Civolution to help persuade Hollywood to release premium content to video-on-demand platforms."