The following post is an excerpt from our IPTV Market Leader report, produced by Kagan Research, a group within S&P Global Market Intelligence. To learn more about this research, please request a call.
Our annual IPTV Market Leader Report identifies which IPTV systems and software companies are leading in each of four IPTV market segments: VOD server software, STBs, MW, and content protection (CP).
Currently, there are 32 major IPTV vendors that supply over one million active IPTV subscribers and installed STBs that we have identified and tracked for this report. We measure market positions for VOD, MW, and content protection categories by tracking actual numbers of active IPTV subscribers that are using (or being supported by) each vendor's products, and market positions in the STB segment are measured by tracking the number of installed STBs. The map below lists vendors that have number one rankings in each of the four product segments covered in this report within each of the six geographic regions and globally.
Of the four IPTV product categories that we evaluate, two have clear global market leaders, while the other two categories have multiple vendors vying for the top spot globally.
In the highly contested middleware (MW) segment, China's Huawei maintained the lead in 2015, after replacing ZTE atop the MW and set-top box (STB) categories in 2014. Ericsson again took the third place in MW, while ARRIS finished third in STBs. Huawei also remained the global leader in the video-on-demand (VOD) server category, followed by ZTE. We estimate that in 2015 Edgeware overtook Ericsson as the third largest supplier of VOD servers globally. In the content protection category, Verimatrix remained the undisputed leader.
The STB category has three vendors dominating the global market – Huawei, ZTE, and ARRIS, although Huawei substantially increased its lead in 2015. We expect the worldwide IP STB market to be flat over the next several years due to the decline in shipments in North America, as AT&T shifts its U-verse IPTV service and subscribers to its DIRECTV satellite video network. While other regions are slated for growth from added IPTV subscribers and STB upgrades, it will not be enough to compensate for the reduction in North America.
Video-on-demand server software
The VOD segment is one of the most competitive, with four top VOD companies reporting over 15 million subscribers each. Huawei leads the segment globally, increasing its lead over the rest with 38.4 million VOD subscribers worldwide, accounting for 30% of the global IPTV subscribers. It is followed by ZTE and Edgeware, which displaced Ericsson as the number three VOD server software supplier.
The STB segment remains the most crowded with 15 major vendors tracked, though consolidation reduced the number of major suppliers in this category. In 2015, Huawei extended its lead over 2014 with an estimated 52.4 million STBs worldwide, mostly on the strength of its Chinese customers, China Telecom and China Unicom. ZTE, which also supplies IP STBs to both major Chinese operators, and ARRIS follow with 37.1 million and 25.1 million subscribers, respectively. The gap between the top three STB vendors and their competitors continues to widen, with the fourth-largest, Sagemcom, reaching 7.9 million STBs.
The MW segment remains very competitive, with top vendors vying for contracts with existing and new IPTV providers, resulting in frequent changes in vendor rankings. At year-end 2014, Huawei became the new global MW leader, displacing ZTE, accounting for 21.6% of the global IPTV market. As of year-end 2015, Huawei has further increased its lead, accounting for nearly 30% of global IPTV MW subs. ZTE and Ericsson (with Mediaroom assets) remain second and third, with 23.4% and 13.9% global market share, respectively. Overall, we rank 12 major MW vendors, making this the most crowded segment after STBs. The top five vendors account for 75.4% of global IPTV MW subscribers, leaving little room for much competition from smaller vendors.
Verimatrix continues as the global leader in the CP segment with a 28.5% share of global IPTV subscribers. Ericsson remains number two globally at 12.2% share, because it now includes Mediaroom customers. Viaccess-Orca is number three with 4.4% of the global IPTV CP market by subscribers. Alticast overtook CoreTrust in 2015 to become number four with both vendors partnering with major South Korean IPTV providers. Overall, the top five vendors account for just 50% of the entire global IPTV market. Verimatrix has a strong lead in content protection, primarily because it works with many different IPTV systems and has strong industry partnerships.
While many operators, particularly in developed regions, have had IPTV offerings available for several years, we expect the market to experience solid growth globally as emerging markets, such as those in the Asia Pacific and Latin America/Caribbean regions, see new entrants and offerings.
Additionally, vendors who once focused on providing only to the operators in their respective domestic markets have branched out to other regions, particularly Asian vendors like Huawei and ZTE entering other markets in the region and, more recently, other regions entirely. A clear understanding of which vendors supply the world's IPTV market providers provides great insight into competitive factions for many segments of the value chain.
To learn more about the complete IPTV Market Leader Report, please request a call.