The overall broadcast and streaming video equipment market grew 5.6 percent worldwide in 2013, to $1.6 billion, as spending on content delivery networks (CDNs) increased while spending on contribution encoders and video-on-demand (VOD) playout servers decreased.

Infonetics (News - Alert) forecasts the total market to top $2.5 billion by 2018 amid significant technology shifts. For instance, CDN platforms are evolving to support an increasing number of over-the-top (OTT) formats such as HTTP Live Streaming (HLS) and Microsoft (News - Alert) Smooth Streaming. Pay-TV providers are also using a mix of platforms, from GPU-based devices to software-only, to create massive and distributed encoding horsepower in the cloud—all managed centrally via software-defined networking (SDN) controllers.

“We are very early in a long-term transition to software-based and SDN-controlled video processing, but we believe the shift will result in increased spending on both multiscreen encoders and content delivery network equipment, as pay-TV and over-the-top (OTT) providers begin purchasing these platforms to more efficiently process and distribute video content,” said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research (News - Alert).

Two of the strongest growing segments in the broadcast and streaming video market are CDN edge servers, which Infonetics expects to grow at a healthy 17 percent CAGR from 2013 to 2018, and multiscreen broadcast encoders, growing at an 8 percent CAGR.

“Multiscreen and multi-format video give providers the flexibility to deliver video to any end device from nearly every point in their network,” Heynan said.

Infonetics said that Harmonic (News - Alert) continues to lead the global broadcast and streaming video equipment market, although its revenue share decreased about one point while some competitors gained in 2013.