The market for technology for improving streaming video is expected to peak over the next five years but growth will flatten after that, according to a new report from researcher Rethink TV.

The Service Obtainable Market (SOM) for Embedded QoE Agents is set to hit over $9 billion by 2028, but strong growth over the next five years will flatten off towards 2028, in the face of a sharp drop in pricing for vendors and an OTT video market entering maturity.  

Considering that the term “broadcast quality” is the gold standard for television, Rethink TV says streaming services have yet to achieve that goal. 

“Amid the unstoppable rise of OTT, it is too often forgotten that IP-delivered video still has a long way to go when it comes to catching up with the reliability of linear, Pay TV networks,” the researcher said. “OTT services have usurped Pay TV when it comes to offering consumers an endless buffet of choice, but they still regularly suffer from infuriating buffering windows and highly variable picture quality.  

“In many ways, this poor user experience is the final obstacle to OTT wiping out Pay TV altogether, and yet these issues have persisted for over 20 years,” it adds. “While Quality of Experience (QoE) is no longer a bleeding-edge technology, it is no less essential than it was at the dawn of streaming. “

However, QoE is now amid various layers of consolidation, the researcher said with QoE tools are being folded into wider analytics suites with tools like Quality of Service (QoS) and customer management. Meanwhile, analytics technologies have become one of many modules available via the ‘end-to-end’ video technology suites that are generally referred to as online video platforms (OVPs).  

This consolidation will continue to lower the price of the standalone technologies, with QoE being no exception. Add to that a maturing OTT market, where brand new, rapidly expanding vide services are increasingly rare, and Rethink TV sees a QoE market that is soon to plateau.  

Rethink TV’s report examines the market for “embedded agents”—QoE systems that report performance data directly from within the video player. Once integrated with the player, Embedded Agents can report metrics such as re-buffering ratio (which is the buffering time versus playback time), video start time, video start failures and average bitrate. 

However there are other vendors in the QoE ecosystem—”external agents” such as Witbe, Suitest and (arguably) SIMMWave, also assess QoE, but this using external software and hardware tools to imitate an end user. 

Although the end goal is similar, these two camps offer entirely different business models. Embedded agents are employed to monitor all activity on a video service whereas external agents are deployed far more sparingly due to much higher integration and upkeep costs.  

Despite the irrefutable tide that will propel OTT video to become the dominant form of video consumption, IP-delivered video still has a long way to go when it comes to catching up with the reliability of linear Pay TV networks, the researcher said. OTT services have usurped Pay TV when it comes to offering consumers an endless buffet of choice, but they still regularly suffer from infuriating buffering windows and highly variable picture quality. In many ways, this poor user experience is the final obstacle to OTT wiping out Pay TV altogether, and yet these issues have persisted for over 20 years.  

While perfecting network infrastructure is essential, any such repairs are being done blind without first knowing how and when the user experience suffers. Quality of Experience (QoE) tools therefore arrived soon after IP-delivered video, around 20 years ago, and while they are no longer a bleeding-edge technology, they are no less essential than they were back then, Rethink TV concluded.  

Global pay TV revenues peaked in 2016 at $199 billion but are expected to fall to $125 billion in 2028, down from $151 billion in 2022, despite the number of pay TV subscribers remaining at just under 1 billion.

That’s the conclusion from U.K. researcher Digital TV Research, which estimates that pay TV revenues will fall by $26 billion between 2022 and 2028. Satellite TV revenues will drop by $12 billion, with digital cable down by $13 billion. Analog cable will lose a further $1 billion. IPTV will be flat. Revenues will decline in 71 of the 138 countries between 2022 and 2028.

The U.S. pay TV’s share in the global TV market will also decline, according to Simon Murray, Principal Analyst at Digital TV Research. “U.S. pay TV revenues peaked at $101 billion in 2011,” Murray said. “Its total will drop from $65 billion in 2022 to $46 billion in 2028. The U.S. will still account for 37% of global revenues by 2028, which is down from 43% in 2022.”

ARLINGTON, VA—The Consumer Technology Association has promoted Steve Koenig to Vice President, Market Research. A 14-year veteran of CTA, he most recently served as Senior Director, Market Research.

"We are thrilled to recognize the success and outstanding contributions Steve has delivered to the tech sector and CTA," said Gary Shapiro, president & CEO, CTA. "Not only does he provide invaluable insight and analysis for our organization, our members and the tech industry, Steve exemplifies the best of CTA with exceptional leadership, infectious passion and a commitment to teamwork..

[Read: CTA’s Steve Koenig Offers A Market-Based Preview Of CES 2018]

Koenig oversees CTA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. Under his leadership, CTA now produces more than 30 research reports a year on emerging topics including artificial intelligence, smart cities, smart home technology and international trends, as well as market data analysis, industry forecasts and business intelligence.

Koenig speaks and writes frequently on technology trends and their impact on consumer behavior, and has been quoted in Bloomberg, USA Today, Washington Post and more. He presents Tech Trends to Watch at CES and CES Asia.

Koenig joined CTA in 2004 and previously served as an analyst with several research firms, including NPD Group, and as a senior editor at Computer Retail Week. Koenig holds a bachelor's degree in marketing from the University of North Texas.