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Connected TV and iPads are leading to an explosion in new encoding services

The global transcoding business, driven by the success of connected televisions and portable tablets and smart phones, is expected to grow to nearly a half billion dollars in the next few years as investors see a wide-open market opportunity for new sales.

Encoding vendors are using hardware as well as starting to offer services over the cloud, and the immense workload of supporting thousands of simultaneous video streams has allowed cloud-based operating start-ups like Encoding.com and Zencoder to emerge. Both companies have recently raised new funding and are cashing in on the infrastructure-as-a-service model, which avoids the upfront costs tied to designing networks and securing traditional encoding hardware.

This encoding boom is connected to the increased mobility of television viewers. Until recently, most video files put online required just a single encoder, which was typically watched in a web browser through Adobe’s Flash player.

Then came adaptive bit-rate streaming, which split up videos into multiple different bit rate renditions and automatically switched between them based on the bandwidth available through a user’s network connection. After that, Apple’s iPhone and iPad, as well as a new generation of PC-based tablets and smart phones, arrived. Some of these devices support Flash-based video while others support HTML5 encoding. The latter appears to be gaining momentum as the universal choice to allow content producers to create an audio and video web experience playable on any connected device.

Publishers had to create new versions of their videos just to reach the growing number of viewers on Apple mobile devices (which use HTML5), and as that category has continued to grow, connected TVs, Blu-ray players and other devices have emerged; each requiring different versions of video formats.

With the burst of new devices on to the scene came the desire to deliver content to all of them simultaneously. That growth has continued to blossom with the introduction of TV Everywhere authentication over cable networks.

This growth has caused new alliances. For example, Elemental Technologies, an encoding vendor, recently announced a partnership with Comcast subsidiary thePlatform. Elemental will provide transcoding for Comcast’s TV Everywhere offerings.

In addition to Comcast’s Xfinity Online streaming video portal, Elemental delivers video to an iPad app and also could be making Comcast’s on-demand streams available to connected TVs soon. In total, Comcast encodes 18 different renditions of each video file in its streaming library.

Numerous equipment vendors, including Analog Devices, Ericsson, Harmonic, Nextiva, Streambox and others, all support similar services.