MPEG Encoder Market Downturn Expected

While the market for MPEG encoding equipment in the broadcast sector grew in 2008, a reversal of the trend is expected this year, according to In-Stat, a Scottsdale, Ariz.-based market analysis group.

This slump is blamed on the current economic situation as well as the approaching end of the U.S. BAS relocation project. The report said that the encoder downturn would slightly decline in 2009, but that market contraction would accelerate the following year.

"The launch of new pay-TV services will slow in the current climate," said Michelle Abraham, In-Stat analyst. "Encoder upgrades to save on operational expenses are more viable, with a number of new product introductions in 2009 that will reduce the bandwidth necessary for video transmission."

The In-Stat report predicted that H.264 would "make greater inroads" into the high-definition contribution process and that the largest region for H.264 would be in Europe, with markets there accounting for nearly 33 percent of the worldwide $111 million encoder market.