TV middleware market consolidation looks set to continue

USA: The TV middleware market has seen a number of recent acquisitions, notably Cisco’s acquisition of NDS and Arris’ acquisition of Motorola Home from Google. Ericsson’s rumored acquisition of Microsoft’s Mediaroom Middleware Group would further the consolidation.

About 80 percent of revenues within the middleware, conditional access (CAS), and digital rights management (DRM) markets come from companies with end-to-end solutions, according to a recently published study by ABI Research.

Within the total market, the top five players, including Cisco/NDS, Nagra, Microsoft, Motorola Home, and Rovi account for 70% of the market. Meanwhile, a significant number of startups offering innovations on one aspect of the television experience account for 20 percent of the market.

“We expect the TV middleware market to continue its consolidation phase,” says Sam Rosen, practice director at ABI Research.

“Two forms of consolidation are expected to occur. First, hardware and software companies will come together to offer more of a service oriented approach, similar to Pace’s acquisition of the Latens CAS system in late 2010. Second, acquisitions bringing together technologies required for the next generation TV offering will occur, such as TiVo’s acquisition of TRA for measurement technology.”