Analyst: Video Equipment Rev Up 15% in Q2, Cable M&A on the Way


Worldwide IPTV and cable video equipment revenues jumped during the second quarter of this year, hitting $1.2 billion, up 15 percent from the first quarter, according to new data from Infonetics. Additionally, the research firm predicts more M&A activity in the operator space because of relaxed regulations.

Jeff Heynen, Infonetics Research’s directing analyst for broadband and video, pegged the growth in the video equipment market, especially in IP set-top boxes, middleware and video content security software — to the steady subscriber growth from companies like AT&T (s T) and Verizon (s VZ).

This rise of the telcos as video providers was the foundation of a recent research note from GigaOM Pro analyst Steve Hawley. In his “Telco Strategies for Over-the-Top Video,” Hawley examines the variety of options telcos will employ to offer video services, ranging from full build-outs (like Verizon’s FiOS) to partnering with over-the-top hardware providers such as Roku, and even the use of placeshifting technologies.

Heynen also believes that recent regulatory moves will help stimulate mergers and acquisitions amongst operators. From his statement in a press announcement:

“Another significant development this quarter was the US Court of Appeals strike-down of the FCC rule limiting cable video providers from owning more than 30% of the video subscription market. This could pave the way for Comcast to pass the 30% threshold via a merger or acquisition. In a year where growth is hard to come by and corporate valuations are low, we think there could be significant M&A activity in North America in the second half of 2009.”

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