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Artificial Intelligence Doubles Video Analytics Market in 5 Years

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"Offering an analytics dashboard is table stakes," says Sam Rosen, managing director and vice president of ABI Research. Rosen authored the company's Analytics Opportunity in Video Services report, and was explaining the need for video services companies to move from descriptive offerings to predictive analytics.

The pay TV analytics services market is currently worth $1.8 billion U.S. per year, and that will grow 105 percent to $3.7 billion U.S. by 2022. Rosen notes that today's top video companies—such as Comcast, Netflix, Sky, and Telstra—stand apart by a progressive use of analytics to improve operational metrics.

Pay TV companies are getting wise to the use of artificial intelligence (AI) and machine learning, and are leaving their siloed data solutions in favor of unified platforms that store data in a central location and provide access to various divisions based on their needs.

This evolution has led to an investing opportunity for pay TV services. Companies benefitting from this include Conviva, which recently announced $40 million in funding which will be used for analytics solutions, and Samba, which closed a $30 million funding round aimed at video measurement.

The next wave of video solutions needs to provide comprehensive data architectures, prescriptive analytics, and AI- or machine learning-based self-optimization. While AI use is new for pay TV operators, these solutions were developed by pure-play OTT companies. 

"Pure-play OTT operators have been some of the prototypes of early use of AI within video services," Rosen explains. "From development of rigorous A/B testing to see how new UI features perform for business objectives against real-world audiences (Netflix), to intelligent audience segmentation and understanding value of acquired content against a narrow genre such as anime (Hulu), the OTT operators have largely set the bar for use of analytics services. Development of these services as native IP-based services and avoidance of legacy siloed infrastructure has also allowed the solutions to be well architected with central data repositories, ensuring everyone in the organization is working off a common data set. Traditional pay TV operators are today working hard to achieve similar benefits, but face more difficult journeys given legacy infrastructure."

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