Demand for high-quality video streaming in a wide range of environments, such as the Internet, intranets, broadcasting and cable/telcos, is fostering a convergence of media and will sustain impressive growth for the video server market, according to a new study.

Frost & Sullivan's latest strategic research, "U.S. Video Server Markets," stated that the total streaming market generated $635.8 million in 1999 and is expected to grow to $1.198 billion in 2000.

"The imminent switch to digital broadcasts and transmissions is a huge driver for the video server industry," said Frost & Sullivan Information Technology Industry Analyst Brian Palmer.

The report analyzed the major vertical markets in the video server industry, including the Internet, intranet, broadcast, and cable/telecommunications vertical segments. It covered a number of subsegments, such as intranet video sever systems and software; broadcasting software plus compressed and uncompressed video server systems; and cable and telecom software and systems markets. It evaluated key drivers and restraints and presents expert forecasts for each segment.

The FCC mandate for broadcasters to migrate to digital could actually slow video server sales in the short term, the report found. As cable and telecom companies spend large sums of money on infrastructure and transmitter upgrades, they may delay purchases of new video server systems.

"Video server vendors must persuade potential customers to purchase video server products now, rather than waiting till the last minute to comply with FCC regulations," Palmer said.

Many potential customers remain unaware of the benefits of streaming video via the Internet and intranet as well as in the broadcasting and cable/telecommunications fields.

"A major challenge for most of the video server industry is to increase the level of awareness concerning the benefits of deploying a video server solution," Palmer said.