Despite the pay television industry’s increasing focus on delivering services to alternative devices such as PCs, smartphones and tablets, its traditional flagship platform — the STB — continues to increase and, indeed, thrive with market shipments set to hit record highs in 2013, 2014 and 2015. That’s according to new market research from IHS, a business consulting and research firm based in California.
Worldwide shipments of STBs used for cable, satellite, terrestrial and Internet protocol television (IPTV) digital TV services are forecast to climb to 269 million units this year, up 8 percent from 250 million in 2012, according to the latest IHS Set-Top Box Market Monitor report.
Shipments will grow another 6 percent to 286 million in 2014 and by 1 percent to 290 million in 2015. The year 2015 will represent the peak of the market for the foreseeable future, IHS said.
“STBs are facing a mounting challenge to their role at the dominant pay TV video consumption device because of operators’ growing emphasis on supporting multiscreen devices,” said Daniel Simmons, senior principal analyst for TV technology at IHS. “However, operators are continuing to deploy STBs in order to manage the compatibility between their delivery networks and the consumer electronics devices that consumers are increasingly using to view content now.
“As pay TV operators rush to accommodate changes in delivery platforms and in video formats — including the adoption of HD — STB shipments will continue to rise, hitting record levels for the next few years,” Simmons said.
Reports of the imminent demise of STBs have been fueled by the increasing prominence of multiscreen devices. For example, IHS in 2012 noted that the domination of the boxes on the pay TV market was set to come to an end, with multiscreen devices accounting for nearly half of all platforms obtaining television services from the largest operators by 2015.
Pay TV operators are also increasingly focusing their attention on video delivery to multiscreen devices as they attempt to stave off the competitive threat posed by platform-agnostic OTT services such as Netflix, Amazon and others.
However, this doesn’t mean that the boxes will stop being used — or even that their shipments will stop rising in the near term. In fact, IHS expects pay TV operators to continue to deploy STBs and utilize them as a central platform for video services.
The multiscreen phenomenon, ironically, will help boost the set-top market during the next few years, as operators offer multimedia home gateway boxes that can deliver services to PCs, smartphones, tablets and other devices, supporting the operator-as-an-app model.
In mature markets where pay TV digitization is complete or nearly finished, the transition to HD and MHG boxes will help to sustain volumes and increase revenue in 2013, 2014 and 2015. The gradual migration to HD is continuing, with 2014 expected to be the first year when more than 50 percent of pay TV boxes shipped globally can support HD.
These developments will allow the STB industry revenue to grow to $22.2 billion in 2013, making it the most valuable year in the history of the market.
IHs said Pace, based in the UK, shipped 11.3 percent of all pay TV STB unit shipments in 2012, retaining its status as the world’s largest vendor. French manufacturer Technicolor (Thomson) increased its shipments by almost 5 million units in 2012, allowing it to leapfrog Illinois-based Motorola and take second place in the market.
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