Following several years of healthy growth, demand for set
top boxes (STBs) continues to climb this year. However, as
demand from maturing pay-TV markets like North America and
Western Europe begins to slow, the market will start to see
moderate decline over the next few years.
Shipments of STBs are on track to reach 228 million units
shipped globally, according to new research from
Leading manufacturers are launching a new generation of
STBs labelled as media gateways or smart boxes. This new
generation of STBs offers features such as transcoding,
wireless routing, multi-platform content management, media
distribution and multi-room delivery.
"The roll out of these new boxes comes at a time when the
saturation of subscriber bases in mature markets is
resulting in the need to develop new non-video related
services. The ability to incorporate these boxes within
home networking infrastructures and their compatibility
with portable devices provides the ability to roll out
services that allow the control of in-home lighting,
temperature and security. Such offerings are expected to
become increasingly widespread due to the competitive
nature of the market and slowing video related revenues
forcing operators to embrace new growth opportunities,"
says Carl Hibbert, Head of Broadcast Research at
On the video front, facilitated by enhanced broadband
performance, pay-TV operators are beginning to incorporate
IP not only to enhance existing services to the big screen,
but to boost content delivery to multiple devices including
tablets and smartphones.
Regionally, growth opportunities are still present. Asia
Pacific, which is expected to represent 45% of global
shipments in 2012, will see growth through to 2013, with
smaller regions including Eastern Europe and Latin America
growing from 16% to 18% and 4% to 6% respectively.
Asia Pacific has witnessed tremendous demand and growth,
with India's satellite industry and growing digital cable
base and China's cable sector driving much of the volume in
the region. Asia Pacific however represents a short term
opportunity for the STB industry as subscriber growth is
beginning to slow in comparison to previous years, although
with India's cable digitalisation initiative, demand will
continue to be high.
Latin America represents a long-term growth opportunity for
the STB sector with an abundance of new pay-TV services
rolling out in the region, analogue to digital conversion
of cable subscribers and the roll-out of new free to air
digital services, but the region is unlikely to provide
sufficient demand to sustain global growth.
In Western Europe, cable represents the largest proportion
of pay-TV homes and close to half of all pay-STB demand,
and the continuing migration to digital services will drive
cable STB growth through to 2014. However, cable operators
are losing a proportion of their analogue subscribers to
alternative pay platforms and FTA services. Overall cable
subscribers will fall over the forecast period, in turn
negatively affecting long-term demand for STBs.
In North America, the saturated pay-TV market continues to
lose subscribers quarter on quarter, negatively affecting
demand for STBs, resulting in a 4% fall over the forecast
period. Revenue however will be sustained as operators move
to more advanced set top boxes allowing for the roll-out of
more sophisticated services that will attract new revenue
streams from subscribers.