The worldwide media box market, comprising set-top boxes (STBs) and media streamers, is forecast to achieve shipment growth of 1% in 2019, according to a new industry report from Futuresource Consulting.
“After a period of market stagnation, shipments are on the rise again,” says Matthew Rubin, Senior Market Analyst at Futuresource Consulting. “Media boxes are on track to exceed 350 million units this year, driven predominantly by media streamers, with a little help from the free-to-air STB segment. Yet, despite the overall growth in shipments, we expect trade value to fall by 3%, as the budget end of the market begins to dominate. There’s still plenty of profit margin left for vendors, as manufacturing bill of materials (BOMs) are also coming down, ensuring a stable market structure.”
STB Market Shows Resilience
The global STB market is relatively flat, with declining shipments in the Pay-TV STB segment, as a result of cord-cutting, being largely offset by a rise in Free-to-Air STB shipments. However, this market flattening masks diverging regional trends, with declines in North America counterbalanced by growth in Latin America and most of Asia. Despite the significant headwinds facing the industry, Futuresource forecasts show worldwide STB shipment CAGR of 1% growth from 2019 to 2023.
“While satellite Pay-TV STB volumes will remain flat during the forecast period and digital cable boxes will see a CAGR decline of 2%, we expect IPTV to grow from 56 million shipments in 2019 to 67 million in 2023,” says Rubin, “representing a CAGR of 5%, as internet infrastructures improve.”
“The outlook for STBs remains positive towards the end of the forecast period because video codec changes are on the horizon,” adds Simon Forrest, Principal Technology Analyst, Futuresource Consulting. “With UHD rapidly becoming commonplace in developed markets, the industry is once again seeking alternative codecs that provide further efficiencies in video compression. This is positive news for STB vendors because it seeds replacement cycles as broadcasters and SVoD providers begin to take advantage of improved compression schemes. We forecast this transition commencing early in 2022, as VVC (H.266) and AV1 become more extensively available in hardware-based system on chip (SoC) implementations.”
Media Streamers on the Rise
Conversely, media streamers are in ascendance, with Futuresource forecasting 8% growth this year, to achieve 57 million units. As an early adopter of media streamers, North America will account for more than one in every three of those shipments in 2019.
“Consumer appetite for SVoD services such as Netflix and Amazon Prime Video continues to feed demand for media streamers, and the public’s interest shows no signs of waning,” says Rubin. “Hardware is dominated by the likes of Amazon, Google, Roku and Apple, who are all enjoying a plentiful wave of growth. Most mainstream Pay-TV operators won’t fully commit to existing media streaming devices, as, despite them being cheaper to adopt for the business, they lose control over the user interface and the ability to retain customers within their own content garden. Along with the brand erosion, there’s also the potential for diluting and impairing the user experience, something that many of the major players will not want to stake their reputations on.”