According to Futuresource Consulting the traditional pay-TV STB will remain a fixture in homes worldwide, as operators counter the threat posed by media streamers by adding features such as SVoD and 4k UHD services, voice search and smart home functionality.
Worldwide media box shipments, which include both STBs and media streamers including Amazon Fire TV, Google Chromecast and Apple TV plus others, totalled 339 million units in 2016 with STBs comprising 86% of demand, which is a percentage Futuresource believes is unlikely to drop in 2017. The total value of the media box market rose to $21 billion in 2016. However, the traditional STB remains under threat from many competing connected devices, including media streamers, games consoles and smart TVs, all of which can provide access to content from a variety of sources.
Futuresource predicts that by 2021, over 80% of media box demand will still be accounted for by STBs, the result of operator roll-outs of upgraded boxes to their current subscribers and to new subscribers in less mature markets.
While cord cutting is starting to take effect in the US, Futuresource expects STB demand from operators there to remain stable as a result of pay-TV operator mergers, a move from cable to IP delivery and the roll-out of 4K UHD STBs. The market for boxes will remain flat in the US with a 0% CAGR until 2021, while cord cutting has yet to impact European markets to a significant degree. Meanwhile, demand for media streamers is on track to grow by 14% in 2017. They are proving popular in many markets, giving access to a wide variety of both mainstream and niche content.
Futuresource market analyst and report author, David Tett, believes that despite the costs, pay-TV STBs have the advantage of offering a one-stop shop to a wide range of curated content that is easily accessed via a single remote control and using a single HDMI port, and operators will continue to deploy STBs for their full-service subscribers, but increasingly roll-out a low-cost entry pay-TV package to media streaming boxes in order to extend the reach of their content.
Tett believes that there is a battle between different brands of media streamer in the US and Western Europe where consumers want access to many services, but no single media streamer has them all.
Analyst Comment
I have met analysts who believe that the Smart TV will replace STBs, but I don’t see it. As I have said for some time, your Smart TV becomes your Stupid TV in around three years. Operators also want to control the user experience. Of course, for some markets where costs absolutely have to be minimised, then perhaps there is a case to leave it to the TV.
Again, apologies to long term readers if I’m repeating, but the same was said about graphics cards. I worked for a company that got out of graphics cards partly because there was a feeling that integrated graphics would be ‘good enough’ and nobody would buy add-on cards. That was nearly 30 years ago. (BR)
