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STB Outlook Stable, Whilst Media Streamer Demand Continues to Grow
Set-Top Box and Media Streamers Market Analysis and Commentary
26 Sep 2017 - The traditional Pay-TV Set-Top Box (STB) will remain a fixture in consumer homes worldwide, as operators counter the threat posed by media streamers by adding features such as SVOD services, voice search and smart home functionality, according to Futuresource Consulting in its new report 'Worldwide Media Box Market: The Outlook for Set-Top Boxes and Media Streamers'.
Worldwide media box shipments, which include both STBs and media streamers (such as Amazon Fire TV, Google Chromecast and Apple TV), totalled 339 million units in 2016 with STBs comprising 86% of demand – a share unlikely to dip in 2017, while 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.
"In order to compete and remain as the centre of the living room, new features are being added to STBs - notably SVoD and voice services, along with upgrades concerning 4K UHD," comments Futuresource Market Analyst and report author, David Tett.
By 2021, Futuresource concludes that 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 (for the purposes of supplying 4K, OTT, and Home Gateway features) and to new subscribers in less mature markets.
"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," says Tett. "Operators will continue to deploy STBs for their full-service subscribers, but increasingly roll-out Pay-TV Lite (low cost entry level Pay-TV package) services to media streaming boxes in order to extend the reach of their content."
The growth in activity around cord cutting and subscriptions to over-the-top (OTT) services has initiated great debate about the relevance of STBs provided by pay-TV operators. 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 U.S, 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% this year. They are proving popular in many markets, giving access to a wide variety of both mainstream and niche content. They often provide a straightforward and better maintained interface than Smart TVs. "There is a battle to be a permanent feature in an HDMI connection between different brands of media streamer in the US and Western Europe," says Tett. "Multiple ownership is high in these markets as consumers want access to many services, but no single media streamer has them all. As a result, some consumers have more HDMI devices than their TV set can handle."
This new report examines the outlook for media streamers along with Pay and Free-to-Air TV Set-Top boxes. The drivers and inhibitors for both types of device are explored and forecasts are supplied through to 2021. The analysis draws on industry interviews and consumer research conducted during Q2/Q3 2017.
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Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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