Worldwide digital STB shipment revenue last year totalled $20.3 billion, up 3% from $19.6 billion in 2012. Revenue will set new highs during the next two years and will peak at $22.8 billion in 2015. This follows the period from 2010 through 2012 when revenue remained in the $19.5 billion range.
“Far from being pushed out of the living room by internet-enabled consumer electronics, STBs are being repositioned as the hub of the connected home," says IHS' Daniel Simmons, "combining support for pay-TV services with internet access, residential gateway services, Wi-Fi and other advanced features.”
These multi-media hub gateways - MHGs as they're called - are being used by service providers to transition from a legacy broadcast-based pay-TV experience to one that is internet-centric and better positioned to compete with over-the-top (OTT) rivals such as Amazon and Netflix. UK STB manufacturer Pace had MHG market share of more than 48% in 2013.
This strong MHG performance also helped Pace retain its global No.1 status in terms of units shipped in 2013. Cisco continued to lead the global pay-TV STB market in revenue terms.
The market dynamics for STBs are complex and vary considerably from territory to territory, but ultimately depend on individual pay-TV operator strategies and developments in the wider media and consumer electronics industries.
US STB revenue will continue to grow until 2015 as Comcast, DirecTV and Dish Network expedite their MHG deployments, driving the higher end of the market.
Chinese and Indian cable TV digitisation and the International Telecommunication Union’s (ITU) GE06 deadline in 2015 for the analogue terrestrial TV switch-off will continue to drive large volumes of lower-value boxes. However, many of these projects will near completion in 2015 and the market will contract to $20.7 billion by 2018.
Despite this midterm blip, the longer-term view is more positive, with ultra-high-definition (UHD) STBs using high efficiency video codec (HEVC) becoming significant toward the end of the forecast period. IHS expects pay-TV operators to purchase 13 million UHD STBs in 2018.