STBs stagnate, but video gateways see double and triple-digit growth

Michelle Clancy | 14-03-2014

The overall set-top box (STB) market declined in 2013, but video gateways from pay-TV providers were a brightly shining exception to the overall fall-off, in both revenue and unit shipments.

Market research firm Infonetics Research found that the use of over-the-top (OTT) media servers is growing not only for consumer multimedia use in the home, but also for service providers delivering pay-TV services as an app over a broadband connection. As a result, it expects that global IP video gateway revenue will grow at a 79% compound annual growth rate (CAGR) from 2013 to 2018.

"Cable and satellite video gateways had a very strong year, with shipments growing 333% and 98%, respectively," said Jeff Heynen, principal analyst for broadband access and pay-TV at Infonetics Research.

The news is good for operators, as they look to cut deployment costs. "Video gateways collapse the STB and broadband CPE into a single device, and it's for this reason we expect to see a long-term shift to these devices, at least in North America, to reduce capex in multiple TV set homes," said Heynen.

Overall though, the global STB market including IP, cable, satellite, DTT STBs and OTT media servers totalled $18 billion in 2013, a decline of 10% from the previous year.

Pace closed out 2013 as the worldwide STB revenue and unit share leader, though ARRIS claimed the revenue share lead in 4Q13. Cisco, on the strength of its Telco IP STB sales, finished second in STB revenue in 2013.