OTT media server sales soar as STB revenues dip

Editor | 17 June 2014

Q1 2014 was a tough first quarter for CE sales according to a survey from research firm Infonetics Research.

In its Set-Top Boxes and Pay TV Subscribers report tracking IP video, cable, satellite, and digital terrestrial (DTT) set-top boxes (STBs) and over-the-top (OTT) media servers the analyst calculated that the global STB revenue totalled $4.8 billion in Q1 2014, a 3% decline compared with the previous quarter. Yet encouragingly, STBs in the tough cable sector actually saw a rise in both unit and revenue growth in 1Q14, each up 5%. Further good news came in the over OTT media server segment which Infonetics calculates will grow from 6% of global STB revenue in 1Q14 to 14% by 2018.

In terms of key players and regions, Arris took advantage of the HDTV cable STB refresh cycle underway at North American cable operators and finished 1Q14 as the STB market share leader for the third consecutive quarter in a market that commanded the largest portion of STB revenue. That said, Asia Pacific is projected to close to within three percentage points by 2018, driven by a penetration of advanced services such as HDTV and OTT, which will set in motion an upgrade cycle.

The report also found that IPTV providers are planning significant uptake of set-top boxes with 802.11ac in 2015 with emerging markets driving growth in a pay-TV market where operators are looking to deploy second screen' apps.

"There was a pocket of strength in the set-top box market in the seasonally weak first quarter. North American cable operators stepped up spending again on top of successive sequential revenue increases as they transitioned higher-end multi-play subscribers to headed and headless video gateways and replaced aging, power-hungry standard definition boxes with more efficient high definition boxes," commented Jeff Heynen, principal analyst for broadband access and pay-TV at Infonetics Research. "A boost in overall STB unit shipments this year will come from an increase in over-the-top media servers as service providers in China and other emerging markets use these devices to deliver live streaming TV."