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  4. > The Future of STBs : Challenges and prospects in an IP world


In recent years, television STBs have experienced many changes related to the ever-growing supply of digital TV services and the profound changes we are seeing in how video is consumed. With the growth of IP and competitive OTT offerings, technological advances in both software and hardware, and the emergence of new competitors, the future role of STBs in homes is now under scrutiny. IDATE reports on the TV STB market by analysing the current situation and significant developments in technology, consumption and regulation. The report looks at existing business models, the impact of broadband's expansion and various market dynamics depending on the type of network used. It also details the various disruptive factors affecting the future of STBs and offers various scenarios for their role in homes by 2025.


The television STB market has diversified greatly over recent years with a multitude of new services on offer and advanced functionality promised by the digital home. The significant growth of streaming video devices, including TV dongles, has also cemented the presence of new entrants from the Internet. STB sales and their installed base have not yet been affected by these developments, and currently still depend on TV market fundamentals, namely TV access methods and the level of digitisation, which vary considerably depending on the global geographic region.

Table Of Contents

The Future of STBs : Challenges and prospects in an IP world
1. Executive Summary 6
2. Methodology and definitions 8
2.1. General methodology of IDATE's reports 8
2.2. Methodology specific to this report 9
3. Structure of the TV and video device market 10
3.1. Market overview 10
3.1.1. Market segmentation 10
3.1.2. Constantly expanding range of services available to consumers 12
3.2. Estimate of the current TV STB market 16
3.2.1. The TV STB market by network 16
3.2.2. The TV STB market by region 19
4. Drivers of change 22
4.1. Technological developments 22
4.1.1. Integration of an IP-based environment 22
4.1.2. New security solutions 24
4.1.3. Performance increases in signal processing 25
4.2. Consumption habits 26
4.2.1. Any Time: non-linear viewing habits constantly growing 26
4.2.2. Anywhere: access to content no longer limited to living rooms 27
4.2.3. Any device: multi-screen consumption at the expense of main TV consumption 27
4.2.4. Any Content: abundant offerings and growing interest in online video content 27
4.3. Regulatory environment 28
4.3.1. Legal obligations related to the digital transition 28
4.3.2. Devices creating competition for STBs 28
4.3.3. The Net Neutrality debate 29
5. Industry organisation and strategy 30
5.1. Industry structure 30
5.1.1. The changing needs of STBs by network 30
5.1.2. The Internet's impact on the STB market 33
5.1.3. Business models 35
5.2. Case studies 37
5.2.1. Device positioning by segment 37
5.2.2. Case studies 38
5.3. Strategic analysis 46
5.3.1. The role of STBs is being challenged with the new video consumption environment 46
5.3.2. The broadcast market is a precursor 46
5.3.3. New options for cable and IPTV networks 46
5.3.4. A shift towards improved operational flexibility 46
5.3.5. Interface wars 46
5.3.6. Long-term evolution 47
6. 2025 scenarios 48
6.1. Analysis of disruptive factors 48
6.2. Three TV STB scenarios over the next ten years 49

Tables and Figures

Table 1: Summary of Numericable-SFR's cloud gaming offering via its STB 15
Table 2: Annual sales of digital STBs in 2014, by region 19
Table 3: Distribution of bandwidth consumption during peak hours, North America 29
Table 4: Availability of two OTT television services (with live programming) from satellite pay-TV operators 34

Figure 1: Example of a Headed MHG with several video outputs (LaBox from Numericable) 10
Figure 2: Example of a Headless MHG, without any video outputs (Freebox Server) 11
Figure 3: Sony's triple-tuner TV (cable, terrestrial, satellite) 11
Figure 4: Examples of a streaming box and HDMI dongle 12
Figure 5: Example of recording a complete series from an STB 12
Figure 6: UPC Ireland's multi-room service 13
Figure 7: Swisscom TV's application 14
Figure 8: Example of a hard drive pre-loaded with 4K movies (Samsung) 14
Figure 9: Tata Sky 4K STB 14
Figure 10: Example of an online radio service integrated into an STB 15
Figure 11: Example of video surveillance solution integrated into an MHG 16
Figure 12: Digital STB sales worldwide in 2014, by STB type, 2014 16
Figure 13: STB installed base (analogue + digital), worldwide, 2010-2014 17
Figure 14: Cable STB installed base (analogue + digital), worldwide, 2010-2014 17
Figure 15: Satellite STB installed base (analogue + digital), worldwide, 2010-2014 17
Figure 16: Terrestrial STB installed base (analogue + digital), worldwide, 2010-2014 18
Figure 17: IPTV STB installed base (analogue + digital), worldwide, 2010-2014 18
Figure 18: Growth of the digital STB installed base by region, 2010-2014 19
Figure 19: Digital STB sales in North America 20
Figure 20: Digital STB sales in Europe 20
Figure 21: Digital STB sales in Asia-Pacific 21
Figure 22: Digital STB sales in Latin America 21
Figure 23: How the SAT>IP protocol works 23
Figure 24: Panasonic TV equipped with SAT>IP 23
Figure 25: How a Common Interface system works with a CAM manufactured by Aston for Fransat 24
Figure 26: Expected compression gains with HEVC, 25
Figure 27: Linear and non-linear consumption in the United States, 2012-2014 26
Figure 28: Proportion of non-linear consumption of an FX television series 26
Figure 29: Weekly multi-screen consumption duration 27
Figure 30: Example of a CableCARD-compatible TV 29
Figure 31: Video consumption growth in Internet traffic in the United States, 2013-2018 29
Figure 32: Theoretical migratory plan to an IP model for cable operators 31
Figure 33: Breakdown of terrestrial FTA and pay-TV homes worldwide, 2014 32
Figure 34: Example of a hybrid DTT STB offered by TiVo 32
Figure 35: Interface of Channel Master's over-the-air hybrid STB 32
Figure 36: Triple play service via LTE offered by Indian operator Reliance Jio 33
Figure 37: The Speedport Hybrid LTE modem from Deutsche Telekom 33
Figure 38: Comparison between the STBs provided as part of DirecTV's and Dish's pay-TV offerings, according to
the two providers 35
Figure 39: Example of Sky's pricing policy for their STBs 36
Figure 40: Device positioning by segment 37
Figure 41: All-IP Xi3 STB, HDMI-only (Pace) 38
Figure 42: Hybrid DTT STB developed by Netgem 39
Figure 43: Integration of the operator at the heart of the TV 40
Figure 44: Roku 3 41
Figure 45: TCL 4K TV with 'Roku TV' technology integrated 41
Figure 46: How Samsung's integrated TV works 42
Figure 47: Sky+ HD STB 43
Figure 48: Horizon Media STB 44
Figure 49: Hybrid LTE/DTT STB 45
Figure 50: Conditions affecting the three TV STB scenarios over the next ten years 49

List of players examined

Comcast X1 Entertainment Operating System
Netgem, hybrid TV STBs
TeliaSonera / Samsung
Samsung Integrated TV set
UPC horizon TV
Svelte, hybrid LTE STB)

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