Set-top boxes on the wane as multiscreen deployments ramp up, says IHS

Pay-TV operators which implement multiscreen capabilities are likely to see set-top box usage fall dramatically as a result of the new viewing options available to their subscribers, according to US-based research firm IHS.

The study predicts that by 2015, just half (51%) of the devices used to access the world’s 43 largest pay-TV services with multiscreen options will be set-top boxes, with the remaining 49% to be made up of PCs, smartphones, tablets and other connected devices.

By comparison, around 82% of all devices used to access multiscreen pay-TV services in 2011 were set-top boxes, with the remaining 18% made up of less conventional connected devices, says the study.

IHS thus predicts that for the world’s largest cable, satellite and IPTV services who have undertaken multiscreen initiatives, set-top boxes will be superseded by other connected devices as subscribers’ preferred method of access by the end of 2016.

“A new era is dawning in the pay-TV industry, one in which subscribers can access television services on the device of their choosing, rather than being limited to using STBs,” said Tom Morrod, senior principal analyst, TV Technology, for IHS.

“Consumers desire greater flexibility, demanding access to entertainment on any platform, in any location and at any time. Because of this, cable, satellite and IPTV operators are shifting their focus away from the STB and toward multiscreen deployment.”

The global installed base of pay-TV set-top boxes associated with multiscreen operators is forecast to reach 321.7mn units in 2015, up 17% from 274.5mn in 2011. Meanwhile, multiscreen devices actively receiving pay-TV services will rise to 310.1mn, up more than 400% from 60.1mn in 2011.

This global installed STB base is however only part of the total installed base of set-top boxes, as many operators are still not actively pursuing multiscreen services.

IHS estimates that multiscreen operators accounted for around half of the global total of 538.8mn installed set-top boxes in 2011, and will represent only about one third of the 849mn in 2015.

While PCs were the most common devices associated with multiscreen pay-TV deployments last year, with iOS-based devices such as the iPad coming in second place, this picture is set to change dramatically by 2015, when the number of iOS devices accessing pay-TV services will rise by nearly 800%, while PCs will expand by only about half that rate.

Giving hot chase will be the Android platform, which is expected to see more than 1,200% growth in the number of devices connected to pay-TV services by 2015.

Among the other platforms, Microsoft’s Xbox has also been a focus for the pay-TV companies, along with Smart TVs from Samsung and LG, says IHS.

Editor’s view: The decision to implement multiscreen delivery obviously brings significant challenges for operators – they may well need to upgrade their delivery platforms, will face some tough conversations with their content partners, and need to think long and hard about business model specifics and pricing.

However, it also brings considerable benefits: less need to subsidise expensive set-top boxes, greater customer satisfaction and retention, and the ability to target new customers who might not be willing to commit to the lengthy service contract needed to justify a set-top box subsidy, but still interested in paying for some premium content.

BSkyB is one operator which has already realised this: having already gained valuable experience in OTT delivery through its Sky Go service, the company is preparing to launch a new pay-as-you-go service called ‘Now TV’ later this year which will be aimed at the middle ground of potential customers who are willing to pay for occasional access to premium sports and movies – more details here.

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