Pay-TV operators purchased $15.3 billion worth of set-top boxes (STBs) in 2014, down from $15.9 billion in 2013.
Shipments of pay-TV STBs grew slightly in 2014 to 204.7 million units, an increase of just under 1 percent from 203.1 million units in the previous year; however, such modest shipment growth failed to compensate for the effects of price erosion in this highly competitive market.
According to the latest IHS Set-Top Box Market Monitor report, there have already been several signs of increased STB consolidation in the first half of 2015, foreshadowing a declining market.
The market will contract further in 2015, falling to $15.1 billion and will continue falling to 13.2 billion in 2018, before stabilizing in 2019. Industry value will decline across nearly all segments, but the market for satellite pay TV STBs will sustain the most value and provide the most opportunity for vendors. Unlike cable and IPTV, the majority of satellite operators are not Internet service providers, so they cannot virtualize traditional STB functionality, such as DVR, into the cloud as readily. Satellite operators will instead need to invest in STB hardware, to enable advanced services that can compete with those offered by cable and Internet-protocol TV (IPTV) operators.
Continued pay-TV growth in Africa and the Middle East, as well as in South and Central America, will also provide STB opportunities over the forecast period.