The share of content broadcast over the internet and over the other air platforms is likely to grow during the forecast period.
Changing consumer preferences for technologically advanced equipment and the increasing internet penetration with improving wireless connectivity have brought several transformations in the smart STB market. Also, the improving economic scenario, coupled with growing disposable income and improving standards of living globally, has significantly affected smart STBs. The share of content broadcast over the internet and IP & OTT platforms is increasing, primarily driven by the increasing adoption of internet services globally and the awareness regarding the availability of entertainment content in this medium.
Further, the smart STB market is witnessing high consolidation, where several vendors are focusing on mergers and acquisitions to strengthen the portfolio. For instance, Technicolor’s acquisition of Cisco’s set-top box division, Arris acquiring Pace, and later the acquisition of Arris by CommScope played a significant role in market growth. Also, the growing construction activities in residential and hospitality sector is expected to increase the demand for smart set-top boxes. The smart STB market is likely to reach around $2 billion by 2024, growing at a CAGR of approximately 8% during 2018–2024.
SMART STB MARKET: DYNAMICS
The global audio/video traffic is expected to reach 84.66% of the overall internet traffic by 2021.
The growth of the entertainment industry, coupled with technological evolution has revolutionized broadcast content. The smart STB market is constantly witnessing enhancements due to the adoption of new technology, high-speed internet penetration, and the rise of the digitization trend in emerging economies. The increasing awareness in developed as well as developing economies is increasing the demand for HD content over linear as well as IP and OTT channels. Netflix’s share of internet traffic in North America has grown and accounted for 37% of data flow to consumers during peak times. Similarly, OTT service providers such as YouTube and subscription-based digital content providers - Spotify - have also acted as a catalyst for the growth of audio and video content. The global audio/video traffic is expected to reach 84.66% of the overall internet traffic by 2021.
Besides, the digitization of cable networks in high population countries has also increased the demand for smart set-top boxes. Also, the emergence of new smartphone and online platforms and digital pathways is supporting operators to provide cloud-based non-linear and on-demand services, thereby offering a high potential and growth for the smart STB market during the forecast period.
SMART STB MARKET SEGMENTATION
The market research report includes a detailed segmentation of smart set top box market by
SMART STB MARKET TECHNOLOGY
The shift of consumers towards non-linear and on-demand internet protocol content is a major driver for the IPTV segment.
The smart STB market by technology can be segmented into OTT, IPTV, and Hybrid. The IPTV segment captured more than one-third of the global smart set top box market in 2018 and is expected to grow at a CAGR of around 6% during the forecast period. IPTV allows the user to watch linear television content broadcast over cable, satellite, or broadband as well as over the internet. The increasing adoption of digital streaming devices, which can be connected to the TV, is the primary growth driver for the segment. YouTube, Netflix, and Amazon Prime are the most popular platforms, which are gaining prominence in terms of content and delivery, thereby fueling demand for smart STB devices.
IPTV is another popular technology, which is delivering the content through dedicated and private networks, such as VPN. It allows the user to watch online content without any buffering. Hybrid smart set-top boxes are streaming the TV channels offered by broadcasting service providers, including cable and satellite, over-the-top content streaming. It is prevalent among commercial users as it allows commercial end-users to offer a broad portfolio of services to its clients. Evolution Digital, an US based company is gradually increasing its presence in the hybrid set top box market. Hospitality, educational, and residential buildings are the largest end-users of the hybrid STBs.
SMART STB MARKET: END-USER
The rise of hospitality and education industries is driving the demand for smart STBs in the commercial segment.
The smart STB market by end-user can be segmented into residential and commercial. The residential segment has a large market share in the smart set top box market by end-user and is expected to grow at a CAGR of around 8% during the forecast period. Increased internet penetration, government mandates for digitization regulations, and the shift from linear TV to non-linear and on-demand content have contributed to the significant growth of the segment.
Further, the rise of hospitality and education industries is driving the demand for smart STBs in the commercial segment. The increasing trend of online classes and the advent of e-learning and digital classrooms have further contributed to the growth of the segment.
SMART STB MARKET: DISTRIBUTION
Online stores offer more options and impart less bias toward non-sponsored products than retail stores.
The smart STB market by distribution channel is segmented into retail and online segments. In 2018, the retail segment contributed to the highest market revenue globally. The distribution environment is rapidly evolving with systems, and processes are being upgraded at a rapid pace. Changes are being spurred by expanding competition, accelerating digitization, constant disintermediation, and consumerization of expectations. This is expected to continue further with the focus on lowering costs, improving efficiencies, and opening to new opportunities.
The growth of online sales is set to increase at a steady rate during the forecast period as online stores offer more options to choose from and impart less bias toward non-sponsored products than retail stores. Several consumers that are avid users of e-tailing services seek to buy STB devices online because of the ease-of-accessibility and convenience afforded by such channels. The global set top box market sale is growing at a CAGR of 9% during the forecast period.
SMART STB MARKET: GEOGRAPHY
An estimated 50% of TV households in Latin America still have the sole connection of traditional and linear cable TV.
The smart STB market by geography can be segmented into APAC, Europe, Latin America, MEA, and North America. Europe accounts for the largest share in the global smart set top box market, which is expected to grow at a CAGR of around 7% during the forecast period. The region is witnessing an increase in the per capita disposable income of end-consumers, thereby driving the retail market in the region.
Further, the smart STB market in North America is primarily driven by the early adoption of technological advancement, the presence of a large number of major players, and the increased disposable income. However, the high cost of branded products with high retail pricing in the APAC region is the major growth inhibitors for the market. The smart set top box market in Latin America is facing growth restraints as the consumers are not switching from the traditional cable TV. Although OTT streaming services are witnessing high growth in the market, an estimated 50% of the TV households in Latin America still have a sole connection of traditional and linear cable TV.
The smart set top box market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:
- North America
- China SAR
- South korea
- Latin America
- The Middle East & Africa