OTT STBs to outpace IPTV-based market by end 2015 | OTT | News | Rapid TV News
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The growing influence, that is rapid growth into the mainstream, of over-the-top (OTT) has been demonstrated by IHS Technology research into the set-top box (STB) market.

According to the Set-Top Box Market Monitor report, 31 million retail OTT STBs — such as Apple TV, Chromecast and Roku boxes — will have shipped during 2015 compared with 30 million from the IPTV sector.

"OTT STBs were initially written off as a temporary measure for consumers to bring OTT video to TV screens," commented IHS Technology director of connected home research, Daniel Simmons.

"It was assumed that smart TVs, Blu-Ray disc players and gaming consoles would eventually take the place of STB devices; however, while consumer adoption of smart devices has grown considerably, OTT STBs have still managed to flourish."

Offering more explanation as for why this trend was occurring, the analyst suggested that companies such as Apple, Google and Roku have been much more aggressive in adding new content sources and apps to their STBs than TV and gaming console vendors have to their devices. "Ultimately buying a dedicated box enables viewers to choose the OTT services they watch on their TV, rather than simply living with the pre-installed options," Simmons added.

IHS also noted that pay-TV operators have also embraced OTT by deploying their own Internet-connectable STBs and OTT services designed to compete with OTT video providers. It said that operators are increasingly relying on OTT capabilities in their STBs to enable catch-up TV, larger video-on-demand (VOD) libraries, as well as search, recommendation and other content discovery features.

Despite the growing success of the OTT sector in terms of retail CE, IHS calculated that total shipments of connectable pay-TV STBs, which include IPTV STBs, as well as cable TV STBs and digital terrestrial television (DTT) satellite STBs, have far outpaced shipments of OTT STBs. It predicts that by 2018, connectable pay-TV STB shipments will grow to 169 million units, compared with 38 million retail OTT STB shipments. Yet the analyst also cautioned that as global pay-TV markets hit saturation, total pay-TV STB shipments will decline 5% to 197 million units shipped between 2014 and 2018.

"Connectable pay-TV STBs will provide an important opportunity for STB vendors to grow their business, despite this overall decline," Simmons suggested. "Pay-TV operators have a strong incentive to be the primary content aggregator in the household. Given the rate at which pay TV operators are integrating OTT services alongside traditional pay-TV features on their STBS, it's likely that pay-TV STBs will prove to be a bigger threat than smart TVs to the retail OTT STB market."