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Digital Multi-Channel TV Fueling STB Growth

The pay-TV service provider demand for set top boxes (STB) continues to rise, with more than 65 million cable, satellite and IPTV digital STBs shipped globally last year.

And, the global market is on track to grow at 13 percent CAAGR to 120 million annual shipments by 2011 -- as the television world moves towards the all-digital age, according to a new study by Understanding & Solutions.

These figures exclude Digital Terrestrial Adapters and Free-To-Air (FTA) Satellite receivers, which together helped drive the total worldwide STB market to 115 million units in 2006 and will fuel further growth as over-the-air broadcast markets move towards Analogue Switch Off (ASO) at the end of this decade.

STB demand is being fuelled by the continuing global rollout of digital multi-channel TV services. The STB gives pay-TV service providers a secure platform enabling them to push added value services like High Definition (HD), PVR (Personal Video Recorder), Video on Demand (VoD) and Multi-Room.

In competitive pay-TV markets, new entrants must invariably deploy STB technology to break into the market against established operators at present.

Going forward, Understanding & Solutions predicts that the pay-TV STB market will be sustained by upgrade of the maturing digital satellite market, high growth for digital cable -- largely driven by the conversion of analogue customers -- and new market growth from IPTV as Telcos and other BSPs (Broadband Service Providers) evolve into the digital video services arena.

"The growth of Online TV and Video is both a threat and opportunity to the STB industry," says Andrew Carroll, Consultant at Understanding & Solutions. "Broadband may possibly impact the need for dedicated digital TV infrastructure long term, but, for the next 2-3 years at least, subscription service providers actually see the STB as a way to network and integrate broadcast and IP (Internet Protocol) services into one seamless any content, any screen proposition for customers."

Security and QoS (Quality of Service) will remain key STB added value elements. Live broadcasting will remain a key reason for dedicated services infrastructure for several years in a period of increasing load on the Internet as Video and TV traffic continues to mushroom.

Understanding & Solutions believes that the STB industry is also challenged by a drive towards open systems, such as interactive CableCard in the U.S. market. This capability can allow consumer electronics products like TV receivers to interface to subscription networks by the addition of a simple Conditional Access Module (CAM).

However, industry research by Understanding & Solutions suggests that the impact of this will be generally limited, at least for the next 2-3 years. Service providers are likely to continue to use STBs as competitive levers in the battle to acquire and retain subscribers, at least for the next 2-3 years.

Added value features and network services enabled by STBs will become increasingly important competitive differentiators as well as the traditional elements of Content choice and/or exclusivity.

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