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Hybrid Set-Top Boxes Offer New Hope for Pay-TV

Here in the U.S. market, 2011 was a year that many in the traditional pay-TV service provider industry would rather forget. That being said, this year will include more of the same challenges, where the fundamental value proposition is being questioned by subscribers.

There are some bright spots, however, where pay-TV providers can use new technology and additional capabilities to add value to their legacy offerings. Some may also create new lower-cost offerings.

Hybrid set top boxes are a fast-growing segment of the worldwide set top box market. These boxes include a TV tuner and an Internet connection -- with the latter used to access a multitude of on-demand video content.

Hybrid STBs are appearing in all pay-TV service categories with new usage scenarios and creative apps helping to provide some new service development momentum.

As consumer connected TVs begin employing applications that deliver low-cost video content via the Internet, hybrid set top boxes will emerge as an essential countermeasure for the traditional pay-TV sector.

According to the latest market study by NPD In-Stat, they now forecast that 100 million hybrid STBs will ship in 2015.

"As the STB industry continues its forward march, the next logical iteration is for the set top box to enhance and expand traditional TV-related services by permitting access to content from the Internet, or from Internet-like web services that provide a walled garden of authorized content," says Gerry Kaufhold, Research Director at NPD In-Stat.

By combining traditional TV services with much-needed enhancements that are delivered via broadband, pay-TV service providers hope that they can successfully compete with all the emerging over-the-top offerings -- such as Netflix and Hulu.

In-Stat's latest market research findings include:
  • Over 23 million hybrid STBs will ship in North America in 2012.
  • The Asia Pacific annual revenue will approach $1.5 billion in 2015.
  • Satellite hybrid STBs will represent 58 percent of the hybrid STB market in 2013.

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