Over the Top (OTT) Video Is Slowly Making Its Way to Set-top Boxes

Wednesday, November 24th, 2010 
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SCOTTSDALE, Ariz. — MPEG-4 AVC (H.264) set-top box shipments surpassed MPEG-2-only set-top box shipments for the first time in 2010, with about 53% MPEG-4 shipments worldwide. Despite the support for advanced encoding, however, pay-TV operators worldwide have been slow to support interactive features on set-top boxes.

Historically, they have only allowed managed video services, such as video-on-demand (VOD), along with a very few token applications such as weather, traffic and sports into their walled gardens. High-end boxes that shipped this year in the US and Europe will enable higher levels of interactivity, including next-generation EPGs (electronic program guides) and hybrid services, with many services slated to launch in early 2011.

“Set-top boxes are slowly catching up to consumer electronics devices which enable access to interactive services and over-the-top (OTT) content,” says ABI Research practice director Jason Blackwell. “In the US, operators are favoring their own ‘TV Everywhere’ platforms, including Comcast’s Xfinity, Dishonline.com, and U-verse, rather than supporting OTT video services. In Europe, Project Canvas and HbbTV are more open interactive TV platforms.

“More processing power is being tested in set-top boxes, including early tests of an Intel Corp. Atom-based platform. These high-powered boxes act as gateways with multiple tuners and support multi-room viewing with thin clients on other TVs in the household,” says ABI Research senior analyst Sam Rosen. “‘No new wire’ home networking standards are enabling deployment of these gateway devices.”

ABI Research’s “Global Set Top Box Markets” study provides a comprehensive worldwide view of STBs including both pay TV and FTA STBs for cable, satellite, Telco / IPTV, and terrestrial (DTT). It includes qualitative evaluations including FTA satellites and gray markets, digital transitions, and hybrid STBs. It addresses operator issues such as TV Everywhere, online video, CA and DRM technologies. It also discusses technology issues such as multi-room DVRs, home gateways and thin clients. Segmenting set-top box data by platform, unit shipment forecasts, and the market value of set-top boxes worldwide, it describes technology transitions, including high definition, broadcast standard (ATSC, DTMB, DVT-T, ISDB-T) and personal video recorders (PVR / DVR).

This report is included in ABI Research’s TV and Video Research Service.