Global shipments of over-the-top (OTT) set-top boxes (STBs) sold at retail — including Apple TV, Chromecast and Roku boxes — will overtake shipments of IPTV STBs used for pay TV services in 2015, according to a new report from IHS (www.ihs.com). This year, 31 million retail OTT STBs will be shipped, compared to 30 million IPTV STBs shipped by telcos, according to the research group.
“OTT STBs were initially written off as a temporary measure for consumers to bring OTT video to TV screens,” says Daniel Simmons director of connected home research at IHS Technology. “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.”
Based on the latest information from IHS Technology, the success of OTT STBs can be attributed to the content strategies of their respective vendors. 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 says.
Pay-TV operators have also embraced OTT by deploying their own Internet-connectable STBs and OTT services designed to compete with OTT video providers. 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.
This level of functionality has become a consumer expectation for pay TV services. Some Belgacom, Dish Network, Virgin Media and other pay TV operators have even started providing access to Netflix and other OTT video providers’ services.
Total shipments of connectable pay-TV STBs, which include Internet protocol television (IPTV) STBs, as well as cable TV STBs and digital terrestrial television (DTT) satellite STBs, have far outpaced shipments of OTT STBs. In 2018, connectable pay-TV STB shipments will grow to 169 million units, compared to 38 million retail OTT STB shipments.