Published on 21 Jul 2023
min read
The global set top box (STB) market size was estimated to be worth nearly USD 24 billion in 2022. While alternates continue to emerge, legacy STBs (cable, satellite, etc.) continue to be the primary devices deployed by the media operators worldwide for video content delivery.
We have already witnessed a trend where IP-based video services are taking up linear TV subscriber share. Traditional STBs have therefore transitioned to a hybrid (Linear with IP services) model, with a growing expectation that most of the new products will be built with IP services, besides being packaged with popular and regional OTT platforms.
However, due to the rapid rise of OTT subscriptions, the global content consumption patterns have continued to evolve. Today, video content is being watched across multiple devices, including, mobile devices, Smart TVs, Tablets, and Laptops etc. Often, these devices are unlinked to any particular media operator.
This has had an impact on the potential of growth for the global STB market, predicted to be at around a steady CAGR 3% till 2030. With this fragmented device market, the question arises, what could be the possible and future models for pay TV Operators?
A significant section of viewers today prefers large-screen smart devices for their media consumption requirements, especially for watching sports events or enjoying an enhanced A/V experience. However, demographically, it is often the younger generations who are driving a trend toward consuming content on handheld devices. .
As a result, while STBs continue to roll out, there is a fairly large number of other devices available today for accessing video services. The question then arises that how global media operators can offer their services to this independent device segment and drive market differentiation. One possibility here is to build a solution to onboard such subscribers.
This brings us to the idea of a media device model.
A media device model involves a distinct 'platformization’ of the current video and audio services. As compared to existing delivery paradigms that often tie the content with the STB, we arrive at a scenario where the media streams are independently available across devices, as long as the consumer has a live subscription.
Onboarding media consumers to the operator’s media platform, rather than ensuring a tie-in with a unique STB, allows existing non-STB subscribers to latch onto the media operator’s services. This includes access to the overall user experience, regional and global channels, sports, lifestyle video content, application store, and the ability to drive personalization at scale. In addition to embracing such an onboarding solution, global media operators may also have to adopt and introduce innovative economical subscription models according to age group and devices. These alternate platform subscriptions plans would play a key role in attracting subscribers of all ages across multiple form factors of devices.
By essentially unlinking their services from the existing restrictions around using specified STB, the media companies would therefore have the ability to tap into a vast body of potential subscribers, a number that has continued to grow consistently in the aftermath of the post pandemic era.
If one were to look at the current trends shaping across the global media landscape, it is evident that there are already quite a few popular TV and Mobile platforms which are helping minimize the overhead of maintaining multiple media device onboarding solutions. Whether this would mean that the industry spending on STBs is going to be limited and the technology is ready for alternatives, however, is worth pondering over.
Device-specific media loyalty continues to be strong, and while the trend toward ‘platformization’ is picking up, there are significant underserved sections who are yet to adopt and redefine their media consumption patterns. What we would therefore need, perhaps, is the emergence of new business models that are capable of balancing the requirements of the target audience with the goals of the media houses. This could even include such innovative ideas like “Bring Any Device,” allowing the users to enjoy the services of a particular media company on any device of their choice without tying in closely with a STB.
The emerging ecosystem could also be defined further to very great extent by the services and efforts of capable engineering technology and R&D partners. They would play a key role in streamlining the transition from existing paradigms and helping unlock new value channels across geographies, driving the future of the media device model.
