US research group IMS, well known for keeping a tighter count on set tops than anyone else in the US, says that set top box shipments will grow 10% this year, and that the shipments are entirely recession proof.
Stephen Froehlich, the analyst who wrote the report said ‘Television remains one of the most economic forms of entertainment available and is traditionally one of the last expenses to be cut in tough times, making set-top boxes is one of the few growth areas to be found in consumer electronics at the moment.’
IMS says the growth of digital TV households will continue because many new markets are just getting digital services for the first time. This is of course obviously true in some parts of the world. India and China have great pent up demand, moving from a weak broadcasting market, and a market of analog cable, to digital cable TV and in India’s case imminent DTH invasion.
Only last week Dishtv in India said that it had now reached 5 million homes, having acquired 3 million customers in just one year and that it will pass 8 million subscribers by the end of 2010 so we can support that idea.
Of course these mass markets are exceptionally low priced markets, and device manufacturers have to take special care, usually resulting in local manufacturing deals, in order to supply these markets profitably
Already massive currency fluctuations have affected set top makers, where most components are now quoted in US dollars, because it is a strengthening currency, while sales are in local currencies, causing widespread margin fluctuation.
Of course the US market itself is fresh from a massive campaign to shift around 30 million analog devices over to its new ATSC digital TV services, which has led the incoming administration floundering to support the last 6.5 million households which have not yet managed the transition. All of those figures will be contained in the IMS numbers as well, as will be other markets mid-shift between analog and digital terrestrial services in almost 40 countries which are moving to DVB-T technologies. These however, for the most part are digital TV service, but they are not pay TV services.
IMS say that new digital TV services, including HD, are also driving digital TV uptake, and says that worldwide digital TV households will still see 20% growth over 2008. However that doesn’t necessarily mean that pay TV in globally on the up, although IMS thinks so.
Froehlich continues, ‘Not only are North American and Western European households keeping their subscriptions, developing countries have seen unprecedented adoption of digital pay-TV services in the last half of 2008.
He concedes that set-top revenues are already near their peak, which he forecasts at $19 billion in 2011, and prices are set to decline by at least 10% a year after that.