|By Business Wire||
|June 13, 2014 12:49 PM EDT||
Pay TV Operators are at the top of the set-top box food chain, with hardware OEMs and semiconductor vendors both functioning in a supporting role. The largest operators are responsible for the functional definition and direction, and have significant ownership over at least the logical layers of the implementation. Multi-source supply agreements, in which operators purchase functionally equivalent units from multiple vendors, are the norm today. Therefore, operators have multiple bids whenever they need to purchase new units.
“The current large scale pay TV operators we are seeing, including Comcast-Time Warner, AT&T-DirecTV, and Liberty Global’s acquisition of Virgin Media and Ziggo, will in the long term better align set-top box requirements across larger markets,” notes ABI Research practice director Sam Rosen. “Hybrid set-top boxes, which leverage cable or satellite as well as IP capabilities, have largely become the norm in mature markets – but will be more important from a service delivery perspective especially as the result of the AT&T-DirecTV merger.” ADB Global and Netgem, two European OEMs collectively responsible for only 3% of the market, are two vendors who have led truly multi-network boxes.
RDK, a joint venture of Comcast, Time Warner and Liberty Global, is developing a shared source operating system for set-top boxes. “Similar to the impact of Android in the smartphone market, RDK will improve compatibility between different hardware boxes and even down to the set-top box chipset level,” continued Rosen. “While today’s set-top box market is highly fragmented, these common platforms will enable efficiencies leading both consolidation through further mergers and acquisitions, but will also force some natural consolidation.”
ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.
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