Demand for high-definition services boosts TV industry

The rise of high-definition television is set to soar over the next decade despite the economic crisis, according to Pace, which makes set-top boxes for companies including Sky,

Neil Gaydon, CEO of Pace, said that HDTV will become all pervasive. It is not mass market yet but it is a question of when, not if. He expressed his concern that despite the worsening economic conditions, especially hitting electronics companies in Asia, the high-definition television industry is bullish. Bill Gates, Founder of Microsoft in Consumer Electronics Show, 2008 said that HDTV would be everywhere by 2018. In UK, seven million households currently have HD-ready TV screens, a number that is expected to double by the end of the decade. Vincent L?©tang, a senior analyst at Screen Digest, said that the growth will probably be quite sluggish over the next few years. The real mass market level will be in the second half of the next decade."

UK based Sky has invested heavily in pushing the next generation of TV since introducing its service in 2006. Initially, customers were put off by the cost of the set-top boxes. Analysts agree that the economic downturn has done little to slow the growth of HDTV. Elroy Jopling, Research Director at Gartner, said that it is the old cocoon phenomenon. He said when times are tough, people stay close to home and high-definition screens still rolls off the shelves as people spend less on going out and so broadcasters benefited from the trend in TV sales. Traditionally, consumers replaced televisions every seven to nine years. The advent of flat-screen technology, which has become affordable in recent years, has seen a wave of customers buying. Almost all of the LCD and plasma screen televisions are HD-ready.

So, many customers already have the technology in their homes, and it is up to the providers to convince them to subscribe to HDTV. People are buying bigger flat panel which exposes the limitations of standard-definition. US have more than 100 HD channels and almost all shows now produced in HDTV. US growth was driven by sports, and there will be an uptick in the UK in 2010 in the run up to the World Cup.

IP set-top boxes to generate more than USD 3 billion in market value by 2014

In line with the global phenomenon of switching over from analog to digital TV services, set-top boxes now have a more crucial role in the home for accessing of entertainment and information services provided by television service operators. This is especially apparent in mature high-speed Internet economies where service providers strive towards providing interactive bi-directional television, thereby leading to the growth of IP set-top boxes. IP STBs are expected to generate a market value above USD 3 billion by 2014.

This analog-digital switch over has also brought about a progressive momentum towards sophisticated box types as well as advanced compression technologies. Shipments of basic boxes across all television platforms have declined and will continue to fall throughout the six-year forecast period. In contrast, shipments of boxes with HD capabilities and MPEG-4 compression technologies- including HD hybrids-will head north. This is closely associated with consumers' thirst for higher quality content which is often satisfied through HD quality videos. The increased ownership of HDTVs especially in the homes of technologically advanced nations is a good indicator of where the market is heading.

Vendors strategies for retaining their market shares are targeted towards emerging technologies such as HDTV, IPTV, and digital TV, as these are expected to be the main driving forces for STB sales in the coming years.