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coverstory_cover story 20/08/2014 11:27 Page 3 most popular form of consumption, broadcast will remain the most efficient way of delivering such major TV channels for many years to come. This will drive the continued need and popularity of STBs and IDTVs, and the development of Home Gateways. The cloud could start to replace some services such as PVRs, where programme rights and legislation allow, though consumer adoption will take some time. Home Gateway Initiative: The Home Gateway is an essential hardware and software building block in the digital home, connecting consumers with broadband access, multiple end devices and many services. Cloud services need interconnection and APIs to control and manage home based important trend in the media industry as it offers many benefits to both service providers and consumers. However, we believe having a powerful STB or home gateway in the home is still one of the best strategic decisions operators can make to give both consumers and themselves the most flexibility now and to be ready for the future. Internet connected Smart TVs can enable broadcasters and other service providers (not only pay-TV) to use IP and cloud services to supply services directly to the consumer though branded experiences, offering new ways to boost viewer numbers and improve customer engagement and loyalty. Irdeto expects that Smart TVs will continue to grow in importance, due to screen size, quality and their social function in the home. This is a fact borne out in Irdeto research at IBC last year which found that 41% of industry professionals see Smart TVs as crucial to future strategy for operators, compared to 33% for tablets and 12% for smartphones. Kaltura: Usage of the big screen will get more and more common, as OTT is shifting from second screen to the first screen. Home Gateways and Smart TVs will be more popular and gain more market share than they do now. Rovi: STBs and Home Gateways are likely to diminish in value as Consumer devices such as Smart TVs and Mobile become increasing capable, armed with CI+ interfaces, and support IP-based DRM. Cloud-based content delivery and DVR solutions will improve to the point that a Smart TV, game console, or mobile device, bundled with the correct application, will match today’s experiences. S3 Group: The scalability and flexibility of the cloud will result in many of the functions required of the end-to-end TV platform migrating over time from the home devices into the cloud. However, the receiver devices in the home will continue to have a critical role to play as the ultimate influence over the end user experience; all the most amazing cloud-based technology in the world is worth “Shifting to the cloud is definitely an important trend in the media industry” devices and data. While over-the-top approaches and proprietary cloud-home APIs are commonly seen, the industry is also assessing opportunities for standardised interfaces that will help build a wider, more interoperable system of service and device vendors in, for example, smart home services. In a pure cloud approach, media and content protection is left to the end points - whereas HGI is also investigating the advantages of media handling features in an evolved Home Gateway, called the Media Gateway (MG). The MG is an evolved HG that aggregates STB-like features, media and content protection translation, and integrated tuners or IPTV decoding. Humax: Even in a market where this has been solved, most operators will prefer to have their own CPE in a customer’s home in order to maintain a better access to their consumer. It is also reasonable to expect that the role of the STB manufacturer will have to change and that services and cloud-based infrastructure products will form part of the portfolio. Irdeto: Shifting to the cloud is definitely an 16 EUROMEDIA Market trade value $20bn Global STB shipments in 2013 remained relatively stable, despite competition from other devices such as Smart TVs and Digital Media Adaptors, according to the latest research - Global Set-Top-Box Market Update Report - from Futuresource Consulting. “In 2013, the STB market trade value totalled $20 billion with an ASP (average selling price) of $74 and prices ranging from less than $30 to more than $300,” advises Jack Wetherill, senior market analyst at Futuresource Consulting. Emerging markets accounted for around 70% of global demand in units, with the Asia Pacific market making up 44% of this global demand. Emerging markets’ value accounted for less than 60% as many of these countries have a relatively low price point for STBs. “HD STBs represented 53 per cent of worldwide shipments in 2013, and moving forward this will rise to over 95 per cent of worldwide shipments in 2018,” says Wetherill. “However, there is a great disparity between regions in the adoption of HD. HD STBs already account for 95 per cent of shipments in North America, whereas LatAm and MEA are at 28 per cent and 35 per cent respectively. Digital Video Recorders (DVR) comprised 16 per cent of total shipments in 2013 which equated to 40 per cent of value, and will peak in 2015. North America and Western Europe have a 69 per cent combined share of the global volumes.” MHG (Multimedia Home Gateway) totalled five million units in 2013 and growth will continue throughout the forecast period with North America accounting for the majority of volumes, driven by Whole Home DVR. HEVC chipsets will emerge in volume in 2015 and will grow to account for more than 60% of the global market by 2018, as the HEVC offers improved bandwidth efficiency to allow more HD channels. However, UHD (4K) services are expected to remain niche for several years due to lack of clear business model. Looking further ahead to 2018,the outlook is relatively stable, with growth in developing markets largely compensating for decline in North America and Western Europe.