Satellite Operators Will Drive High Growth Rates for the Hybrid Set-Top Box

ABI: The recent temporary suspension of BSkyB's broadband movie download service, due to the release of a utility that circumvented digital rights management in Windows Media files, has focused attention on a new phenomenon: satellite operators have found a way to offer video-on-demand in competition with cable and telecom operators.

The solution requires the use of hybrid set-top boxes at customers' premises: boxes that combine IP video with DBS. Other HSTBs combine IP video with cable, or with digital terrestrial television. Annual shipments of such hybrid STBs will grow to more than 50 million worldwide by 2011 with western Europe accounting for the largest share. Because they don't offer 'triple-play' services satellite operators are especially interested in hybrid STB technology. The BSkyB service is the first large-scale deployment of this kind by a satellite operator. A DSL line is used as the IP back channel for the on-demand service. A combination of satellite and DSL feeds is received on the hybrid STB at the consumer's premises. Viewers get their regular channels from satellite, but when they order a movie on demand, it arrives via the DSL network's broadband line. What will satellite operators' enthusiasm for this model mean for markets? This year, about 20% of all HSTBs shipped will be for satellite services. The remainder will incorporate cable or DTT technology with IP. But over time, that ratio will change. DBS Video HSTB shipments in 2011 will be ten times greater than they are today, and will account for a solid majority of all hybrid STBs. worldwide Hybrid Set-Top Box Markets Publ 20060919