Make Way for Gateways
Although they may still be relatively small in number, home media gateways are starting to make their presence felt in the pay TV market.
In two separate reports, analyst firms Multimedia Research Group (MRG) Inc. and Infonetics Research Inc. confirmed the growing industry interest in media gateways, which are centralized über boxes that can support multiple video and broadband services in the home. Both reports found that providers are seeking to deploy more gateways in response to consumer demand for more advanced video and home networking services, especially multi-screen video.
MRG, a unit of SNL Kagan , predicts that global shipments of home media gateway products will reach nearly 10 million units this year, up from 7.7 million units in 2012. As a result, it sees vendor revenues climbing to almost $3 billion this year, up from $2.3 billion last year.
Even so, MRG noted that gateway shipments will still account for just 4 percent of all set-top box shipments this year. However, the firm expects demand for the gateways to "increase significantly over the next few years."
With a hefty average sales price of about $300 per box, gateways should be a lucrative source of income for set-top makers. But that relatively steep price will also limit their penetration to high-income regions around the world, at least initially, MRG said. Specifically, the firm expects that "virtually all" gateway deployments "will be confined" to North America and Europe through 2015.
So far, "headed" gateways, which attach directly to TV sets, easily make up the lion's share of product shipments. MRG projected that "headless" gateways, which are more advanced boxes that don't hook up to TVs, will account for only 2 percent of all global gateway shipments in 2013. But many industry experts believe that headless gateways will overtake headed gateways down the line.
In its report, Infonetics projects that home networking devices, which it describes a bit more broadly as gateways and set-tops that integrate wireless and wired technologies to distribute video signals throughout the home, will generate substantially more revenue this year. The firm reported that global vendor revenue from home networking devices climbed to $5.4 billion in the first half of the year, up 6 percent from the second half of 2012. Devices using multimedia-over-coax (MoCA) technology, which ship primarily in North America, drove most of the growth.
Zeroing in on broadband data gateways, Infonetics found that residential gateway revenues rose 7 percent in the first half of the year on a sequential basis. The firm said such gateways, which combine the functions of modems and routers, "continue to cannibalize retail routers," depressing router shipments and revenues.
— Alan Breznick, Cable/Video Practice Leader, Light Reading