2013/11/07 Home Media Gateways: Product Shipments Forecasted to Surpass 24 Million in 2017
By: Mike Paxton
The development of the home media gateway has been underway for a number of years. In fact, the idea that a “media gateway” set-top box product might eventually become the centerpiece in the pay-TV household has been floating around for at least the past decade.
Still, it wasn’t until 2011 that the first wave of home media gateways began to ship. These products, which now include products such as Comcast’s X1, The Hopper for DISH, and Liberty Global’s Horizon platform, are currently being deployed by pay-TV service providers in North America and Western Europe.
Home media gateway products integrate traditional set-top box functions, like support for conditional access and TV tuning, with enhanced connectivity capabilities. These enhanced capabilities include support for home networking and “over the top” (OTT) video.
Figure 1. DirecTV’s HR-44 Genie Home Media Gateway
Source: DirecTV
But what specifically turns a set-top box into a home media gateway? Here at MRG, we use a description of a home media gateway product that is common among most set-top box manufacturers. While the form factor of a home media gateway can vary, MRG believes the product must offer:
• Support for IP video transmission
• Support for watching video on multiple screens (also known as support for “TV Everywhere”)
• Support for a multi-room DVR environment
• Support for HD, and potentially 3D, video
• Support for applications that allow pay-TV subscribers to connect to social networking sites (Facebook, Twitter, etc.) or streaming media sites (Netflix, Pandora, etc.)
In addition, specific features that are integral to the home media gateway include an integrated hard disk drive, the ability to be networked (wired and/or wirelessly) to other set-top boxes or consumer electronics devices, and support for IP video through either an integrated modem or via Ethernet/Wi-Fi connectivity.
As might be expected, many of the world’s leading set-top box manufacturers are also home media gateway proponents. Leading home media gateway manufacturers include companies like ARRIS, Samsung, Pace, EchoStar, and Cisco Systems. Other manufacturers with notable product shipments are Humax, Free, Sagemcom, and TiVo.
MRG Analysis
MRG’s analysis of the home media gateway market highlights several key findings. These include:
• In 2013, global unit shipments of home media gateway products are on track to reach 9.7 million, a solid increase from the 7.7 million units that shipped in 2012. By 2017, we are forecasting worldwide home media gateway unit shipments to surpass 24 million.
Figure 2. The Rise of the Home Media Gateway: Worldwide Unit Shipment Forecast
Source: MRG, Inc.
• Revenues of home media gateway products are projected to reach $2.8 billion in 2013, up from $2.3 billion in 2012. By 2017, we are forecasting worldwide product revenues to surpass $5.8 billion.
• Home media gateway products have high average sales prices (ASPs), which make them attractive to set-top box manufacturers. Currently, ASPs for home media gateway products are around $300 per box, which generally limit the penetration of home media gateways to the high-income household regions of the world. Through 2015, we are projecting that virtually all home media gateway product deployments will be confined to North America and Europe.
• Headed gateways currently account for the lion’s share of home media gateway unit shipments. In 2013, only 2% of global unit shipments are projected to be “headless” home media gateways.
As noted earlier, unit shipments of home media gateway products are on track to grow rapidly. However, the product segment is currently just a small portion of the worldwide set-top box market. For example, in 2013 home media gateway product shipments are projected to account for just 4% of total set-top box unit shipments.
