Russia - 2012-10-19 - STB - MW - EN

Below are the findings of a study by J'son & Partners Consulting of Russia's 2011 set top box
(STB) market and outlook until 2016.
Russia's STB market saturation and growth outlook

The growing popularity and availability of digital TV services in the world as a whole and in Russia in
particular has not only improved the quality and diversity of TV content but also contributed to a steady
demand for digital TV equipment:
modern TVs with built-in turners capable of receiving and decoding a digital TV signal delivered via any
of the following: satellite, cable or terrestrial broadcast;
TV receivers (STB, digital TV receiver) external signal-decoding devices that are connected to a TV
(not necessarily to a new one) via standard connectors (RCA, SCART or HDMI).
STB sales in Russia and the w orld continue to grow at a healthy pace, driven largely by
the grow ing popularity of digital TV services: satellite (DVB-S, DVB-S2 standards),
cable (DVB-C, DVB-C2), terrestrial (DVB-T, DVB-T2) and IPTV.
The biggest difference betw een the new and old standards (DVB-S and DVB-S2, DVB-C
and DVB-C2, DVB-T and DVB-T2) lies in a m ore efficient bandw idth use that results in a
greater variety of channels per single frequency or better im age quality of existing
ones.
Digital television is also driving the sales of large screen TVs. Thanks to digital
technology, consum ers can now adays w atch high quality digital content on a TV screen
of any size w ithout ex periencing any deterioration in quality that w as characteristic of
analogue devices. The constant evolution of digital technology is certain to stim ulate
the dem and for even new er technologies: HD, 3D and 4K .
STBs offer users a greater control over TV viewing than a conventional TV. Among the most notable
advantages are: an access to video-on-demand services, availability of an internal storage unit for your
Copyright 2012, J'son & Partners Consulting. Copying or distribution in print or electronic forms without written permission of J'son & Partners is prohibited. The
media may use any graphics, data or forecasts contained in this market review only with reference to the source of information - J'son & Partners Consulting.
J'son & Partners [registered trademark].
favorite TV shows and movies, an option for downloading web content, and an access to various
auxiliary services. Additionally, STBs are considerably cheaper than TV sets, and they can be used to
provide quality digital content to users who don't own modern TV sets with built-in digital tuners.
As part of a strategy aimed at attracting new customers or increasing profit margins, broadband internet
and digital TV providers offer their new customers proprietary equipment. Among the most popular STB
distribution schemes used by international operators are:
European operators typically don't charge their customers for the basic equipment needed to
access the Internet (customers can also rent or buy additional equipment not included in the
basic service package from their operator);
all major UK fixed-line operators provide network equipment to their customers free of charge;
U.S. providers tend to provide network equipment to customers for an additional fee (e.g.
provider CenturyLink sells its equipment, only offering free installation and configuration
services);
France's SFR provides all necessary equipment to its customers for free but only for the duration
of the service contract;
telecommunications company KDDI Corporation (Japan) leases STBs (ST1100R) to its digital
subscribers, charging 525 yen per month for the entire duration of the contract.
A survey of Russia's TV owners and pay terrestrial TV users conducted by J `son & Partners in August
2012 (1450 respondents mainly from regions where it's technically possible to receive DTTV broadcasts),
revealed the following findings:
1)
7% of the population prefer to watch TV programs on a computer;
2)
less than 1% of the population do not have a TV in their household, considering them irrelevant to
everyday life;
3)
more than half of the population feel the need to buy a new TV (either in addition to the existing one
due to the growing demand for TV viewing, or to replace the old one);
4)
22% of the population would like to buy a new TV with a built-in digital tuner soon;
5)
18% of respondents are willing to buy their own STB to be able to receive free digital terrestrial
television channels.
Fig. 1 represents respondents' replies to the question "Is there any specialized equipment (TV
receiver/media player) or a TV in your household capable of receiving digital channels?"
Fig. 1. "Is there any specialized equipment (TV receiver/media player) or a TV

set capable of receiving digital channels in your household?"
No,
I'm not interested
5.7%
Yes,
an STB
which I bought myself
Yes,
4.4%
an STB provided
by my pay TV operator
9.0%
No,
but I'd like to buy
an STB for my TV
17.8%
No,
but I'd like to buy a TV
with a built-in
digital receiver
22.1%
Yes,
a TV with
a built-in digital receiver
41.0%
Source: Json & Partners Consulting
Current state of Russia's STB market

Fig. 2. Russia's STB market dynamics, mln, units, 2010-2012F
Pessimistic
Moderate
Optimistic
Source: Json & Partners Consulting, operator and STB manufacturer data
Russia's STB market has resumed growth after recovering from the crisis year 2009, with the 2010 sales
figures back to the pre-crisis level of 3.45 mln units sold. In 2011, this figure was already 3.95 mln
units. We expect to see the number of STBs sold in Russia in 2012 to reach 5.15 units.
Satellite STB
Satellite operators are expected to retain their status of STB manufacturers' main customers. After a
short-term decline of the post-crisis year of 2009, sales picked up in 2010-2011 and are expected to
remain buoyant also in 2012. Russian company General Satellite main supplier of digital receivers to
operator Tricolor-TV is the largest manufacturer of STB equipment for satellite operators.
IPTV STB
The fast growth enjoyed by the IPTV market means that it's currently the second-largest STB segment
behind only satellite, with the gap between the two becoming ever narrower: only 50% fewer digital
receivers for IPTV than for satellite TV are expected to be sold in 2012. This gap in 2011 was 400% and
in 2010, 500%. SmartLabs (INLINE Technologies Group) is the largest manufacturer of STBs for IPTV
and the main supplier of digital receivers to subscribers of operator Rostelecom.
Digital terrestrial STB (DVB-T, DVB-T2)
The market of digital terrestrial receivers DVB-T and DVB-T2 is the third-largest STB segment. In 20102011, sales of IPTV and digital terrestrial STBs were very similar, but the gap is expected to increase
considerably in 2012 as the rate of annual growth in this segment is likely to reach 16%. However, this
segment has a potential to generate up to 1 mln in unit sales in 2013, provided we see more multiplex
launches and a better product line-up. Among the largest producers of digital terrestrial STBs are
Russian companies Stavropol radio manufacturing plant Signal, Radiozavod JSC (Penza), Promsvyaz
plant (Ufa) and General Satellite (Kaliningrad region). In 2012 foreign brands increased their share of
Russia's market at the expense of domestic manufacturers.
Cable STB
Digital cable receivers currently represent the smallest segment of the STB market, with little changes
expected in the short term. In the long term, the majority of the growth in this sector will be associated
with a transfer by cable operators of their subscriber base from analog to digital reception. Just as in the
market of digital terrestrial STBs, the market shares held by the main manufacturers here are roughly
equal.
Russia's STB market of terrestrial TV (DVB-T2) outlook until 2016
A transition of DTTV to a new standard (DVB-T2), which began in early 2012, meant that all equipment
manufacturers were under pressure to develop models compatible with the new standard. This was
happening against the background of increasing foreign competition.
As competition in the digital terrestrial STB segment continues to heat up and manufacturers focus more
efforts on adding more models to their product slate, the importance of the low-cost segment
receivers costing under 1500 rubles continues to grow. According to a survey conducted by Json &
Partners Consulting, this price range suites 68% of respondents, with less than 12% viewing the 3000
ruble mark as reasonable.
The second half of 2012 is expected to herald the market arrival of a large number of DVB-T2compatible receivers, with a similar development affecting DVB-T2-compatible TVs slated to take place
in 2012-2013. Both events are likely to have a significant impact on the STB market.
Fig. 1. Russia's digital terrestrial STB market outlook 2016, mln units
Pessimistic
Moderate
Optimistic
Source: Json & Partners Consulting
Under a pessimistic scenario, the total sales of digital STB equipment in Russia will reach 3.70
mln units in 2012-2016 (3.55 mln of which will be DVB-T2).
Under a moderate scenario, the total sales of digital STB equipment in Russia will reach 5.40 mln
units in 2012-2016 (5.25 mln of which will be DVB-T2).
Under an optimistic scenario, the total sales of digital STB equipment in Russia will reach 6.35
mln units in 2012-2016 (6.20 mln of which will be DVB-T2).
______________________________________________________________________________________________________
This information bulletin has been prepared by J'son & Partners Consulting Co. We make every effort to ensure that information
and forests contained in our market reviews are accurate and up-to-date. J'son & Partners Consulting reserves the right to
revise the data following the publication of new official information by certain market players.
FOR MORE INFORMATION PLEASE CONTACT:
Pavel Ermolich
Commercial Director
Pavel@json.ru
www.json.r
u
The study full findings can be found in a report titled "Russia's STB m arket,
2010-2016", whose table of contents is given below.
1. Introduction
2. Russia's set top box market review
2.1. Russia's STB market by digital TV content distribution system:
Cable,
Satellite,
Terrestrial (DVB-T, DVB-T2),
IP TV.
2.2. Russia's STB market structure, 2010-2011
STB manufacturer market share
STB equipment by country of manufacture
2.3. Russia's STB market of terrestrial TV (DVB-T2) outlook 2012-2013.
Optimistic outlook (review of positive and negative factors)
Pessimistic outlook (review of positive and negative factors)
3. Review of Russia's STB manufacturers
3.1. Overview of domestic STB manufacturers
Factors examined:
2011 output volume
Models and pricing
Market share
Sales geography
Place of manufacture
3.2. Overview of foreign STB manufacturers supplying their products to Russia's market
Factors examined:
2010-2011 output volume
Models and pricing
Market share
Sales geography
Place of manufacture
4. Review of consumer characteristics and qualities of STB manufacturers' key products on
the Russian market
4.1. Key parameters overview:
Support for multimedia technologies (DVB-T2, HbbTV, HDMI, etc.)
Support for targeted management system technologies
Support for the civil defense and emergency warning system

Access to E-government services
4.2. Optimal set of features supported by a modern DVB-T2-compatible STB.
Price/functionality ratio
5. STB current and prospective user demographics: gender and age structure, financial
standing and region of residence:
5.1 STB current users:
Independent buyers
Operator-sponsored STBs
5.2 STB prospective users:
Interested in purchasing the equipment (including pricing categories)
Not interested in purchasing the equipment
6. Operator-sponsored broadband access and digital TV equipment (international
experience): company info, equipment provision terms and special offers:
6.1 U.S.
AT&T
CenturyLink
Verizon Wireless
DISH Network
6.2 UK
British Telecom
Virgin Media
TalkTalk
6.3 Germany
Alice-dsl
Kabel Deutschland
6.4 France
SFR
6.5 Japan
Nippon Telegraph and Telephone (NTT)
KDDI
6.6 Korea
Olehh (Korea Telecom)
7. Conclusion
List of figures:
Figure 1. STB sales, 2010-2011
Figure 2. STB market dynamics, 2010-2012F
Figure 3. STB place of manufacture, 2010-2011
Figure 4. STB manufacturers - share of sales %, 2010
Figure 5. STB manufacturers - share of sales %, 2011
Figure 6. Digital terrestrial STB market dynamics, 2010-2012F
Figure 7. DVB-T-compatible STB sales 2010, ths units
Figure 8. DVB-T-compatible STB sales 2011, ths units
Figure 9. STB consumer base structure: current/prospective user ratio, August 2012
Figure 10. STB current consumer base structure: independent buyers/provider-sponsored
equipment users, August 2012
Figure 11. Independent STB buyer distribution by gender, August 2012
Figure 12. Independent STB buyer distribution by age, August 2012
Figure 13. Independent STB buyer distribution by cars per household, August 2012
Figure 14. Independent STB buyer distribution by region, August 2012
Figure 15. Provider-sponsored STB user distribution by gender, August 2012
Figure 16. Provider-sponsored STB user distribution by age, August 2012
Figure 17. Provider-sponsored STB user distribution by cars per household, August 2012
Figure 18. Provider-sponsored STB user distribution by region, August 2012
Figure 19. STB prospective user base structure: interested/not interested in purchasing equipment
consumer ratio, August 2012
Figure 20. Gender-based distribution of prospective STB users interested in buying equipment,
August 2012
Figure 21. Age-based distribution of prospective STB users interested in buying equipment, August
2012
Figure 22. Distribution of prospective STB users interested in buying equipment broken down by
cars per household, August 2012
Figure 23. Region-based distribution of prospective STB users interested in buying equipment
August 2012
Figure 24. Gender-based distribution of prospective STB users not interested in buying equipment,
August 2012
Figure 25. Age-based distribution of prospective STB users not interested in buying equipment,
August 2012
Figure 26. Distribution of prospective STB users not interested in buying equipment broken down by
cars per household, August 2012
Figure 27. Region-based distribution of prospective STB users not interested in buying equipment,
August 2012
List of tables:
Overview of domestic STB manufacturers;

Table 1. STB manufacturer 1 key features and characteristics
Table 2. STB manufacturer 2 key features and characteristics
Table
Table
Table
Table
Table
Table
Table
3.
3.
5.
6.
7.
8.
9.
STB
STB
STB
STB
STB
STB
STB
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
3
4
5
6
7
8
9
key
key
key
key
key
key
key
features
features
features
features
features
features
features
and
and
and
and
and
and
and
characteristics
characteristics
characteristics
characteristics
characteristics
characteristics
characteristics
Overview of foreign STB manufacturers supplying their products to Russia's market

Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
STB
STB
STB
STB
STB
STB
STB
STB
STB
STB
STB
STB
STB
STB
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
manufacturer
1 key features and characteristics


Russia - 2012-10-19 - STB - MW - EN

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Below are the findings of a study by J'son & Partners Consulting of Russia's 2011 set top box

(STB) market and outlook until 2016.

Russia's STB market saturation and growth outlook

7% of the population prefer to watch TV programs on a computer;

Fig. 1. "Is there any specialized equipment (TV receiver/media player) or a TV

Source: Json & Partners Consulting

Current state of Russia's STB market

Digital terrestrial STB (DVB-T, DVB-T2)

Source: Json & Partners Consulting

FOR MORE INFORMATION PLEASE CONTACT:

Support for targeted management system technologies

Support for the civil defense and emergency warning system

Overview of domestic STB manufacturers;

Overview of foreign STB manufacturers supplying their products to Russia's market

1 key features and characteristics

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