Set-top box market has large growth potential, but trouble awaits

There is a bright future for the set-top and home entertainment markets as growth is expected to pick up in the immediate future.

TiVo and several other companies that are not part of the traditional tech industry grabbed early control of the market that remained extremely closed off from mainstream TV viewers. Since the early days, there has been a continued transition towards enhanced content in the living room, as there have been even more companies jumping on the bandwagon.

“The PC people – tablet, notebook, desktop, server — continue to try to figure out how they are going to get into the living/family room. They’ve been trying to be the ‘content source’ for about 10 years now continually spinning the story that this is the year the home entertainment solution will really take its place in the family’s entertainment,” said Andy Marken, Marken Communications president, in a statement to MyCE. “It just hasn’t happened, except for a few very geeky people or individuals who live in studio apartments where the ‘computing’ and ‘entertainment’ stations share the same location in the room.”

TiVo, which was the set-top box king since the company’s public introduction more than 10 years ago, has been unable keep up with newer, better rivals.

“We think the set-top ‘champion’ has just about left the building. TiVo has shown little to no growth for a number of years now and there are solutions being made available — one-time payments and low-cost monthly fees that have more features, more capabilities and greater options. People say they TiVo a show but it has become a universal solution for grabbing content for later viewing not done with a TiVo box!”

Roku, Boxee, Apple, and others prepare for a long, difficult battle as even more competitors flood the market in hopes of cashing in. The Boxee Internet set-top box will launch this Nov., while Apple has a cheaper Apple TV product for $99.

Set-top box sales slid as much as 8% in 2010, according to recent research, but companies aren’t panicked and plan to take their time and keep releasing appealing products.

Meanwhile, Google, Intel, Yahoo, and other traditional PC-based companies will help spur new interest but could end up struggling in the long-run. Streaming services will have to adapt and adjust depending on consumer needs, while set-top boxes that cannot be remotely updated via firmware updates will greatly struggle.