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This report discusses the market for applications on service provider set-top boxes—this is treated as a subset of the greater interactive TV market. Applications (or widgets), are starting to play a larger role in operator strategies as these companies seek to better compete with the growing OTT market. In 2013 ABI Research estimated pay TV households with set-top boxes that supported applications passed 100 million—11% of all pay TV households and 5% of total households.
While operator-based applications trace its roots to interactive ads, teletext, and other interactive features, the continued shift to IP is pushing the cloud and HTML5 to the forefront. Application platforms more commonly associated with connected CE devices are also starting to play a larger role in the operator market. Social networking, gaming, music, and other forms of entertainment will remain critical to the application libraries; video will remain the focus. Time sensitive and seasonal apps like weather services and holidays/Olympics also generate a great deal of interest –news and information services are also common.
The importance of video brings heighted attention to OTT video services that in many cases are not as fully supported on operator platforms as connected CE devices. Ultimately operators will have to find the proper balance between in-house services and consumers growing penchant (and availability) of OTT.
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