Conditional Access market to decline as pay TV reaches saturation

The global market for conditional access (CA) technology used in set-top boxes is set to peak in 2015 then decline as pay TV services reach saturation, according to IHS Technology. 

The research firm predicts that the CA market will expand in 2014 and 2015, driven by Chinese and Indian cable TV digitisation and “further pay TV growth in emerging markets.”

By 2015, IHS predicts that the CA market will climb to US$2.2 billion (€1.6 billion) – up from US$2.1 billion in 2013 – with set-top CA client shipments to reach 279 million units in 2015.

However, worldwide revenue for pay TV CA technology is then tipped to decline to US$1.9 billion in 2018, with a high level of pay TV penetration limiting further growth opportunities for conditional access systems.

“The CA market is largely dependent on pay TV growth. Shipments of STB CA clients have grown strongly during the past 10 years from 44 million units in 2003 to 246 million in 2013, driven by a decade of rampant pay TV growth. However, this dependence will make further growth for CA challenging as the pay-TV market begins to slow,” said Wajahat Abbassi, senior analyst for connected home at IHS.

The research firm predicts that 53% of TV-owning households worldwide will subscribe to pay TV services by the end of 2015

In terms of the CA market, Cisco Systems lead with a 32% market share of total revenue in 2013. Kudelski Group’s Nagravision was the second largest with 27% share.

Nagravision’s 2014 acquisition of Telenor’s conditional access subsidiary, Conax, will see the top two players control nearly 65% of the market, at 2013 values, according to IHS.