By Matthew Henry

SYDNEY: Following a year in retreat, the HD set top box market may be showing its first signs of a rebirth.

After witnessing the set top box market’s value halved since February 2007, suppliers are now giving credit to the commercial TV networks, who are offering exclusive content on their HD channels, for a pick up in sales.

DGTEC business development manager, Tony Cormack, said the floundering HD segment has seen a revival since channels Seven and Ten launched their HD channels late last year, which offer consumers different programming from the main SD broadcasts.

“There’s definitely been a rebirth since those new channels have come on,” Cormack told this morning.

Recent GfK figures reveal how tough the market has been for set top box makers in the past 12 months.

In the year to February 2008, unit sales were down 24 per cent while total market value declined 49 per cent, compared with the same period a year before.

Sales of HD boxes were hit the hardest in 2007 due to the arrival of flat panel TVs with integrated HD tuners.

Around 98 per cent of LCDs and 89 per cent of plasmas TVs had integrated HD tuners, according to Sony’s HD Benchmark report for the fourth quarter, giving consumers little need for an HD box.

By the end of last year, HD set top box sales had sunk to the lowest point in nearly three years.

Westwell marketing manager, Rob Baker, whose company distributes Olin set top boxes through retailers including JB Hi-Fi and Harvey Norman, was also upbeat, and said business in the category is healthy.

“In our case, we have increased production to meet the demand,” said Baker.

Tim O’Keefe, who represents set top box and TV manufacturers to the federal government as a spokesperson for the Australian Digital Suppliers Industry Forum (ADSIF), believes the switch from analogue to digital TV will also help return the market to a growth phase.

“What we will see is that the set top box market, which as Sony said in their paper peaked in the middle of 2006, will start to build again with digital switchover approaching,” he said.

The new federal communications minister, Stephen Conroy, has set a goal to complete digital switchover by 2013, which would require every TV in Australian homes to be matched up with a set top box.

“We’ve got a huge market opportunity there if we get it right as suppliers,” added O’Keefe.