Evolution of the Set-Top Box
The turn away from the STB market has been clearly signaled via recent actions by heavyweights Cisco and Google. First, Cisco made headlines by spending $5 billion to acquire video software enabler NDS, reigniting rumors that Cisco plans to sell its set-top box unit Scientific Atlanta. Soon thereafter, Google was reportedly shopping Motorola's set-top box division.
Cisco CEO and Chairman John Chambers said the decision to purchase NDS is about, “enabling content and service providers to deliver new video solutions that leverage the cloud and drive new monetization opportunities and service differentiation." He was more blunt when questioned by the Atlanta Journal-Constitution. “This isn’t [about] set-top boxes. It’s how you bring video into the home, into wherever,” Chambers was quoted as saying. “This is right now our sweet spot for where we want to go.”
During a webcast on Mar. 15, Chambers went on to explain his vision for the future of video. “Video will be the new voice. It will be pervasive, on any device, anytime.”
Dr. Abe Peled, executive chairman, NDS, also commented on the evolving nature of video and the impact of the acquisition, saying the companies “are uniquely positioned to enable service providers to deliver fresh and exciting multi-screen video services to their customers.”“The total value of the three markets at stake--the pay-TV STB industry, the pay-TV software and security industry and the pay-TV network infrastructure industry--are sizable. Respectively, they equate to about $13 billion, $4 billion and $10 billion,” wrote said Tom Morrod, senior principal analyst of TV technology for IHS in a recent report.
"While STBs will continue to represent a large market for U.S. cable companies, over the long term, multi-screen device access increasingly will become the core metric that determines the scale of operators' coverage," he continued.
If the future is multi-screen, where does that leave the set-top box?
The Multi-Screen Advantage
"To cash in on this trend, operators need digital rights management technology and a compelling user interface that can be ported across multiple devices,” said Tom Morrod. “The U.S. cable equipment market has been rife with news and rumors of corporate acquisitions and sales--all of which point to a shift in emphasis away from STB hardware and toward multi-screen software and services."
Consumers certainly prefer viewing video content wherever, whenever, and on whatever device they choose. It doesn't make sense to manage two separate standards in order to deliver this content. End-users also want to be able to access all their video subscriptions from a single location. To this end, all-IP set-top-boxes are a stop-gap eventuality, and they already exist from numerous third-parties like Roku, Google, Apple, and even Wal-Mart.
However, the core components of a home media gateway--user authentication, rights management, and interface--can all be software-based and ported to any number of devices. In this manner, it could even be argued that home media gateways in the form of app-enabled tablets, connected televisions, and Bluetooth players are an evolved form of the set-top box. Perhaps an unlikely device category that may be well poised to replace the set-top box altogether.
