Set-top boxes are the zombies of the cable industry: they should theoretically be dead, but they keep coming back to life.
And in recent years they seem to be getting a new soul. The venerable device continues to evolve with more and better features that push content to a plethora of home network - connected devices.
Today’s set-top, said Kevin Keefe, senior vice president and general manager of cable consumer premises equipment for Arris, is “viewed as part of the home network supporting the services they’re trying to get to. I think operators today are doing a much better job incorporating other services and over-the-top content so that users don’t have to go to another box in the home to support their over-the-top needs.”
Not all operators are providing an OTT opportunity for their subscribers. Companies such as Comcast have enough homegrown content to discourage subscribers who want to hook up a Roku box, an Apple TV or Chromecast adapter. The MSO has rolled out its cloud DVR and live in-home streaming X1 service in more than 80% of its markets, with the goal of being fully rolled out by the end of this year. The service has already launched in markets such as Boston; Philadelphia; Washington, D.C.; Atlanta; Chicago; San Francisco; Houston; and Denver.
GATEWAY FOR SMALL OP SUCCESS
That’s a workable plan for a cable provider with tentacles that reach across broadcast TV, cable networks and motion pictures, all of which can be fed by a broadband network that will soon include DOCSIS 3.1.
Smaller operators don’t play in the same sandbox. They’re using an integrated set-top to avoid higher programming costs and still give their subscribers the content they want via OTT. To provide Netflix content, for instance, smaller operators incorporate the gateway within the set-top to make it easy to find.
“The smaller guys are in a less advantageous competitive position than the bigger guys are,” Tom Elam, vice president and general manager of TiVo’s service provider business, said. “They have to take a little bit more risk … embracing things like OTT. A mid-tier operator needs to embrace Netflix because viewing is migrating there.”
Rather than driving subscribers to a second box, which is attached to a second HDMI (high-definition multimedia interface) connection and includes a second remote control, TiVo, which is deemphasizing its own hardware in its MSO distribution deals, suggests an integrated box that, of course, uses TiVo as the foundation but gives overall operator control of the environment.
“You’re really getting into the core question of who’s really controlling the navigation experience,” Elam said. “It’s one of the most interesting places of competition within the whole ecosystem.”
TiVo, he added, offers the tools to “help the operator continue to be the foundation of the video experience.”
That means at least one “gateway” device per home with as many clients as needed to feed an ever-expanding universe of connected devices.
ActiveVideo, which promotes an out-of-home experience with an in-home termination point, has a philosophy that keeps the set-top in play but virtualizes “the part of the set-top box that applications need to use because they change frequently and set-top boxes don’t,” said Jeff Miller, president and CEO of Active-Video, which is now owned by a joint venture of Arris and Charter Communications. ActiveVideo’s technology is also playing a key role in Charter’s new cloud-based Spectrum Guide for set-tops and other devices.
Hardware is, and always has been, the point of demarcation separating set-top boxes from set-top wannabes such as smart TVs, which have limited upgradability.
Set-top boxes equipped with the right software can theoretically handle whatever content providers throw their way. ActiveVideo’s pitch to cable companies is to put as much functionality in the cloud as possible while keeping a small set-top as part of the home environment.
“Our thin-client approach literally moves the browser into the virtualized cloud, and then the box can be lighter,” Miller said. “The box is still driving a very high performance processor, and the browser goes into the cloud.”
Thus, when software engineers develop new applications and features, they can be handled off-site rather than in a fat box and be delivered to millions of legacy set-tops.
“ActiveVideo has built a business saying it can push the highly evolved, very cool bells-and-whistles UI [user interface] and deliver that from a cloud, and do it with the old set-top box with a small percentage of the processing power that you need,” Aditya Kishore, principal analyst for Diametric Analysis, said.
It’s not a bad model because operators have quite an investment in those legacy devices, he conceded. On the other hand, “there is more of a trend toward creating bigger boxes with a little more juice in them,” he added.
BALANCING LEGACY, PROGRESS
Cable operators essentially must straddle a thin line between preserving their in-the-field investment or tossing those boxes and moving on with the latest and greatest set-tops and gateways on the market today.
The alternative might be to abandon the set-top altogether and deploy what could be described as a “set-side”: an HDMI stick plugged into the TV that serves as a virtual set-top box, said John Carlucci, chief technology officer of Alticast, which has demonstrated a gateway device that can take incoming video, transcode it and deliver it across the home network to many different connected devices.
“In that case, you could argue you have a complete home with a set-top box hooked up to the TV,” Carlucci said.
There are two hiccups with that scenario. First, it doesn’t really eliminate the set-top, it just moves it offsite; and second, it uses WiFi, which is not the most reliable way to transport video.
The HDMI stick concept, said Arris’s Keefe, should be approached with caution.
“The capability of what I can put into an HDMI stick is pretty limited, and the power capability of those devices is limited,” he said. “While we believe in shrinking down the size of the set-top and the client devices, to me that’s not necessarily the form factor.”
The set-top, nearly everyone agreed, needs to remain in place — even if it’s no longer sitting atop today’s thin HDTVs.
Perhaps the best template for set-top makers to follow is the cell phone model. Today’s cell phone bears little resemblance to the device consumers used five years ago, just as today’s set-top is nothing like the ancient DCT-2000 that Motorola rolled out in the millions a decade ago. (Arris acquired Motorola Home and its set-top business in April 2013.)
“It is a very different device today … and the pace of change is accelerating and the technology changes in the set-top are moving very quickly,” Keefe said.
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