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Patk0317
I see this as an intermediate step. Soon enough it will all be WiFi.
Neo1
Yep, that day is still far away when you can choose your program like you choose ...
How set-tops got stuck in a TV transition
Rick Merritt
9/3/2010 9:52 AM EDT
SAN JOSE, Calif. – When Steve Jobs held aloft his new $99 AppleTV box this week, most people applauded it as a dirt cheap deal. But Ira Bahr got excited because he thought it was relatively expensive.
"Apple gives me hope someone will actually pay $99 for a set-top box," said the chief marketing officer for Dish Network who has been locked in a price war with other satellite, cable and telco TV providers.
Indeed, the set-top box has become the Rodney Dangerfield of the consumer electronics industry. "I have customers calling in that want a digital video recorder or an upgrade to high definition but are outraged if they have to pay for a set top," said Bahr in a keynote address to about 200 people at Set-Top Box 2010 in San Jose.
"Today we are no more interesting [to consumers] than an electric or gas company—it's just not exciting anymore," said Bahr, noting Comcast now gives away Apple iPods to entice new users to take its service and set-top.
Service providers like Dish are doing all they can to add pizzazz to their little black pizza boxes.
Dish is a partner in the GoogleTV initiative, aiming to deliver an Intel Atom-based set-top this fall that plugs users into a new service more closely linked to the Web and Web-like search. And Dish's set-top maker Echostar acquired Sling Media to provide video to PCs and handsets as well as TVs—the three-screen nirvana the industry is now seeking.
Sounds like all the right moves. But the trouble is the days of cable and satellite TV networks are numbered. Something new is slowly being born.
David Grubb, chief technology officer for Motorola Home was right to dub this the Internet era in his conference keynote. Television will become one application for TVs that increasingly will be multifunction devices, he said.
This shift is bound to happen, but today's cable, satellite and telco TV providers and their vendors cannot truly embrace it. They are locked into Clayton Christensen's dilemma of trying to serve their existing networks and customers.
Plenty of so-called over-the-top boxes have emerged in the last few years trying to ride the new paradigm, but they have lacked clout and content. Roku's Anthony Wood claims he invented the field two years ago with his $99 Netflix player that now comes in a standard definition version for as little as $59.
These so-called buddy boxes are stuck in secondary roles as long as the majority of premium content is still locked into release windows on broadcast TV. Even Steve Jobs with all his Hollywood clout from Pixar had to content himself with an AppleTV box that would deliver only some select programs from a handful of content owners the day after their broadcast release.
The fact is today's cable, satellite and telco TV networks still own the mainstream pipes to the consumer. Someday Joe Six-Pack will only need a good broadband connection and a TV-centric browser—likely with some new kind of remote control and search engine—to access any new or archived video you might imagine.
But 2010 sits in an awkward spot when the old networks still have plenty of life and the new Internet set-tops still have plenty of problems.
Many have tried and failed to make Web pages optimized for 640x480 pixel screens look good on a 1080-processive flat-panel TV. Junk drawers are full of novel keyboards and remotes for easily navigating the Net from the couch. And no one has yet delivered the browser-centric program guide for the Web TV era
For its part, Hollywood is still clutching its content libraries and release windows in fear of a free-Internet future. It's high time Hollywood and set-top box makers stop flirting and get married. The Internet TV era is theirs for the taking if they can let go of their old attachments to yesterday's cable and satellite networks.
I suspect Apple has not delivered an iTV, in part because these technical and business problems are so difficult. It also has its hands full with other quite successful businesses.
There's lots of work to be done enabling Web-a-vision. This transition could take a decade. So for awhile, the old set-top is stuck with its sad sack status of being the box that doesn't get any respect.
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Rick Merritt
9/3/2010 10:16 AM EDT
How can we inject new life into the set-top box?
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dspSurfGuy
9/3/2010 11:02 AM EDT
Set-top box with wifi reciever! That way you can watch internet programs on you TV too. I believe its not long before we see this functionality as a standard feature for STBs.
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Patk0317
9/8/2010 3:37 PM EDT
I see this as an intermediate step. Soon enough it will all be WiFi.
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Mark Wehrmeister
9/3/2010 1:22 PM EDT
Dish Network and cable providers have trouble charging for set-top boxes primarily because they charge such high monthly fixed fees for their service. They need to (and do) operate more in the model of giving away the device to collect the subscription fees, much like the mobile phone industry. Apple can charge a fee for their box primarily because the consumer only pays for the content they watch. If cable companies change their model to only charge for what I watch I would be happy to pay for their set-top boxes.
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junko.yoshida
9/3/2010 2:38 PM EDT
Mark, I think you hit the nail on its head.
What's happening here is almost like a revolt by consumers. Yesterday, I talked to someone working in the CE space, who told me that he no longer subscribes to cables or satellite. He can watch pretty much whatever he wants to watch on the Internet -- he simply connects his notebook computer with his flat panel TV.
It's the ala carte model consumers want. If that's possible, people will be willing to pay for hardware.
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kinnar
9/6/2010 10:58 AM EDT
The comment is true but at the present price being offered by Apple, will attrect thousands of Consumers.
As Apple is not a company like Google, to offer the Best but Cost effective services to consumers.
Apple is a brand that costs high and there are apple lovers who will spend, and apple does not know the power of consumers that google knows.
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CamilleK
9/3/2010 3:31 PM EDT
I agree with Mark that the fees cable/satellite providers charge are unreasonable, specially when the content is poor, the service is so-so, the DVR boxes have no GUI to speak of(compared to say TiVo) and internet access comes with needless constraining of speed. Many countries have far superior access and pricing rates. In addition the internet allows good independent creative content to be pushed without having TV Hollywood programmers decide what you get to see. The set-top of the future is looking more and more like AppleTV or TiVo or Boxee or Sling Media. So welcome the Pointcast Media that will take a seat next to Mass Media and I look forward to the days of wide choices, fat pipes and slim costs.
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LarryM99
9/3/2010 4:05 PM EDT
The problem with DVR boxes is that they are built to restrict access, not to enable it. It is only very recently that they have added whole-house functionality and search capability, something that my Windows Media Center box has done for years. The DVR is a box that is under the complete control of the cable company, so why should I pay for it?
CableCARD was supposed to break this monopoly, but the cablecos dragged their feet on it and forced so many restrictions that it was unusable. The interest generated by the recently-released Ceton InfiniTV card is an indication of the frustration of technically-capable users with this situation.
Larry M.
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Rick Merritt
9/3/2010 6:52 PM EDT
People loved their Tivo boxes because it provided the first experience of a DVR. How can we create another set-top that has that kind of user pizzazz?
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CamilleK
9/4/2010 12:40 AM EDT
@Rick: The new set-top needs to have support for multiple video feeds and streams (cable, satellite, web, DVR, DVD/Blu Ray, camera,mobile devices, locally stored media) and it needs to allow easy management of those feeds in multiple screens with a touch-based turbo universal remote that has quick context switch and it needs to inter-operate with sound systems (it is a challenge to coordinate the various HDMI settings that keep overriding each other if you happen to have TVs and Blu Rays from separate manufacturers). Wireless HD video streaming would be ideal. I am looking forward to seeing what Dish/Google TV come out with. I am wondering though if the Atom can foot the bill in terms of needed performance.
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VincePG
9/4/2010 3:17 AM EDT
I can't believe this discussion. People lamenting about STBs. The whole point was to get rid of STBs not find ways to preserve them. Of course DISH complains about no one wanting to pay for STB. It is their biggest operational expense and the source of truck rolls. Of course I'm not going to pay for a STB. The software is poor. They break and if I pay I'm locked into the service provider. Why should I pay to enable DISH or anyone else to charge me a monthly fee and create a barrier to drop them when they act unreasonably? Comcast I'm talking about you. By the way, Cable Card 2.0 works great. It’s unfair to paint them with the same brush as CableCard 1.0, which really was bad. But again, why should I pay more for an entertainment appliance to enable the cable guys to delivery me service, when I get a STB for free? The author of this article must have got a month’s free service from Dish or something to write this. It's really makes no sense to sympathize with DISH or any of the service providers on STBs. You don’t hear the cell phone guys complaining about giving away free phones. What a bunch of whiners.
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VincePG
9/4/2010 3:33 AM EDT
One more thing. If Dish wanted to get rid of STBs all they have to do is release their security system to the consumer electronic manufacturers. They don't want to do that because a breech in their security will cost them way more than STBs. Look what happened to DirectTV when hackers figured out how to break their security. It cost them 10s of millions to recover and close the whole. Crocodile tears from Dish CEO. Boo Hoo for Dish.
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Kiran_NSN
9/5/2010 11:12 AM EDT
@Vince - I agree with your opinion, I don't believe this article concludes saying that consumers just have to stuck to their STB's which can not deliver the service or the content that user like to choose. All the communication and entertainment services should be integrated and delivered over a single connection to the consumers. May not be all the dish companies really like such a transition but i feel there is lot of innovation left in this area.
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Warren
9/5/2010 11:20 AM EDT
I've enjoyed the article and the comments... so I'd like to seek some clarification.
1) The article: there is News and Analysis and then there is opinion. Don't folks think the article went pretty deep into the opinion side of the pool? Examples: "set-top box has become the Rodney Dangerfield of the consumer electronics industry", "Hollywood is still clutching its content libraries and release windows in fear of a free-Internet future", "But the trouble is the days of cable and satellite TV networks are numbered".
2) I love how Apple and Steve Jobs is slid in as the poor soul who has to be subject to the whims of the cable and satellite providers. I can't help but feel that if folks fell in love with an Apple STB and its Apple STB App Store that we'd be trading one master/controller for another. Am I likely way off the mark here?
3) Does an Apple STB (as one example) arrive as the Knight in Shining Armor to restore luster to the Cable front end... and be the cable/internet mixer? Is the cable provider then beholden to the STB provider?
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chanj
9/5/2010 10:23 PM EDT
There are a lot reasons that STB is difficult to get rid of. One of the reasons is to deliver new content to your home TV without making any hardware or software changes on your TV. For DISH network or Comcast, they encrypt the content and they are not going to openly let a lot of people know how they do it. STB becomes inevitable. If we indeed want to totally get rid of STB, maybe, Android powered TV will be the solution. The STB will just become an app to run on the TV instead. What do you say?
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Dave.Dykstra
9/5/2010 11:31 PM EDT
The STB being an app to run on the TV is appealing, and that is essentially the idea behind the CableCard (whether 1.0 or 2.0). Also, whether it works great or not depends on a number of other factors of which the principal one is the local cable company (who really don't seem to want to give up the STB business either, regardless of a lot of words to the contrary). And of course, the TV has to be capable of using the CableCard. How often do you want to buy a new TV just to keep from using a relatively inexpensive STB from the media provider?
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Sheetal.Pandey
9/6/2010 12:12 AM EDT
Well STB is here to stay for techical and commercial reasons. As a consumer we want almost all entertainment to be put in that small box and expect the price to be under 110 dollars. Its very difficult for the companies who make them. Another thing I dont think people are still ready to see webpages on the TVs, I think the resolution is best on the computer screens for website. Also the privacy issues.
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dspSurfGuy
9/6/2010 5:33 PM EDT
It appears in future STBs will not operate solely in their traditional form via radio frequency broadcast. We shall see more of them supporting IPTV - TV over broadband internet, with possibly such a reciever integrated into the TV set. It is quite easy for a broadcaster to stream their content over the internet and charge for it. Obviously one has to have an Ethernet connection, and just that without a Cable connection. Thats a lower cost for the broadcaster, and hence a lower cost for the viewer.
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chanj
9/6/2010 5:52 PM EDT
For content delivery through satellite, STB will likely need to be provided because it will perform RF down-conversion and DVB decoding. Will DISH network use different technology? Sure it will. It will take times. Yet, will STB be disappeared?
Similarly, for comcast to deliver content, STB will likely need to be there unless it can be integrated into a TV, which will come into a lot of obstacles?
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Rich Krajewski
9/7/2010 1:36 AM EDT
I thought that picture of Steve Jobs holding his new $99 AppleTV box aloft was really scary. It looked like he wanted to hit somebody with it.
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Duane Benson
9/7/2010 11:37 AM EDT
While STB manufacturers are trying to crack this nut and get people to happily pay, the world is changing around them. TV used to be a pretty social activity. It was something that people would gather around and set their schedules around.
Tivo type devices and video on demand helped to change the paradigm of consumers setting their schedule around the TV. The Internet will take care of the rest. Have you ever watched a group of teenagers gathering with their laptops for a LAN party? They alternate between game playing and individually watching "TV" shows that they find in the depths of the Internet. TV isn't a scheduled activity anymore and it's ceasing to be a communal activity as well.
Much of the younger generation has already dispensed with the idea of a stand-alone TV in the same way that they've dispensed with the concept of a tethered land-line phone. As that generation ages and becomes the primary buying demographic, the trend will sweep through the market and the set-top box, perhaps even the "Television" will become as much an anachronism as the public pay phone booth.
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Frank Eory
9/7/2010 4:52 PM EDT
Ira Bahr at DISH shouldn't get his hopes up -- there is still no reason to hope consumers will pay $99 for a set-top box.
For multi-channel video providers like the cable, satellite and IPTV providers, the STB is a necessary evil -- not a CE product that consumers actually desire. It is the gatekeeper for the walled garden of video content, and that will still be the case even if the industry eventually goes a la carte.
The content owners are more than happy to supplement their revenues with some online streaming, but they are a long way away from replacing the monthly subscription multi-channel delivery model with an internet streaming model.
And when they are ready to make that leap, you can bet there will still be a set-top box gatekeeper required to gain entry to that online feast. And people will still hold that fancy new STB in low regard, just as they do today.
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Neo1
9/8/2010 2:39 AM EDT
Yep, that day is still far away when you can choose your program like you choose a youtube video and the youtube was unprofitable till now. The STB's still have the looks and performance of a vacuum tube radio in this era of digital age and costs more than it should, so no wonder consumer are pissed off when they can browse internet and watch movies with their handhelds at $150 they think why the hell is this dumb box in the sitting room so expensive.
So any change is welcome, bring it on Steve! Whether I buy it or not is a different matter though.
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