Set-top Boxes Open Up

While the form factor of the traditional set-top box (STB) has evolved little since the 1970s, the functionality powered by the software inside has changed as much as the price of gas over that same period, driven by evolving viewing habits, video handling functionalities and bone-crushing competition from telcos and satellite service providers.

Since the Carter administration, providers have shoehorned rudimentary program guides, video compression, content security, digital rights management (DRM) and, more recently, HD programming support and DVR functionality into these pizza box-sized devices.

But the role, the functionalities and even the look and feel of the STB has begun a dramatic, accelerated evolution, much like the gas-guzzling, all-steel, bigger-is-better autos of the late ’70s endured in the years following the gas crisis. One industry underwent a foundational transformation, while one lies ahead for the STB business.

“Since STBs are the second biggest cost of IPTV rollouts behind content acquisition, service providers should open the device and work with the consumer electronics industry and the software community to drive the price down by standardizing features and developing a far broader array of software applications for them,” advised Arjang Zadeh, leader of Accenture Inc.’s global network practice. “Standardization hasn’t happened yet, but it has to, and efforts to open the boxes are already under way.”

One development pushing that standardization is the FCC’s mandate that all cable operator STBs must have separable security by July 7. The so-called CableCard rule is forcing open the door to innovation with these long closed devices, with industry groups such as CableLabs pushing to enable application development relating to interoperable interactive TV programs and more.

However, many assert that it’s Microsoft Corp. – which doesn’t make STBs and is often accused of attempting to lock in users to its own priority technologies – that has done the most to advance the role of the set-top box. In addition to providing middleware that works with set-top boxes and other existing video networking infrastructure, Microsoft is hard at work integrating its IPTV Edition Software with the Xbox 360, which already enables interactive gaming using the Internet, can download content and added instant messaging in April.

During a recent demo of the system’s user interface, Microsoft Marketing and Communications Director Ed Graczyk was asked about the future of the STB. “You’re looking at it,” he replied.

Even STB giant Scientific Atlanta, now a Cisco Systems Inc. company, acknowledges the set-top box is changing in fundamental ways.

“The STB has to have more than HD, DVR, etc.; it needs to have connected home features such as the ability to interact with other IP devices,” said David Davies, vice president of strategy and product marketing for Scientific Atlanta. “The IP STB should also be able to connect to the Internet and support on-demand video.

“It’s got to go beyond content to become a driver of applications and services as this is how service providers will need to truly differentiate their services. I’m talking beyond on-screen caller ID to sending SMS messaging to TVs and where interactive TV applications become part of the experience it enables.”

Davies credits CableLabs’ Open Cable Applications Program (OCAP) as paving the way for this broad STB evolution. OCAP is a Java-based open application platform for interactive TV services. It includes middleware, and applications and authoring tools. The idea behind OCAP is to encourage third parties to develop two-way applications for cable TV networks. Such applications include, but are not limited to, DVR, programming interfaces, ad insertions and gaming. “This pushes forward the creation of a layer of standardization,” said Davies. “And the applications need to be portable across service provider devices. That’s what facilitates the applications and services. Operators can take the results and differentiate their services by combining different applications with different user interfaces.”

David Goodwin, product manager for digital video solutions at Motorola, adds, “If many vendors and [cable operators] adopt OCAP, they’ll unlock the enabling capabilities that their cable plans already support.”

However, while there’s been talk for many years about the promise of interactive TV to more closely engage viewers in their programming and open up brand new opportunities for advertisers to reach more targeted and interested audiences, Accenture’s Zadeh doesn’t see it as a must-have. “It’s a nice to have for competitive differentiation, but it’s not a killer applications for IPTV,” he said, adding that it’s more important for a STB to have an Internet port now than support for interactive TV, perhaps because it’s easier.

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