Parks Associates Blog

Wednesday, May 28, 2008

Requiem for a Set-top Box?

After years of discussion, the consumer electronics industry and the cable industry seem to have reached a meeting of the minds. Sony and six major cable companies (Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Charter Communications Inc., Cablevision Systems Corp. and Bright House Networks) have come to terms about how to incorporate cable cards and cable’s technology into televisions, making set top boxes a thing of the past.

Previously cable cards provided only the ability to unscramble and view basic cable, but no two-way services like video on demand or DVR use. With the new arrangement, the television will still need the cable card for access, but all features will be available to the viewer, while still allowing them to connect other devices such as TiVo.

The National Cable and Telecommunications Association hopes that more consumer electronics companies will follow Sony’s lead. For that matter, consumers probably have the same hope since one less box and one less remote makes home entertainment that much easier and more enjoyable.

This can certainly be positive news for both consumers (allowing greater choice of how they receive premium cable services) and for cable companies, who are anxious to get the ball rolling on alternatives to the set-top box and reduce their expenditures. But unlike many of the news headlines that have emerged from this announcement, we’re not likely to be writing Requiem for a Set-top Box just yet. As we’ve written in previous blogs, there are still plenty of hurdles to overcome in getting CableCARD- and tru2way-enabled products onto store shelves and into homes. We’ll take a wait-and-see attitude on this most recent announcement to see what develops.

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