Parks Associates Blog

Tuesday, August 04, 2009

Broadband-connected TiVos being deployed by cable operators

In our recently-completed Set-top Boxes: Outlook report, we wrote the following:

Consumers report strong interest in the concept of connected consumer electronics, including set-top boxes that link not only to television offerings from their service provider, but also to content hosted on home computers and streaming from the Internet. There is strong demand data for the concept of a set-top box that can pull in content from a variety of sources.

Perhaps more interesting – at least from a service provider’s desire to create new revenue streams – is the percentage of consumers willing to pay additional fees each month for this kind of feature. The percentage of consumers expressing a willingness to pay up to $5.99 per month for such a feature is comparable to the known take rate for Verizon’s Home Media DVR feature, a multi-room DVR and networked set-top box features. Verizon charges FiOS TV subscribers an additional $4 per month for the benefit.

When consumers are asked what features they would find valuable from a connected set-top box, the ability to stream music is the top application. Not too far behind this feature is access to email and customized weather. Access to premium Web video such as TV shows and movies appeals to about half of consumers interested in connected set-top boxes.

There are plenty of ways for cable operators to facilitate delivery of online applications to the set-top box, including transcoding in the network (ActiveVideo Networks or Clearleap, or a homegrown solution being deployed by Verizon), and we've been wondering if browsers will start appearing on more advanced set-top boxes (there is a growing consensus that browsers will be found on many connected consumer electronics). Or, the operator could simply buy a web-enabled set-top box box and deploy it (Digeo, Entone, TiVo, etc.).

There is an interesting announcement from RCN regarding its selection of TiVo as its primary DVR platform. The key to this announcement is the fact that RCN customers with TiVos will be able to access online video through services such as Amazon Video On Demand and other features.

In addition, notes the article from Multichannel News, the TiVo DVR from RCN will let users access trademark TiVo features such as Season Pass and WishList (to automatically record shows based on keywords or other parameters) searches and receive personalized suggestions. Subscribers will be able to schedule recordings via the Web or with mobile devices.

The RCN-TiVo DVR will offer interactive applications, such as viewing pictures and listening to music stored on a home PC, accessing millions of songs from Rhapsody, and receiving weather reports and traffic updates.

RCN is not TiVo's only TV operator win this year, however. CED magazine reports that Earlier this year, Evolution Broadband announced a deal with TiVo to use the latter’s Series 3 high-definition set-top boxes. With its recent waiver from the Federal Communications Commission, the TiVo deal will allow Evolution to offer small- to medium-size cable operators access to Internet content from the likes of Amazon and Netflix, which provides them with a VoD-like service without the expensive network equipment.

Things are definitely getting interesting.

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