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Next-Generation Digital Set-Tops: Hub of the Connected Home? Product Image

Next-Generation Digital Set-Tops: Hub of the Connected Home?

  • ID: 29072
  • November 2002
  • 223 pages
  • Parks Associates

As entertainment grows as a key driver for home networking, the set-top box assumes a critical role as content aggregator and distributor.

This report examines the technology and market trends that are dictating the evolution of the digital STB.

It includes an overview of home networking trends, PVR capabilities, a view at current commercial or pilot rollouts, and forecasts through 2006.

Rationale for Report

As more and more IP-based devices find their way into U.S. homes, the search is intensified to find a single device that can both interface with the wide-area network and manage the distribution of information and content to devices connected to the local or home-area network.

While many different platforms are capable of delivering this level of functionality (for instance, hubs, routers, bridges, even set-top boxes), there is no consensus as to which of these devices will become dominant. However, given the pervasive availability and consumer acceptance of the set-top box platform, many observers believe that the set-top will emerge as the device of choice for delivering networked IP-based services to and through the home.

Published 4Q, 2002

<P>Executive Briefing</P><BR><P>1.0 Introductory Comments<BR>   1.1 Rationale for this Report<BR>   1.2 The Four Generations of Digital Set-Tops</P><BR><P>2.0 Primary Market Determinants<BR>   2.1 Technological Advances in the STB Platform<BR>      2.1.1 Silicon Advances<BR>         SoC solutions<BR>         DSTB Chips and Window Media 9<BR>      2.1.2 Advances in OS, Middleware and Applications Software<BR>         Operating Systems<BR>         Middleware<BR>         Application Software<BR>         Advances in Media Distribution Software<BR>      2.1.3 The role of standardization efforts<BR>   2.2 Consumer Factors<BR>      2.2.1 Modular Purchasing Behavior<BR>      2.2.2 Consumer (Un)Willingness to Bear the Costs of Advanced Set-Tops<BR>   2.3 Spending by U.S. Multiservice Operators (MSOs)<BR>      2.3.1 Move from analog to digital format<BR>      2.3.2 Capital shifting from fixed to variable capex<BR>      2.3.3 Move to multiple service paradigm<BR>      2.3.4 Contradictory Financial & Competitive Pressures<BR>         Competitive threats<BR>         Decline in Legacy Revenues<BR>         Increased Subscriber Churn<BR>         Poor Return on Capital (ROC)<BR>         Erosion of Market Capitalization<BR>         Collapse of MSO Credit Ratings<BR>         Emphasis on Growing Net Profits and Free Cash Flow<BR>      2.3.5 Rollout of new digital entertainment services<BR>         Digital cable<BR>         Video-on-demand<BR>         PVR<BR>         Pervasive ambivalence toward new services<BR>         Platforms Are Likely to Remain Physically Separate<BR>      2.3.6 The Viability of the Side-Car Model<BR>      2.3.7 MSOs Remain Reluctant to Embrace 4G Set-Tops/Media Servers<BR>   2.4 Concerns Among Set-Top Vendors<BR>      2.4.1 Losses Mounting<BR>      2.4.2 The issue of DSTB retail availability<BR>      2.4.3 The FCC Mandate for Digital TVs<BR>      2.4.4 The issue of digital rights management<BR>   2.5 Other Platforms Emerging to Compete with the Media Server Set-Top<BR>      2.5.1 The PC as the Home Media Server<BR>         Microsoft<BR>         Intel<BR>         The Emergence of PC-Based Digital Entertainment Content<BR>      2.5.2 The Gaming Console as the Home Media Server<BR>   2.6 Network-Based Services Could Eliminate Need for Thick Client Boxes</P><BR><P>3.0 Forecasts through 2006<BR>   3.1 Cumulative Digital Cable, VOD, and PVR Subscribers<BR>   3.2 Number of U.S. Households with 4G/Media Server Cable DSTBs<BR>   3.3 Total Value of 4G Cable DSTBs Shipped into U.S. Households</P><BR><P>Analysis & Forecasts</P><BR><P>1.0 The Platform<BR>   1.1 The Fundamental Architecture<BR>      1.1.1 System Board<BR>      1.1.2 Tuners<BR>      1.1.3 Modulator and Demodulator<BR>         Quadrature Amplitude Modulation (QAM)<BR>         Orthogonal Frequency Division Multiplexing (OFDM)<BR>         Quadrature Phase Shift Key (QPSK)<BR>      1.1.4 Demultiplexer and Decryptor<BR>      1.1.5 Decoders<BR>      1.1.6 Graphics processor<BR>      1.1.7 Central Processing Unit (CPU)<BR>      1.1.8 Memory<BR>         RAM/DRAM/SRAM<BR>         ROM<BR>         FLASH Memory<BR>      1.1.9 Storage<BR>      1.1.10 Physical Interfaces<BR>         Telephone/Dial-up modem interfaces<BR>         Ethernet port (F-Connector or RJ-45)<BR>         Serial and parallel ports<BR>         Smart-card readers/slots<BR>         PCMCIA card slots<BR>         IR-based remote control and keyboard interfaces<BR>         Audio Input/Outputs<BR>            Baseband Audio (L/R) Input/Outputs<BR>            Sony/Philips Digital Interfaces (S/PDIF)<BR>         Video Input/Outputs<BR>            Baseband Video Input/Output<BR>            SCART<BR>            RF Input/Output<BR>            S -Video Input/Output<BR>            YPbPr (YCbCr) component output<BR>         IDE (EIDE) Port<BR>      1.1.11 LAN Interfaces<BR>         Wired Solutions<BR>            Ethernet<BR>            IEEE 1394 (FireWire®) <BR>            Universal Serial Bus (USB)<BR>         No-New-Wires<BR>            HomePNA (HPNA)<BR>            Powerline<BR>            Coax<BR>         Wireless<BR>            802.11<BR>            HomeRF<BR>            UWB<BR>   1.2 The Four Generations of Digital Set-Tops</P><BR><P>2.0 The Players<BR>   2.1 Celerity<BR>   2.2 CiaoLab Technologies<BR>   2.3 Eagle Broadband<BR>   2.4 Ener1<BR>   2.5 Motorola<BR>   2.6 Pace Micro Technology<BR>   2.7 Pioneer Electronics USA<BR>   2.8 Plexuscom/GCT-Allwell<BR>   2.9 Scientific Atlanta<BR>   2.10 SonicBLUE<BR>   2.11 TiVo Inc.<BR>   2.12 Sidebar: The Sony Cocoon DVR</P><BR><P>3.0 The Context<BR>   3.1 Industry Factors<BR>      3.1.1 Multiservice Operators (MSOs)<BR>         Move from analog to digital format<BR>         Capital shifting from fixed to variable capex<BR>         Move to multiple service paradigm<BR>            Financial incentives<BR>               Declining Legacy Revenues<BR>               Increased Subscriber Churn<BR>               Market Pressure<BR>               Competitive threats<BR>            Examples of multiple & bundled service offerings among MSOs<BR>               Cox Communications<BR>               RCN<BR>               AT&T Broadband<BR>            Rollouts of new digital entertainment services<BR>               Digital cable<BR>               Video-on-demand<BR>               HDTV<BR>               PVR<BR>            Set-Top Platform is Pervasive<BR>               Current penetration<BR>               Well-established distribution model<BR>            Cable’s ambivalence toward new services<BR>               Front-end loaded strategies<BR>               Sufficiency paradox<BR>            Pullbacks in roll-outs of advanced STBs<BR>               Cablevisions Cancellation of High-End Sony Boxes<BR>               AT&T’s decision on the DCT5000<BR>               Charter’s “side-car” strategy<BR>               Most Cable MSOs remain reluctant to rollout thick-client boxes en masse<BR>      3.1.2 Set-Top Vendors<BR>         Losses mounting at set-top manufacturers<BR>            Scientific Atlanta<BR>            Motorola<BR>            Pace Micro<BR>         The issue of DSTB retail availability<BR>            FCC Mandate for Retail Availability of Set-Top Boxes<BR>            Will This Model Truly Come to Pass?<BR>               Power of the Oligarchs<BR>               Service providers may have a beef or two<BR>            Will this Model Work?<BR>         The issue of digital rights management<BR>   3.2 Consumer Factors<BR>      3.2.1 Interest in New Digital Services<BR>         Digital cable<BR>         VOD<BR>         PVR<BR>      3.2.2 Negative perception of cable companies<BR>   3.3 Technology Factors<BR>      3.3.1 General Trend toward Convergence<BR>         Explaining Convergence<BR>      3.3.2 Advances in the Set-Top Platform<BR>         Silicon Advances<BR>            ATI Technologies<BR>            Conexant<BR>            Broadcom<BR>         Advances in OS, Middleware and Applications Software<BR>            Operating Systems<BR>            Middleware<BR>               What is middleware?<BR>               Middleware Open Standards and Set-top Boxes<BR>               Middleware Vendors<BR>            Application Software<BR>      3.3.3 Advances in Media Distribution Software<BR>         ViXS<BR>         Magis Networks<BR>         FireMedia<BR>         Ucentric<BR>      3.3.4 The role of standardization efforts<BR>         DOCSIS<BR>         OpenCable<BR>            OpenCable Hardware Specifications<BR>            OpenCable Middleware Specifications</P><BR><P>4.0 Analysis & Forecasts<BR>   4.1 No Doubt: Multiservice Models Mean Multiservice CPE<BR>   4.2 Platforms are likely to remain physically separate<BR>   4.3 MSO Financial Pressures Limit Rollout of Media Server DSTBs<BR>      4.3.1 Stock Devaluations<BR>      4.3.2 Collapse of MSO Credit Ratings<BR>      4.3.3 Emphasis on Growing Net Profits and Free Cash Flow<BR>      4.3.4 Penetration of New Digital Services Remains Limited<BR>      4.3.5 The Viability of the Side-Car Model<BR>      4.3.6 MSOs Remain Reluctant to Embrace 4G Set-Tops/Media Servers<BR>   4.4 The FCC Mandate for Digital TVs<BR>   4.5 Consumer Desire to Keep the Platforms Separate<BR>   4.6 Uncertainty Surrounding Consumer Willingness to Bear the Costs of Advanced Set-Tops<BR>   4.7 Other Platforms Emerging to Compete with the Media Server Set-Top<BR>      4.7.1 The PC as the Home Media Server<BR>         Microsoft<BR>         Intel<BR>         The Emergence of PC-Based Digital Entertainment Content<BR>      4.7.2 The Gaming Console as the Home Media Server<BR>   4.8 Network-Based Services Could Eliminate Need for Thick-Client Boxes<BR>   4.9 Forecasts Through 2006<BR>      4.9.1 Building the Model<BR>      4.9.2 Cable Network Upgrades<BR>      4.9.3 Forecast for U.S. Digital Cable Households<BR>      4.9.4 Forecast for U.S. Cable VOD Households<BR>      4.9.5 Forecast for U.S. Cable PVR Households<BR>      4.9.6 Cumulative Digital Cable, VOD, and PVR Subscribers<BR>      4.9.7 Number of U.S. Households with 4G/Media Server Cable DSTBs<BR>      4.9.8 Total Value of 4G Cable DSTBs Shipped into U.S. Households<BR> </P><BR><P><BR>Executive Briefing</P><BR><P>Figures in Section 1.0<BR>Evolution of Digital Set-Top Box</P><BR><P>Figures in Section 2.0<BR>Broadband Upgrades as a Percentage of Total MSO Cable Plant<BR>Erosion of Market Capitalization<BR>Credit Ratings from Standard & Poor and Moody’s<BR>Select Metrics from Several U.S. MSOs<BR>Quarterly Growth in Digital Cable Subscribers<BR>Forecast for U.S. Digital Cable Subscribers<BR>Forecast for U.S. Cable VOD Subscribers<BR>Forecast for U.S. Cable PVR Subscribers<BR>The Sufficiency Paradox</P><BR><P>Figures in Section 3.0<BR>Forecast for U.S. Digital Cable Services<BR>Forecast for 4G/Media-Server Cable DSTBs (Cumulative)<BR>Forecast for 4G/Media-Server Cable DSTBs (Annual)<BR>Forecast for 4G/Media-Server Cable DSTBs (Cumulative Value)<BR>Forecast for 4G/Media-Server Cable DSTBs (Annual Value)</P><BR><P>Analysis & Forecasts</P><BR><P>Figures in Section 1.0<BR>Evolution of the Digital Set-Top Box</P><BR><P>Figures in Section 2.0<BR>Front view of the Sony Cocoon<BR>Rear View of the Sony Cocoon</P><BR><P>Figures in Section 3.0<BR>Status of MSO Network Upgrades<BR>Cox Communication’s Shift in Capex<BR>Future of Residential Services<BR>AOL’s Bundled Service Dream<BR>Churn Rate Among Select MSOs Across Different Services<BR>Cost of Churn Per Subscriber Across Different Services<BR>Decline in the Value of MSO Stock Prices<BR>Cox Communication’s Network Upgrades Progress<BR>Cox Communication’s Bundled Service Trends<BR>RCN’s Bundled Service Offerings<BR>RCN’s Bundled Service Take-Rates<BR>Forecast for U.S. Digital Cable Subscribers<BR>Quarterly Historical Growth Rate for U.S. Digital Cable Subs<BR>Ownership of Cable & Satellite Set-Tops Among Internet HH<BR>The Sufficiency Paradox<BR>Examining the Sufficiency Paradox<BR>Forecast for U.S. Digital Cable Subscribers<BR>Consumer Interest in Video-on-Demand<BR>Forecast for U.S. Cable-Based Video-on-Demand<BR>Consumer Interest in Personal Video Recording Service<BR>DOCSIS Roadmap<BR>DOCSIS & PacketCable</P><BR><P>Figures in Section 4.0<BR>Decline in Value of MSO Stock Prices<BR>Decline in MSO Credit Ratings<BR>Select Financial Metrics for MSOs (e.g., free cash flow)<BR>Quarterly Historical Growth Rate for U.S. Digital Cable Subs<BR>Thin versus Thick-Client Strategy<BR>PC/Information versus TV/Entertainment<BR>Forecast Model for 4G Cable DSTBs<BR>Status of MSO Network Upgrades<BR>Forecast for U.S. Digital Cable Subscribers<BR>Forecast for U.S. Cable-Based Video-on-Demand<BR>VOD Forecast: Annual versus Cumulative Growth Rate<BR>Forecast for U.S. Cable-Based PVR<BR>Combined Forecast for Digital Cable, VOD, & PVR<BR>Cumulative Forecast for 4G Cable DSTBs: Units<BR>Annual Forecast for 4G Cable DSTBs: Units<BR>Cumulative Forecast for 4G Cable DSTBs: Revenue<BR>Annual Forecast for 4G Cable DSTBS: Revenue</P>

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