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Cisco Exec: Thinner Pay-TV STBs Coming

Mari Silbey
1/14/2014
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Unlike some of his colleagues, Nick Thexton doesn't see the traditional pay-TV set-top box going away. But he does see it getting thinner.

In a conversation with Light Reading at the Consumer Electronics Show in Las Vegas last week, Thexton, CTO for Cisco Systems Inc. (Nasdaq: CSCO)'s Service Provider Video Infrastructure group, declined to declare the death of the tried-and-tested set-top. He did, however, observe that pay-TV providers are starting to shift away from deploying set-tops with thick, embedded middleware stacks. While these boxes are still a significant part of the service equation, he noted, operators are also considering thinner STBs, or clients, now for video delivery.

"I think people's faith in the network is increasing," said Thexton. But, he added, "I think the client is important still."

As more video processing functions move into the network, some industry pundits have predicted that set-tops will go away altogether. But, at least in the near term, more providers are focused on installing high-powered media gateways in customer homes and linking them to thin-client IP set-tops.

There's also a set-top renaissance taking place in the retail market, thanks to the early success of over-the-top media streamers from Roku Inc. and Apple Inc. (Nasdaq: AAPL) and the Chromecast HDMI streaming stick from Google (Nasdaq: GOOG). Although these devices aren't built to support traditional cable services, cable operators are exploring how they can be used in conjunction with IP video delivery and cloud-based services. (See 5 TV Tech Trends Heading for CES and Alticast Primps for Vegas Spotlight.)

A fan of HDMI adapters, Thexton said he is starting to see customers get interested too. He noted that streaming sticks are capable of fully rendering an HTML5 user interface, and that the price point has improved since they were first introduced several years ago. As client hardware slims down, however, the main question that Thexton has is: Who should buy these devices? Should subscribers buy their own hardware or should operators continue to own the equipment and lease it to customers?

If nothing else, Thexton said he sees hardware as a token for service providers. Even if it has very little functionally, it would still extend the cable operator's brand into subscribers' homes, providing a badge of belonging and a way for consumers to promote that they're "part of the club."

In a similar vein, Thexton touched on the tension between service providers and smart TV manufacturers. He described the relationship between the two as "not formalized yet," saying that both sides need each other but their interests don't completely align. He noted that each party still wants to own the user experience.

Given all of the market variables, the choices ahead for operators are numerous. Service providers can move nearly everything into the cloud; they can invest in media gateways combined with multiple IP clients; and they can employ a mixture of over-the-top and managed video services.

Only one thing is certain: There won't be a single set-top form factor going forward. But there will likely be more thin clients from service providers in the days ahead.

— Mari Silbey, special to Light Reading

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albreznick
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albreznick,
User Rank: Blogger
1/17/2014 | 6:15:08 PM
Re: STBs survive
OK, Greg. Thanks. Let me ask you another question too. What do you think the deployment split will be between thin client boxes and thick client boxes in, say, five years?   
GregW333
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GregW333,
User Rank: Lightning
1/16/2014 | 7:11:53 PM
Re: STBs survive
depends how "thin".  Less than $50 is my guess.  
albreznick
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albreznick,
User Rank: Blogger
1/16/2014 | 5:43:56 PM
Re: STBs survive
More love and less hate, eh? Or rather, less to love and hate. How low do you think the price for thin clients could go?  
GregW333
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GregW333,
User Rank: Lightning
1/15/2014 | 1:51:27 PM
Re: STBs survive
It would appear to me that the STB "functionality" is required some where.  The L-H relationship won't go away but with a $50ish thin STB it will be lessened :-)
albreznick
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albreznick,
User Rank: Blogger
1/15/2014 | 11:53:35 AM
Re: STBs survive
Sounds like you think STBs aren't going away either, Greg. So will that love-hate relationship ever change?
GregW333
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GregW333,
User Rank: Lightning
1/15/2014 | 8:58:49 AM
Re: STBs survive
Thin STBs make sense since as we all know there's a love-hate relationship with SPs and the CAPEX intensive STBs.  STBs have always been an unrealized trojan horse to control the home.  Thick or thin this is still true.

I've never liked embedding STB functionality in to the TV for the simple reason that the upgrade cycle for TVs is 2-3x that of a STB.  

For Cisco, this makes a lot more sense than their previous "high-end" only STB strategy.   See why...    http://greywhalemanagement.blogspot.com/2013/02/high-end-only-stb-vendor-is-this.html
albreznick
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albreznick,
User Rank: Blogger
1/14/2014 | 4:17:31 PM
STBs survive
So Thexton sees a future where traditional STBs continue in some homes while others get uber media gateway boxes combined with thin, little IP set-tops. And he also sees a future for media streaming sticks. To me, the big question is what the mix will look like. Will it be mostly sticks or thin clients or the traditional STBs? Any thoughts out there on that?      
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