Set-top boxes

Look, Ma! No Set-Tops!

Kissing the cable set-top box goodbye, Ziggo has started rolling out its complete pay TV service to TVs without any separate set-tops.

Ziggo B.V. , the largest MSO in the Netherlands with 2.3 million digital cable subscribers, is offering the “box-less solution” to customers via small removable security modules that resemble the CableCARD security modules used in the US. The Dutch cable company says the modular cards -- known as CI+ modules (versions 1.3 and higher) and produced by Quantis and Smit -- can work with more than 250 TV set models, including such popular brands as LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) , and Samsung Electronics Co. Ltd. (Korea: SEC).

Unlike most CableCARD-equipped TV sets, which support linear TV lineups but not VoD services, the TVs outfitted with the CI+ modules can support both linear TV channels and interactive VoD services. Thanks to this distinction, Ziggo can offer its entire pay TV bundle through the modules.

In media presentations earlier this week, Ziggo executives noted that most new TV sets are now sold in conjunction with CI+ modules in the Netherlands. As a result, they said, there are already more than 900,000 modules being used in the company’s footprint, although many of them are earlier versions of the modules that won’t support the MSO’s interactive TV services.

For Ziggo, the box-less option will mean that it could slash set-top costs. The move will also enable it to deploy the same user interface whether its services are delivered to traditional set-tops or the specially equipped TV sets.

Ziggo, which has been trying to stave off the acquisition efforts of Liberty Global Inc. (Nasdaq: LBTY), also announced that the new CI+ modules will support the cloud-based video services that it has been rolling out for the past eight months. These services, which rely on a platform supplied by ActiveVideo , include a user interface and VoD. The MSO started offering these services over legacy digital set-tops from Humax Co. Ltd. and Samsung in March. (See: Ziggo Rejects Liberty Takeover Bid and ActiveVideo Storms Europe.)

ActiveVideo executives said their CloudTV platform has now been deployed to more than 800,000 cable set-tops in 600,000 cable homes. They said subscribers have actually activated CloudTV on 230,000 of those set-tops so far, helping to generate higher VoD revenue for Ziggo.

“They’re using our platform to create VoD services,” said Sachin Sathaye, vice president of strategy and product development for ActiveVideo, noting that Ziggo’s ARPU has climbed nearly 6 percent on a year-over-year basis. “They’re suddenly looking like the Netflix of the Netherlands.”

Encouraged by the initial results with set-tops, Ziggo plans to extend the CloudTV platform to unmanaged consumer electronics devices, starting with the TVs outfitted with CI+ modules. Plans also call for expanding the roster of cloud-based services to network-based DVRs, interactive gaming, and advanced advertising.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

albreznick 11/7/2013 | 9:53:55 PM
Re: post-STB market? Maybe because they can save on other costs, like the huge warehouses for the STBs and lots of expensive truck rolls to fix or replace the STBs. Believe it or not, many cable operators don't really want to be in the hardware business or have a love-hate relationship with their STBs. I'd love to see a detailed cost comparison between STBs and modules. 
dfearon 11/7/2013 | 5:34:24 AM
Re: post-STB market? Do we know what the cost of these CI+ modules will be? In today's markets fully functional MPEG-4 STBs with interactive middleware, USB PVR and potentially even DRM support are costing less than $50. The user experience on a STB is still vastly superior to any SmartTV or CI+ interface, therefore with costs on par or less than CI+ modules, why would an operator choose this strategy?
albreznick 11/6/2013 | 11:18:01 PM
Re: post-STB market? No, they couldn't possibly be rented out at the same price. They might even be included with the price of the TV sets. It's true that cable cos lik Ziggo will be forgoing STB rental fees. But they'll also be cutting their inventory costs enormously by getting rid of the STBs, not to mention their customer service expenses from truck rolls when the boxes go bad. So they may save more than they make on rental fees now. 
DOShea 11/6/2013 | 9:01:04 PM
Re: post-STB market? I'm surprised cable Tv companies would be willing to let set-top rental fee revenue go. Would these modules be rented out at the same price?
albreznick 11/6/2013 | 4:55:00 PM
Re: post-STB market? Good question, Benoit. I'm not sure what the answer is. Ziggo may already have network DVRs now, just not using the CloudTV platform. Or they may just have multi-room DVRs now. That barely checking into. Will let you know what I find out.
albreznick 11/6/2013 | 4:52:54 PM
Re: post-STB market? Yes, Carol. This is an early example of the virtualized STB. It will be very interesting to see how many cable customers opt to go this box-less, or box-free, way.  
Benoit Mercier 11/5/2013 | 7:51:18 PM
Re: post-STB market? If network-based DVR is a future feature, how do you record your programs in the meantime?
Carol Wilson 11/5/2013 | 7:25:09 PM
Re: post-STB market? Does this mean cable companies won't bother to "virtualize" their STBs? Is is this the first of the virtual STBs?
albreznick 11/5/2013 | 4:19:26 PM
post-STB market? Talk about the post-STB market. It will be fascinating to watch Ziggo roll out services to TV sets with these advanced secrurity modules. Will it be the eventual death of the old cable set-top box? It cedrtainly sounds like it could be. We'll see.  
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