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