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Is the Closed Set-top Box Doomed?

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Can the closed set-top box survive the coming onslaught of Internet-based hardware and services for media consumption? That may be the real, if unasked, question raised by a good profile in Tuesday’s Wall Street Journal (subscription required) which talks about new features from startups in the set-top biz but barely touches on alternatives already in motion, like Apple TV, Slingbox, Joost and others.


As the Journal profile notes, both cable and telco-based video providers have had to upgrade their hardware platforms of late, to handle the interactivity and advanced features that will lure new users and keep old ones happily sending in monthly payments. The article, which spotlights 2Wire, the STB outfit behind AT&T’s Homezone play, credits DVR startups TiVo and Replay TV for spurring some of the interactivity action, while also noting that because of their lack of deals with big carriers, TiVo is struggling and Replay is bankrupt.

But the money quote from In-Stat analyst Mike Paxton seems a bit dated: “In this business, if you want to play, you need to have some sort of relationship with one of the big operators,” he tells the WSJ. “It’s tough being a stand-alone player.”

Going forward, is that still the case?

TiVo and Replay certainly felt the pain, but the new standalone players are big kids like Apple and Cisco (whose Linksys division is readying a beefy set-top system, as Light Reading’s Phil Harvey saw in January at CES), or software players like Joost who don’t have the overhead of a box. And with cable card slowly becoming a reality, isn’t there more, not less, of a possibility that set-top functionality will move into the TVs themselves, or into the network?

In that case, perhaps there is a new wave of acquisitions afoot, where the closed STB innovators get sucked up by service providers (for their continually closed offerings) or for other hardware players — HP, Apple, Google? — who want to skim some of the middleman profits found between viewer and content. If so, maybe the 2Wire story has a happier ending than ReplayTV’s. But against open standards, innovation and the Internet, it’s hard to see the closed STB sticking around for long.

8 Responses to “Is the Closed Set-top Box Doomed?”

  1. Three letters: D.R.M. The operators don’t want consumers to think about the technology or what they should be able to do with it. If everything winds up on the network and the STB goes bye-bye, all the better for the operators. They will get their way, inevitably. Until some brilliant hacker kid comes along and ruins it for them.

    Coincidentally, imagine this: being billed by the minute for video you save on their servers (they’ll sell it as “Never worry about how much space is left on your DVR again!”) Spin, spin, spin.