Blog Post

Did the cloud just kill the set-top box?

At the NCTA Cable Show, Comcast (s cmcsa) CEO Brian Roberts showed off the next generation of the company’s TV user interface. Built under the code name Xcalibur, Comcast’s new user interface is already being tested by subscribers in Augusta, Ga., with plans to possibly roll it out to more geographies soon.

More important than the UI update, however, is how it has been built and delivered. Behind Xcalibur is a cloud-based platform that moves the intelligence out of the set-top box and into the network. For consumers, the move to a cloud-based system will largely be seamless. But for Comcast, moving to the cloud means it will be able to build new features, improve the user interface and iterate on its product more quickly and easily than if was building for individual set-top boxes.

“What the cloud allows you to do is to have faster innovation,” Roberts said. “Boxes have different generations, they become outdated…. That doesn’t happen in the cloud.”

Not just that, but it allows Comcast to deliver TV and on-demand feeds to multiple devices with little extra work put into it. Comcast’s plan, essentially, is to make the same user interface available across multiple screens and devices within and outside of the homes. Already it has an iPad app, which lets users navigate their channel listings, on-demand video assets and Xfinity online streaming videos. And it announced a partnership with Samsung at CES to build an app for connected TVs that will be available later this year.

The actual new features that Comcast showed off are pretty impressive, and include:

  • An improved search interface. Subscribers can use a new alpha-numeric keypad to search for relevant channels, shows and topics across live TV listings and on-demand titles.
  • More personalization. The interface remembers viewer favorites, including favorite TV shows, actors and sports teams — and can show viewers wherever those favorites are playing.
  • A better “back” function. Pushing “back” no longer just takes you to the last channel you were watching, but pulls up a list of the last several shows, channels or on-demand video titles you had navigated through.
  • A graphically rich on-demand UI. Comcast’s On Demand assets are now better represented, with movie art and different categories of content.
  • Recommendations. Have you favorited a show or a movie? Then the new Comcast UI can suggest other titles like it.
  • Apps. The addition of Internet-enabled applications will let Comcast add more relevant non-TV content to the UI. Roberts showed off Weather, Traffic, Pandora and Facebook apps, but more will likely be added in future iterations.
  • Social hooks. The new UI allows users to share what they’re watching on Facebook and Twitter. And the Facebook app lets them see what their friends like to watch, adding one more level of social recommendations to the system.

Comcast isn’t the only video distributor building cloud-based solutions for its UI; Verizon, (s VZ) for instance, has had features like universal search and social features built into its FiOS pay TV offerings for years, as it helpfully reminded us in a press release issued today. Other operators, like Time Warner Cable, (S TWC) Dish Network (s DISH) and Cablevision (s CVC) are also building cloud-based interfaces that could be viewed across multiple screens. We expect more to follow suit as the technology becomes more widely available.

As we’ve written before, not only will cloud-based cable interfaces enable operators to reach more screens, but they could potentially replace the set-top box altogether. After all, who needs a box when the same user experience can be delivered directly to the TV? That may be bad news for the set-top box manufacturers, but it’s good news for the broader industry. It means faster innovation, lower costs and, since so many customer service calls are a result of set-top box problems, increased customer satisfaction. In the future, it could mean some operators being able to offer streaming-only services to subscribers over broadband networks.

7 Responses to “Did the cloud just kill the set-top box?”

  1. What consumers really want to know is “how much will this effect the cost of traditional cable?” If it does not dramatically decrease the monthly cost then i believe Comcast will cont to those people who learn how to utilize online content for a fraction of the cost.

  2. Mitch Thompson

    “That may be bad news for the set-top box manufacturers, but it’s good news for the broader industry. It means faster innovation, lower costs and, since so many customer service calls are a result of set-top box problems, increased customer satisfaction.”

    Lower cost for operators does not equal lower costs for consumers…

  3. Billy Polcha

    Ryan, nice article but you failed to mention that Brian Roberts said that he does not see the STB going away & you also failed to mention the new RF remote control that works through walls. Its all about security & the STB provides the security demeaned by the content creators.

    • All good points. And one more. Isn’t the STB a profit center? Some easy coin? Which company was the one that urged Joplin tornado victims search their wreckage for the STB and return it lest they be charged a fee?

      • Ryan Lawler

        @Yacko, The set-top box does bring in revenue, the question is how profitable it is over the long term. For one thing, each box has a cost to purchase, deploy and install. If cable companies could reduce the cost of installation by making the “set-top” software as opposed to hardware-based, some sort of thin client with minimal hardware necessary, that would go a long way to lowering costs.

        There’s also the question of support. On Time Warner Cable’s earnings call, Glenn Britt said he could see a world without set-top boxes at some point. He said while the company might bring in less revenue over the short term, there was the potential to improve margins because so many of the company’s support calls were due to set-top box issues, which can require a truck roll and a new box. So doing away with the set-top would lower revenue, but could increase customer satisfaction and customer support costs.

    • Ryan Lawler

      @Billy, I’m not sure I buy the security argument, especially since other providers — like Time Warner Cable — have said they are looking to make streams of content available without a set-top box. If Comcast plans to keep set-top boxes around, I think it’s primarily doing so as a business decision, not due to technology requirements.