Cable industry zooms in on multiscreen device market

Joseph O'Halloran ©RapidTVNews | 04-04-2012

A new research paper is suggesting that cable operators are undertaking a sea change away from services based around set-top box (STB) hardware and toward software and services.
Prime evidence for this shift, asserts the IHS Screen Digest Insight Report, “Cisco, NDS, Google and Motorola Play Musical Chairs” comes from the number of recent of acquisitions and divestments in the US cable market, notably Cisco’s $5 billion purchase of NDS. The prize on which eyes are now focused, says the analyst is what it describes as the ‘booming’ opportunity for pay-TV multiscreen devices including smartphones, media tablets, portable media devices, video game consoles, personal computers and Internet-enabled televisions (IETVs).

In all the analyst calculates that the number of multiscreen devices active on global pay-TV networks will likely rise to 303.7 million units by 2015, up by a factor of more than 10 from 29.5 million in 2010. Such growth, it notes, ought to be contrasted with the ‘relatively flat’ performance of the STB market, where the installed base of set-top boxes should grow at a compound annual rate (CAGR) of only 9% as opposed to the expected 59% CAGR of active multiscreen devices.
“While STBs will continue to represent a large market for US cable companies, over the long term, multiscreen device access increasingly will become the core metric that determines the scale of operators’ coverage,” explained Tom Morrod, senior principal analyst, TV Technology, for IHS. “To cash in on this trend, operators need digital rights management (DRM) technology and a compelling user interface (UI) that can be ported across multiple devices. The US cable equipment market has been rife with news and rumours of corporate acquisitions and sales—all of which point to a shift in emphasis away from STB hardware and toward multiscreen software and services.”
Yet the analyst also cautioned that the multiscreen world cannot simply be understood in terms of the hardware balance—traditional STB and connected consumer electronics devices—that operators strike. In this world, it asserts, software is key, and security that can tie together broadcast and broadband content streams is vital to maintaining value. Software and security solutions, specifically for managing conditional access (CA) and DRM interchanges safely, become more complex as operators begin to support viewing on multiple devices, rather than purely within the preconfigured STB environment with fixed middleware and CA.
Addressing the issue as to whether STBS will simply fade away over time, IHS noted that one way or another, devices in the home need to be provisioned with a broadcast stream—whether or not it’s delivered as IP over an operator’s network infrastructure. The devices also must be capable of amalgamating other IP content. That left a clear vision of the STB being relegated to the role of an optional but cost-effective extra, and serving as the entry point for a broadcast stream. Any device within a home network would then use an operator’s software platform, together with its own direct Internet connection, to create the complete user experience and UI.