Pay-TV operators will be the primary directors of set-top box (STB) standardization and technological development, according to a new report from ABI Research, with original equipment manufacturers (OEMs) and semiconductor companies playing supporting roles.
Bigger than ever as a result of mergers and acquisitions, pay-TV operators, ABI says, “are at the top of the set-top box food chain.
“The largest operators are responsible for the functional definition and direction, and have significant ownership over at least the logical layers of the implementation. Multi-source supply agreements, in which operators purchase functionally equivalent units from multiple vendors, are the norm today.”
Set-Top Box Standardization
Recent mega mergers will drive homogenization of STBs across larger markets, according to ABI. “The current large scale pay-TV operators we are seeing, including Comcast-Time Warner, AT&T-DirecTV, and Liberty Global’s acquisition of Virgin Media and Ziggo, will in the long term better align set-top box requirements across larger markets,” Sam Rosen, ABI Research practice director, was quoted in a press release.
Rosen and ABI expect to see hybrid STBs with cable or satellite, as well as IP, connectivity playing an increasingly important role in the critical area of service delivery. As Rosen stated, “Hybrid set-top boxes…have largely become the norm in mature markets – but will be more important from a service delivery perspective especially as the result of the AT&T-DirecTV merger.”
A joint venture between Comcast, Time Warner and Liberty Global, RDK is developing a shared source operating system for STBs. “Similar to the impact of Android in the smartphone market, RDK will improve compatibility between different hardware boxes and even down to the set-top box chipset level,” Rosen commented.
“While today’s set-top box market is highly fragmented, these common platforms will enable efficiencies leading both consolidation through further mergers and acquisitions, but will also force some natural consolidation.”
