Cable providers, manufacturers see set-top boxes as next media frontier May 4, 2005 12:00am Source: The Atlanta Journal-Constitution May 3--The lowly set-top box, that unassuming plastic block that connects your television to your cable company, is about to become much, much more. With cable facing competition from satellite and telephone companies, computer makers and others, set-top boxes are being redesigned to unlock a host of new services, making them more like home computers than simple conduits for the latest episode of "Desperate Housewives" or reruns of "Gilligan's Island." Just about every major cable company and set-top box maker is hawking new devices with built-in digital video recorders that can record television shows, pause them, skip through commercials and let other cable-connected televisions in the house replay them at any time. But that's just the beginning of what tomorrow's cable and satellite set-top boxes will be able to do. Scientific-Atlanta is planning later this year to release boxes that come with writeable DVD drives. Those will let users not only watch DVD movies they might rent or own, but also record television programs on DVDs that they can take with them to view on laptop computers or in-car DVD systems. The Lawrenceville-based company also is working on new boxes that will come with hard drives and built-in broadband modems that cable companies can use to sell all sorts of new home services -- from television access to the Internet to interactive gaming and videoconferencing. With features like those, "they really start to resemble a PC in many ways," said Scientific-Atlanta Vice President Dave Davies. Other boxes that the nation's No. 2 set-top box maker hopes to introduce by early next year will connect directly to an existing PC, allowing consumers to "stream" digital photographs, music or home movies directly to a TV set, Davies said. "We see the set-top fundamentally transforming in a very exciting way -- sort of like the same way the cellphone transformed from just a device used to make phone calls to something you can also use to surf the Internet or take pictures," Davies said. Rival Motorola Inc., the biggest maker of set-top boxes, is taking the idea of cellphones and remote controls a step further. Motorola, which is based in Illinois, is working on devices designed to let customers connect to their set-top boxes with Motorola-powered cellphones or office computers. The idea is that they could do everything from scan TV programming to monitor their homes using wirelessly connected cameras and sensors. "For us, it's not just a set-top box," said Motorola spokesman Paul Alfieri. "This is a powerful broadband pipe into your home. We want to figure out how (consumers) can get the most out of it." Another indication of where set-top boxes are going now that they can be equipped with DVRs and hard drives comes from Digeo Inc., a Kirkland, Wash.-based set-top box software company backed by Microsoft Corp. co-founder Paul Allen. Digeo is rolling out technology that lets users store and access pictures, home movies and music right on their set-top box. Users of Digeo's Moxi technology can play built-in video games with their remote controls. And if they also subscribe to Voice-over-Internet phone service, they can even screen phone calls using a caller ID feature on their TV set. Samsung Electronics Co. plans to begin marketing high-tech boxes with Digeo's software this fall. "What's happening with cable boxes is that they're becoming more and more like home media centers," said Mike Paxton, Arizona-based senior analyst at In-Stat, a technology research company. "They're much more important now than they were, say, six or seven years ago." What's driving the move toward high-tech set-top boxes? Cable and satellite companies are facing increasing competition from telephone companies such as SBC Corp. and Atlanta-based BellSouth, which are starting to sell television service along with wired and wireless phone service. Also in the wings are PC makers, with new "media center" PCs that can play and record movies, television, music and more. And then there are television makers themselves, which are starting to include "cable card" slots that allow viewers to receive digital cable or high-definition TV without a set-top box. Also driving the trend is the fact that cable companies have spent billions upgrading their lines in recent years to offer new services. Now they need the hardware at the end of those lines to sell new fee-based services and recoup their investments. "The set-top has moved from basically a terminal that allows you to receive more channels to an applications platform," Scientific-Atlanta Chairman Jim McDonald told financial analysts at a meeting in Atlanta in February. "Clearly the opportunity going forward is to build a platform on advanced devices and systems that deliver services for the next five to 10 years." Cable companies are certainly seeing some success with the latest incarnation of the set-top box -- those that come with built-in DVRs. TiVo Inc. pioneered the DVR market, but in just two years cable and satellite companies have come to dominate it. Scientific-Atlanta, for instance, sold about 1.1 million DVR units in its last fiscal year, which ended in June. Since then, DVR sales have more than doubled. A potential damper to the growth of high-tech set-top boxes, however, is their price. The most advanced boxes can cost cable operators several hundred dollars each -- money they need to get back from customers. Still, it may be easier to persuade a consumer to pay a few dollars extra each month to rent a feature-filled cable or satellite box than spend thousands for a PC that still may not work with TV sets and other electronics, said John Barrett, an analyst at the Dallas-based technology research company Parks Associates. Also, Barrett added, consumers typically would rather get their technology and entertainment from a single source than to cobble together different technologies themselves. "If they're going to do it, they're going to call a service provider ... who for $100 a month can give them Internet access, telephony, games, movies, DVRs, home security and this and that," Barrett said. "And if it doesn't work, there's one provider they can call" to fix it. <<Atlanta Journal-Constitution, The (KRT) -- 05/04/05>> << Copyright ©2005 The Atlanta Journal-Constitution >> ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.