Personal video recorders stepping out in set-top style

Aug 13, 2001  •  Post A Comment

Personal video recorders may finally be coming into their own, thanks to an expected union with set-top boxes in coming years.
So far, PVRs have yet to gain much traction, due in part to consumer confusion surrounding the product. According to Statistical Research Inc., 0.8 percent of homes indicated they owned a PVR in a spring survey. However, the actual figure is probably closer to 0.4 percent, said David Tice, SRI’s director of client services. The discrepancy arises because people often confuse PVRs with camcorders or their regular cable service, he said.
Integrating PVR functionality into a set-top box is essential to the expected explosion of the PVR category over the next few years, said Morgan Guenther, senior vice president for business development and revenue opportunities with TiVo in San Jose, Calif. “There’s a natural migration for PVRs from a stand-alone platform to an integrated set-top platform,” he said, since the combination lowers the cost for those operating the service.
While boxes with PVRs aren’t available yet in the commercial market, set-top manufacturers are eagerly refining their products to enable PVR functionality, touted by many as the key differentiator on the next-generation boxes.
Mark DePietro, vice president of marketing and system engineering for DigiCable in Motorola’s Broadband Communication Sector, said home networking and increased processing and memory capabilities will be available on the 5000 line of Motorola’s DCT set-top boxes, with PVR capability integrated into the DCT5200 and DCT52X0 platforms. The 5000 line also includes an integrated cable modem. However, widespread availability of these boxes is at least a few years away, he said.
Current boxes do enable some level of interactivity, Mr. DePietro said. Applications such as e-mail, t-commerce, some video on demand and simple games such as solitaire and poker are possible on the current boxes. Insight Communications, for instance, uses the DCT2000 to offer VOD and local news, weather, sports and information.
Motorola says 16 million of its digital set-top boxes have made their way into customers’ hands since the company introduced them in late 1996. That means Motorola commands about 65 percent of the total set-top box market, with its current generation of boxes accounting for about 15 million of those boxes and its 5000 line adding up to fewer than 1 million.
Scientific-Atlanta, the other major player in the set-top box market in the United States, has shipped nearly 7 million of its Explorer 2100/3100 class units in North America since 1997. That line of set-tops enables not only digital cable but also VOD, e-mail, chat, messaging, some Web browsing and walled garden functionality, said Bob Van Orden, S-A’s vice president of product strategy for subscriber networks. The Explorer 4100 contains all those services and also incorporates a DOCSIS cable modem, which means the box can connect to printers, PCs and other devices. The line should begin shipping later this year.
The top-of-the-line Explorer is the 8000 model, which includes PVR functionality, “the No. 1 driver (of next-generation set-tops),” said Mr. Van Orden. Time Warner has purchased 100,000 of those boxes, and S-A intends to begin shipping them at the end of this year.
While Motorola and S-A rule the set-top roost, a number of other manufacturers are beginning to gain a foothold. Sony, for instance, has been chosen by Cablevision Systems Corp. to provide set-top boxes when the operator launches digital service at the end of September. AOL Time Warner recently announced a partnership with Samsung to develop AOL TV set-top boxes that include TiVo’s PVR functionality, and Pioneer recently unveiled plans for PVR-enabled set-top models.
Pace, Europe’s largest supplier of set-top boxes, has contracts with Time Warner and Comcast to roll out its boxes in the United States. Pace has shipped more than 7 million digital set-top boxes in Europe since 1996 and has a contract with Time Warner to deliver 750,000 boxes beginning later this year, said David Novak, director of marketing for Pace Micro Technology Americas in Boca Raton, Fla.
The Pace boxes selected by Time Warner can run Power TV, movies on demand, Internet, e-mail, chat and t-commerce. In addition, the box uses a single-chip solution, making it faster and about 50 percent smaller than a typical set-top, Mr. Novak said. British Sky Broadcasting plans to launch a Pace box this fall that includes PVR functionality as well.
The overall set-top market looks promising. According to SRI, about 38 percent of TV households had a set-top box as of this spring. Nearly half of “cable plus” homes-those with more than broadcast-only reception-had one.
Jim Stroud, analyst at The Carmel Group in Carmel, Calif., said, “Once we see interactive TV can be successful on that level, we will see a higher level of deployment of interactivity [on next-generation boxes].”
Mr. Stroud believes that as cable operators implement a planned expansion of the capabilities of the current boxes, demand will increase for the next-generation boxes within 12 to 18 months.