Some advanced features might not be universal when new set-tops begin arriving around July of 2000, according to a trade group executive, potentially clouding the eagerly awaited market for new cable services.
Work on the next-generation specification now appears to be centered around a basic set-top that looks a lot like the old set-top, save for an electronic programming guide that lets users sort through viewing choices more quickly. Later, the specification will detail how video-on-demand service should work on these boxes.
By focusing on this more basic box, manufacturers could still sell a device with a souped-up processor, for instance, that's capable of the full complement of interactive services, even though those services might work only in certain parts of the country. However, this takes the industry away from the goal of gaining the large economies of scale needed to make the boxes more affordable for consumers.
Cable operators are particularly anxious to have manufacturers add fancy capabilities to the set-tops in order to gain new sources of revenue, and welcome the additional benefit of avoiding the purchase cost of the new devices on their balance sheets.
Cable companies have been working diligently through their research and development arm, called CableLabs, to develop for digital set-top devices a set of hardware and software standards known as OpenCable. The goal is to establish a guideline for manufacturing a digital set-top box endowed with high-speed cable-based connections to the Internet, interactive TV, phone service, and PC-like features such email and e-commerce. Such a device could also be configured to control an entire network of home electronics, ranging from PCs to VCRs.
Ideally, consumers will buy their own boxes (instead of leasing them from the cable company) and be able to utilize them in different parts of the country--unlike today's market.
At a financial analyst briefing in Denver yesterday, Laurie Schwartz, CableLabs' vice president of advanced platforms and services, updated attendees on the status of the OpenCable initiative.
In her presentation, Schwartz said that determining how advanced features will work on a variety of operating systems and multiple processors has been difficult. Lingering uncertainty could lead to a marketing challenge for consumer electronics companies that wish to sell these devices, she noted, because what they can do could vary depending on what region of the country a person is in.
One of the key components of an interoperable set-top, Schwartz said, is a component called the POD (Point of Deployment) module, which is a PC Card that essentially acts like a key to a car's ignition. The card is given by the cable operator to a customer to insert in an OpenCable-compliant box, unlocking service.
This technology is currently embedded into set-tops, meaning that cable companies have to use set-tops with the same security technology as their central office equipment. The FCC has mandated that cable companies make these PODs available to consumers by mid-2000 in the hopes that a mass market for set-tops will materialize, but the outcome is unpredictable.
Meanwhile, electronics manufacturers are in a bit of a quandry as to what to include in a product. Some television manufacturers are looking to incorporate some set-top functions into the TV set itself--but how many?
"We don't know what happens yet" in regards to what features to include, said Gary Meyers, president of Sony's digital media division. "To avoid problems with building the wrong product into the TV, we're looking to use [IEEE 1394 interconnects]" to help link the TV with a module that can be added to do store downloaded music, for example.
Working on a solution
CableLabs is also still looking to provide a specification for a common application platform that uses Java and HTML as the language a programmer would write in. Using Java and HTML, the application is separated from the underlying operating system, making it easier for programs to be reused on other platforms.
For instance, SeaChange, a vendor of servers and software for video-on-demand services, currently has a program written in a language called C++ for the PowerTV operating system that enables a users to pause, rewind, and play a downloaded video. But the program has to be modified to work on other operating systems, which costs time and money. By writing the program in a language that runs on all set-tops, the programs can be developed faster and for less money.
Set-tops are becoming more PC-like, Schwartz said, but they have the added complexity of needing to work in a variety of network settings across the country. "A customer can't download an application and have it freeze their television," she said.
CableLabs said it expects to finish technical specifications by mid-1999, with devices going into interoperability trials by around the same time. By early 2000, the organization hopes to begin certifying set-tops as "OpenCable" compliant.
Of course, the difficulties in retailing cable set-tops for a retail environment doesn't preclude the offering of advanced services on boxes that are leased to consumers, just as they always have. A growing number of cable companies already have trial or active interactive services available.