Scientific-Atlanta and General Instrument took the occasion of the cable industry's National Cable Television Association Cable '99 trade show here to show off a variety of new cable set-top boxes that are beginning to regularly follow a well-established PC industry pattern: Add more memory, more processing power, and more applications every few months.
Scientific-Atlanta (S-A), for instance, unveiled three new cable TV set-top converters that will fill out its current digital set-top lineup. At the low end, S-A is offering a lower cost version of the Explorer 2000 that still allows for interactive features such as email and Internet access but has fewer connection ports for external devices.
At the high end, the new Explorer 6000 will have more than five times as much processing power as the Explorer 2000 currently being shipped, better graphics capabilities, and will be able to run any applications developed for the Explorer 2000, an important item for cable operators, who don't want to have to create a new program for every new box that comes along.
For consumers, the prices of these TV set-top boxes vary widely. They start at around $299 for the most basic model. At the high end, set-top boxes that mimic a PC with a DVD drive and other features sell for about $1,100.
With the new boxes, cable customers will have the ability to decode a variety of high definition TV (HDTV) formats, depending on which formats the cable operators decide to send through their systems. The higher quality the format, the more processing power and memory are needed in the box, which raises cost.
Services now marketed as "digital TV" by cable companies only offer more channels for traditional, analog TVs. True digital TV, on the other hand, promises the ability to display content on souped-up TVs with greater picture quality than is possible now.
Cable operators have been slow to pass along HDTV signals, because the higher-quality signals take up more space in their "pipeline," meaning fewer revenue-generating programs can be sent through the system. Still, the news is an indication that HDTV is at least on the road map for the industry now; last year, when DTV broadcasts officially started, there seemed to be little hope that consumers would get HDTV from their cable operators.
Just as importantly, the Explorer 6000 box is being designed so that it can be sold at retail stores, which will be required by the Federal Communications Commission in July of 2000. The system is expected to go into production in the second quarter of 2000.
All told, the demand for digital TV set-top boxes has been growing rapidly, which is partly owing to the better signal quality and the electronic program guides these devices offer. S-A said the company will double its production capacity to 500,000 units per quarter by the end of 1999, up from earlier year-end estimates.
Competition from Panasonic and WebTV?
General Instrument and S-A will eventually face competition from a variety of fronts as they move to offer their systems in retail stores. One potential competitor, among many waiting in the wings, is Panasonic.
At the show, Panasonic was showing a Microsoft WebTV device that combined the Internet set-top functions of WebTV with HDTV receiver technology from Panasonic, and it also included IEEE 1394 connector ports for hooking up and controlling other audio-visual equipment such as digital camcorders, digital VHS recorders, and DVD players.
While the working prototype unit, being shown for the first time, was large and ungainly looking, the company is working to put all of the technology into a smaller box by the time the product is expected to be introduced around January 2000, based on estimates from company executives. Later versions may include a standards-based cable modem, enabling cable TV reception as well as two-way high-speed data access.
Meanwhile, General Instrument outlined plans for a network architecture that it claimed will significantly reduce the cost of rolling out video-on-demand service, a service cable operators are anxious to offer because of the new revenue opportunities it will bring them. These systems differ from pay-per-view options familiar to consumers today in that they will be able to order programs through an on-screen guide and immediately receive them, instead of at prescheduled times. Theoretically, users could also replay missed scenes, much like a VCR, although not all systems will offer that feature.
However, cable operators have been slow to offer such capabilities because the systems enabling VOD were costly. GI said that by encrypting all content first on a separate system and then putting it on a file server will cost less than previous encryption methods.