The year 2012 may well be remembered as a tipping point for OTT, but paradoxically it may also go down as the year when the traditional broadcast industry regained faith in its continued existence. This has come with the reaffirmation of live TV boosted in fact by social media creating live buzz and interest around numerous shows such as X Factor. This is having the effect of restoring confidence among all those whose livelihoods revolve around linear or live TV, from broadcasting executives to brands and advertising agencies. OTT and social TV are now a big part of the story, but linear and live TV have recaptured their place in the centre.
This could finally put to bed the long running saga of the set-top box death. Not everybody has succumbed to the myth of the disappearing set-top box, least of all Nigel Walley, managing director of UK digital media consultancy Decipher, who has persistently argued that the big screen in the living room will remain the major draw for premium programming content and will suck OTT and on-demand content into its orbit.
He returned to this favorite theme in a recent blog, arguing that far from going away, the set-top box will actually rise in status over the next few years, albeit armed with ever-greater PVR capability and of course Internet connectivity. Walley recognizes that broadcast delivery will move to the cloud, but points out this will make no difference to the commercial reality that premium content owners will insist on secure platforms within the home to protect against piracy, while operators will need robust revenue protection.
Walleyâ€™s particular focus is on the UK, and here he predicts that the traffic generated by the BBC iPlayer, the major source of online TV there, will migrate to pay TV services such as Sky, which will deliver more of it than iOS devices. He even suggests that iPlayer itself will be overtaken by resurgent PVRs, citing as evidence cable TV operator Virgin Mediaâ€™s success with its hybrid TiVo box, which has had a bigger impact on time shifted viewing of recorded content than on catch up TV. It has boosted usage of the PVR.
Walley received further evidence for his case with the recent acquisition of the Motorola Home set-top box business by the Arris Group for $2.35 billion in cash and stock. The fact of the sale itself changed nothing, since Google had acquired Motorola Home for its patents and had put the company up for sale never having been interested in set-top boxes. So somebody was going to buy it, but the fact the price was near the top end of the $1.5 billion to $2.5 billion range cited by analysts, and that Arris was the buyer, rather than Pace, Technicolor or one of the other candidates, was highly significant.
Arris specializes in cable TV transmission, even if it now talks about being a convergent IP company, and so by being prepared to spend that much on Motorola Mobility, it has sent a huge message to the industry that there is a lot of mileage yet to be had from set top boxes for traditional broadcast services, enabling OTT and TV Everywhere.
After seeing many vendors focus on OTT and retail devices for the last few years, it seems that that hype is subsiding. More and more vendors are openly supporting Walleyâ€™s view. They include Broadpeak, the French CDN vendor that recently launched the nanoCDN. This new product will breathe a new lease of life into existing multicast networks and the operator installed CPE at the end of the copper line, including the STB.
Meanwhile the big STB vendors like Echostar, Pace and ADB remain as committed as ever to the future of STB-centric thick-client architectures. This is to be expected, but there are also more recently emerging vendors of set-top box software working with the major System on Chip vendors aiming to provide hardware choice for operators with a platform that can cover all the angles in the emerging multiscreen era.
One of them is the French company SoftAtHome, a provider of software for the digital home, with a strategy of partnering with hardware and System on Chip (SoC) vendors that develop set-top-boxes, covering diverse requirements but all with a focus on secure delivery of flexible and robust services. SoftAtHome is hardware agnostic and works with any manufacturer addressing the fast emerging smart home market, in which TV will play a pivotal role.
By broadening the focus to the whole of the digital home, these companies help broadcasters and pay TV providers evolve their services around the STB and home Gateway into new areas of the smart home, while keeping the traditional TV at the centre of their offering.