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Pay TV operators key to future of STBs

June 16, 2014 20.45 Europe/London By Broadband TV News Correspondent

orange_TV_set-topPay TV Operators are at the top of the set-top box food chain, with hardware OEMs and semiconductor vendors both functioning in a supporting role, according to ABI Research.

The largest operators are responsible for the functional definition and direction, and have significant ownership over at least the logical layers of the implementation. Multi-source supply agreements, in which operators purchase functionally equivalent units from multiple vendors, are the norm today. Therefore, operators have multiple bids whenever they need to purchase new units.

“The current large-scale pay TV operators we are seeing, including Comcast-Time Warner, AT&T-DirecTV, and Liberty Global’s acquisition of Virgin Media and Ziggo, will in the long-term better align set-top box requirements across larger markets,” noted ABI Research practice director Sam Rosen.

“Hybrid set-top boxes, which leverage cable or satellite as well as IP capabilities, have largely become the norm in mature markets – but will be more important from a service delivery perspective especially as the result of the AT&T-DirecTV merger.” ADB Global and Netgem, two European OEMs collectively responsible for only 3% of the market, are two vendors who have led truly multi-network boxes.

RDK, a joint venture of Comcast, Time Warner and Liberty Global, is developing a shared source operating system for set-top boxes. “Similar to the impact of Android in the smartphone market, RDK will improve compatibility between different hardware boxes and even down to the set-top box chipset level,” continued Rosen.

“While today’s set-top box market is highly fragmented, these common platforms will enable efficiencies leading both consolidation through further mergers and acquisitions, but will also force some natural consolidation.”

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Filed Under: Newsline, Research Tagged With: ABI Research, Comcast, Liberty Global, RDK, Time Warner Edited: June 17, 2014 08:48

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