Watching the box

What does the future hold for the TV set-top box? That question is at the center of a debate that has been going on for several years now, really since before IPTV was much of a factor on the market landscape. And, it seems that whenever we come upon a potential answer to that question, something happens that challenges our view.

Internet-connected TVs integrated with more intelligent content guides already have hinted at a move away from the STB as the traditional command center for the TV viewing experience. In the age of flat-screen TVs, the very phrase "set-top box" already is a misnomer. How many STBs actually sit on top of TVs? "Set-back" boxes (an unfortunate choice of words if there ever was one) could become more common, and once the STB (or SBB?) is out of sight and out of mind, the next step for it might be getting left out of the action.

Yet, there is still the possibility that the STB could be modernized and modified with functionality that turns it into a smarter gateway to multimedia service throughout the home. Tying the STB in with a femtocell or with telephony functions could further enhance its value. And, the STB market also is getting a boost via the digital TV transition, putting more STBs in more households and in front of the eyes of more TV viewers. These factors have generally brightened the outlook for the STB market.

However, while STB advancements suggest more life in the old box, we've heard this week a new prediction that Apple could develop its own TV, and perhaps take significant market share in TVs as it did for MP3 players and mobile phones. Apple already has an Apple TV STB, and that effort has been much criticized as just another box crowding a market full of different classes of STBs with different talents, all vying for a questionable future. Perhaps a move by Apple into TVs would be all it takes to push the market away from STBs and toward more intelligent TVs.

All of these issues will no doubt lead to many interesting conversations in the coming months at trade shows like IBC 2009, ITU Telecom World 2009, Supercomm 2009, TelcoTV 2009, and finally, CES 2010. And, while it may seem a tough time to be an STB vendor, I like the attitude of one STB vendor executive I talked to recently about the future of the market, who said, "They may be smarter, or they may be dumber, [but] we will always be making set-top boxes. What you have to remember if you want to be in this market is that people don't watch their set-top boxes; they watch their TVs."