According to Decipher, an
influential emerging media consultancy for the TV industry, there are “two
parallel and competitive strands to ‘connectivity’ innovation in TV: the
emerging ‘smart’ environments on connected TV screens and the ecosystems being
built around the connected set top box.” However, as it currently stands,
connected set top boxes are successfully fighting off the Smart TV threat. According to Decipher’s FutureMedia 2013
analysis, when looking at comparative rates of usage where consumers had both a
connected set top box and a smart TV in the same installation, 73% favored the
set top box.
In the long-term, however, we do not expect this trend to continue. As cloud computing and Over-The-Top content (OTT) applications continue to flourish, we can expect smart TV technology to become more dominant, eventually eliminating the need for an additional device. Currently, set top boxes only exist to serve three purposes. First, they encrypt cable content, since televisions are not equipped to view this content in its raw form. Second, they serve as computing hubs, enabling a host of interactive features. Third, they support Video on Demand by means of two-way communication. Initially, given the competitive nature of the consumer electronics industry, manufacturers were opposed to building this expensive functionality directly into television sets. However, as DVR technology continues to become more commonplace, streamlined and established, we can expect smart TVs of the future with native DVR functionality, especially given the inevitability of technological convergence. In summary, it is reasonable to expect the set top box to become an increasingly archaic and redundant piece of equipment.
Furthermore, in accordance with this school of thought, several major cable companies are not bullish on the future of the set top box either. As revealed by Glenn Britt, CEO of Time Warner Cable, in a personal and exclusive interview with me, “We want to get rid of our set top boxes altogether. They are expensive, clunky and mandate a high level of customer service. Consumers don’t need to be locked in to using our device or program guide.”
Indeed, we are already seeing a sharp increase in Smart TV sales. According to a report by market research firm IHS iSuppli, smart TV sales rose 27% in the year 2012. By 2015, the report anticipates that smart TVs will comprise 55% of all global shipments with 141 million units sold.
We are already seeing the early signs of this nascent industry start to congeal in the far reaches of Silicon Valley. Microsoft is starting to tie its Kinect architecture into televisions using technology that is not too far removed from the Xbox One. We anticipate an entry from Apple as well, beautifully integrated with their devices and the iTunes store.
The concept of smart TVs is still evolving, and currently both proprietary and open-source software frameworks are being developed for commercial purposes. Also, there are varying digital distribution platforms, with some smart TVs equipped with the ability to run applications. Depending on the trajectory this technological revolution takes, we might well see a whole new plethora of apps directly integrated into app-enabled smart TVs.
In the long-term, however, we do not expect this trend to continue. As cloud computing and Over-The-Top content (OTT) applications continue to flourish, we can expect smart TV technology to become more dominant, eventually eliminating the need for an additional device. Currently, set top boxes only exist to serve three purposes. First, they encrypt cable content, since televisions are not equipped to view this content in its raw form. Second, they serve as computing hubs, enabling a host of interactive features. Third, they support Video on Demand by means of two-way communication. Initially, given the competitive nature of the consumer electronics industry, manufacturers were opposed to building this expensive functionality directly into television sets. However, as DVR technology continues to become more commonplace, streamlined and established, we can expect smart TVs of the future with native DVR functionality, especially given the inevitability of technological convergence. In summary, it is reasonable to expect the set top box to become an increasingly archaic and redundant piece of equipment.
Furthermore, in accordance with this school of thought, several major cable companies are not bullish on the future of the set top box either. As revealed by Glenn Britt, CEO of Time Warner Cable, in a personal and exclusive interview with me, “We want to get rid of our set top boxes altogether. They are expensive, clunky and mandate a high level of customer service. Consumers don’t need to be locked in to using our device or program guide.”
Indeed, we are already seeing a sharp increase in Smart TV sales. According to a report by market research firm IHS iSuppli, smart TV sales rose 27% in the year 2012. By 2015, the report anticipates that smart TVs will comprise 55% of all global shipments with 141 million units sold.
We are already seeing the early signs of this nascent industry start to congeal in the far reaches of Silicon Valley. Microsoft is starting to tie its Kinect architecture into televisions using technology that is not too far removed from the Xbox One. We anticipate an entry from Apple as well, beautifully integrated with their devices and the iTunes store.
The concept of smart TVs is still evolving, and currently both proprietary and open-source software frameworks are being developed for commercial purposes. Also, there are varying digital distribution platforms, with some smart TVs equipped with the ability to run applications. Depending on the trajectory this technological revolution takes, we might well see a whole new plethora of apps directly integrated into app-enabled smart TVs.
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