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Report: Little Interest in Paying for Networked Set-Top Box

4 Aug, 2009 By: Erik Gruenwedel

Most consumers don’t want to pay to link their cable boxes to the Web, according to a new report.

Less than 10% of broadband households in the United States would be willing to pay from $3 to $6 per month to link their cable set-top box devices to the Internet.

However, Parks Associates said about 33% of U.S. broadband homes are interested in networked set-top boxes, which the Dallas-based research firm said would result in increased demand for interactive and personalized TV services and would push annual worldwide set-top box shipments over 200 million by 2013.

“While less than 10% are willing to pay a monthly fee, demand is still on an upward trend, especially as the set-top connects to more and more services,” said Jayant Dasari, research analyst with Parks.

Parks said the global digital TV transition and new distribution channels such as DTT (TV channels using digital signals delivered via conventional antennae), IPTV, and the so-called over-the-top video services or services repurposing content across multiple platforms, will intensify competition in the television service market.

Over-the-top services include efforts by cable companies and others to repurpose content across multiple platforms.

The report said carriers and manufacturers looking for a competitive advantage will replace their current installed base of set-tops with advanced models capable of supporting applications such as time- and place-shifting and Internet-based offerings.

With the set-top box connected to a variety of sources, it would expand the battle in the television services market to the entire digital home, affecting every service sector from energy management and security to voice and video, according to Parks.

Separately, Dan Rayburn, principal analyst with Frost & Sullivan, questioned budding business models from Comcast, Time Warner Cable and others regarding “On Demand Online,” where consumers can access repurposed content across multiple Web-enabled platforms for an additional fee.

“Why do content owners think consumers are going to pay for the same piece of content over and over, simply to be able to consume it on different devices?” Rayburn asked in a note.

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