Wednesday, January 17, 2007

HD Cable Boxes Undergoing Vast Transformation

One interesting development in the industry over the last couple of years has been the evolution of the cable box, formerly the set-top box -- although as this New York Times article points out, it's not really set on the top of anything anymore. At this year's CES, there were companies exhibiting advanced HD cable boxes than you could shake a remote at, including Motorola, Scientific-Atlanta (Cisco), TiVo, AT&T, Digeo, Akimbo and others.

The biggest shift in the cable box landscape is that you will soon be able to buy them in retail rather than leasing them from your cable provider. Whether you will think this is a good use of $800 to $1,000 remains to be seen, but several companies like those mentioned above are betting that you will. The way it will work is that you will buy the box at Circuit City, Best Buy or wherever, take it home and order a CableCard from your cable company. If you ever move or want to switch to a different provider, you don't need a new box, just a new CableCard. The cable companies charge a buck or two a month to lease these little devices.

The problem with the current generation of CableCards is that they are uni-directional, meaning that they only receive data from the cable headend rather than being able to also send data to it. Thus, advanced features like video on demand don't work. The next generation of bi-directional CableCards is being held up due to disputes between the cable companies and the consumer electronics industry. However, the federal government has mandated that by this July 1st, all cable providers must make their services interoperate with boxes from outside vendors like TiVo or Digeo, so that should hasten the process.

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