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Three Stages to the Pay-TV STB Evolution

Consumer interest in advanced TV features will transform the set-top box into a complete service platform that integrates entertainment, information, communications, and commerce-related applications, according to Parks Associates. They believe that the worldwide evolution of the set-top box will include three stages.

At stage one, TV viewers will demand features and services that enhance their TV-watching experience, such as high-definition capability, TV recording, and enriched TV programming. At stage two, applications that help consumers better access information and easily bridge PC-based digital media into the living room will become popular. At stage three, communications, commerce, and personalized applications and services, such as caller ID on TV, recommendations, and TV shopping, will find wider acceptance among consumers, transforming the set-top box into a home service platform.

"Service providers and their set-top box partners can follow this roadmap in formulating service offerings and hardware strategies going forward," said Harry Wang, research analyst at Parks Associates. "Very soon the number of applications for the set-top box will increase dramatically, and providers must understand the dynamics of this market in order to offer the services that most appeal to their subscribers."

Although the three-tiered interest structure is consistent across the twelve countries surveyed in Parks Associates' Global Digital Living(TM) project, country- and platform-specific differences still exist.

For instance, 66 percent of the French satellite TV subscribers are very or extremely interested in viewing digital photos on the TV, compared with only 20 percent among the U.S. satellite TV viewers.

Fifty-two percent of the Taiwanese digital cable users are very or extremely interested in TV-based commerce applications, versus 12 percent among the Japanese digital cable subscribers.

"Players in the global pay-TV market must take heed of these similarities and differences in order to fine-tune the set-top features for complete user satisfaction," Wang said.

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