Those Sony cable boxes. C-Cube gets up grades, the volume picks up. Hmmmmmm..............................
eet.com
Sony, Cablevision partner on digital entertainment service
By Junko Yoshida and Margaret Quan
EE Times
(09/16/99, 5:51 p.m. EDT)
NEW YORK?Cablevision Systems Corp. and Sony Corp. of America said Thursday (Sept. 16) they will develop a digital platform to deliver interactive services to Cablevision customers here, beginning next summer. The deal comes on the heels of the Motorola and General Instrument merger, announced earlier this week, which also targets the interactive-television market.
The platform will consist of two versions of a digital set-top box provided by Sony and a suite of digital interactive services including interactive program guide, video-on-demand, Web-enhanced television, email, interactive game services and other programs.
Sony will provide system design and software integration including the head-end equipment and OpenCable digital set-top box components. Sony and Cablevision will collaborate on developing the digital entertainment services.
Cablevision's president and chief executive, James L. Dolan, called the partnership with Sony a "giant step forward for Cablevision" and said he expects it to be the culmination of a strategy that has been in development for the past five years. The Cablevision will spend $1 billion on 3 million Sony digital set top boxes it plans to deploy beginning next year over the period of roughly three years.
He said the digital services system offerings will go "well beyond standard cable" and said he expects this to be the last set top Cablevision rolls out. Asked about future plans for the system, Dolan and other Cablevision executives hinted that the Cablevision infrastructure could support IP telephony and Internet access services.
Cablevision has 3.4 million subscribers in parts of Brooklyn, the Bronx and Long Island, as well as New York State' Westchester, Rockland and Putnam counties. Cablevision also has customers in the Boston and Cleveland metropolitan areas.
The deal with Cablevision is the first for Sony in the digital set top market, a market the company has eyed for some time because of the large growth potential. Through the deal, Sony is expected to push a lot of its own technology agendas such as the company's home grown operating system called Aperios, the proliferation of IEEE1394 and 5C Digital Transmission Content Protection Method among cable boxes.
Will Tildebrand, Cablevision senior vice president of technology, said Cablevision will deploy two different digital set tops, one with the Sony Aperios operating system and the other with a smaller, light-weight real-time operating system he could not name. The boxes will be able to handle Java, but Tildebrand said the company hasn't chosen a middleware provider or an interactive program guide.
The first boxes will not do HDTV processing, Tildebrand said, but will pass HDTV through using either 1394 or RF. He said Sony-Cablevision will add HDTV once the HDTV specs are completed and the cost to process HDTV comes down. Tildebrand said POD is being built into the system, but he is not sure the first digital set tops to be deployed will have POD. He said the company is waiting for OpenCable specifications to be completed.
Moreover, the Cablevision deal is Sony's first big break on the U.S. cable market, which will translate into an actual business. Although Sony made a small investment in General Instrument ? holding about 5 percent of GI before Motorola/GI merger, Sony's initial intent to leverage the relationship for a quick entry into the U.S. cable set-top never panned out as planned, due to a slow roll-out of OpenCable specification-based set-tops, according to Gerry Kaufhold, principal analyst at In-Stat. "For Sony, this is the fastest way to get into a set-top deal," he said.
Analysts like InStat industry analyst Mike Paxton see the deals between Motorola and General Instrument, and between Sony and Cablevision as companies cementing retail strategies in advance of OpenCable mandate in 2000. OpenCable requires retail sales of digital set top boxes.
Describing the partnership between the two companies, Cablevision's Dolan said, "this is not a classic model of a cable TV company rolling out another set-top." Cablevision believes that the partnership with Sony "changes the nature of the relationship" between Cablevision and its customers, Dolan said.
During a conference call, Howard Stringer, chairman and chief executive officer of Sony Corp. of America, said the deal will allow Sony "to make good on a lot of promises [of digital interactive services], a lot of them made by me."
Asked if he foresaw any change in Sony's relationship with General Instrument as a result of Sony's deal with Cablevision and GI's recent merger with Motorola, Stringer said Sony will continue to be amiable with them and stand ready to help them when needed. Before the Motorola merger, through its 5 percent stake in General Instrument, Sony committed to help GI use Sony's Aperios real time operating system and HAVi (Home Audio Video Interoperability) , 1394-based home networking software.
Worldwide digital set top box shipments are projected to total 3.6 million units in 1999, growing to 4.7 million in 2000 and heading to 6.16 million in 2001, according to Cahner's InStat Group (Arizona). Set top box revenue (including analog, advanced analog and digital) is expected to top $2.5 billion in 2000. |
