Set-top boxes and PVRs – Clever boxes

For a long time, the VCR was the box that sat under the living room television set. Then came the DVD recorder, but both products are being eclipsed by two other product groups – the digital set-top box and the Personal Video Recorder (PVR). These not only offer more choice (around 40 channels via Freeview compared with a handful for analogue services) but also new ways of programming, viewing and storing TV broadcasts.
But if there is one thing many consumers need when they go into a store to purchase a set-top box or a PVR these days, it’s guidance. This is because there are a now a bewildering range of options (not to mention names and jargon) for these devices. There’s the bog standard Freeview box (with some now selling for around £25 each), Freeview boxes with enhanced offerings, such as an eight-day EPG or extra services like Top Up TV and Setanta sport channels; Freeview Playback Digital Television Recorders (DTRs), DVD recorders which also include a hard drive and a Freeview tuner; Freesat set-top boxes which can offer standard or high definition pictures, not to mention Freesat PVRs. In other words, independents are well placed to offer the specialist knowledge needed to help customers decide what product best suits their needs.
Clarifying the picture
Martin Dalgleish, Pace’s head of retail in the UK says: “There has been some general confusion about what a PVR or DVR (Digital Video Recorder) is. It is easy to forget the years it took people to embrace the VCR. The various Philips Video cassette types coupled with the fight between Betamax and VHS meant that it took many years for one system to win. During this time customers were being educated about what a VCR was. PVRs and DVRs have just the same issue. In fact, the choice of name and the additional confusion of analogue switch-off make the whole area very confusing for many people.”
Dalgleish adds that take-up was not helped by the fact that: “The products themselves are also less than perfect. Many look like co-joined technologies rather than integrated easy-to-use products. They were produced because it was possible, not because they were specifically wanted.” But the latest generation of set-top boxes and PVRs are much improved and some initiatives, like the Freeview Playback specification and logo, have helped standardise features and functionality. Even so, Dalgleish is concerned that: “The fact that you can still buy a DVR fitted with an analogue TV tuner seems to be totally wrong. The customer is buying something in the belief that it frees him from some analogue switch off problem but in fact has just bought into another version of the same issue.” Pace, which recently purchased Philips’ set-top box operations, is planning a re-launch into the retail sector and promises to bring a new range of products.
The take-up of PVRs by consumers was initially slow, as Graham North, Humax’s commercial director, explains: “Initially, the transition of consumers moving from VCRs to PVRs was not quick at all, primarily because understanding of PVR technology and the features available has been limited.  This wasn’t helped by the reputation of the PVR as being difficult to program and use for recordings. However, we are now witnessing strong and rapid growth in sales of PVRs as consumer understanding of the platform increases and demand for services such as live pause and series recording rises.  Another factor for the steady rise in sales is, of course, the analogue switch-off.  The digital switchover is set to gather momentum in 2009 and this will be a key driver to consumer uptake of PVRs.”
The benefits
Sales of set-top boxes and PVR sales have been helped by the fact that they can offer features that are unavailable on a VCR or even most DVD recorders, as Humax’s North explains: “High quality features are helping to drive sales for PVRs in particular.  Freeview Playback, series recording and large storage capacity on current models means that consumers have digital home entertainment at their fingertips.  The launch of Freesat will see a revival in the STB market, as consumers at last have access to free HD programming and sales of the Humax Foxsat-HD set-top box have been phenomenal since the launch of the Freesat service on the 6 May.”
The success of the Sky+ PVR (more than 3.3 million households now have at least one Sky+ box) has helped to raise the profile of PVRs and educate consumers on their benefits. The ability to pause live TV broadcasts, plan your week’s viewing and recording, record a whole series at the touch of a button and record programmes by simply selecting them from an EPG, has transformed the way millions of people now use their TV sets. Little wonder that the Freeview Playback specification offers similar features, with some products also offering split recording (if a film, for example, is split into two parts, with a news programme transmitted between them, the PVR will automatically record both parts and ignore the news).
Retail opportunities
The set-top box/PVR market gives retailers a good opportunity to sell-up. With the average household having three or four TV sets and the roll-out of digital television services across the UK, consumers will need to upgrade many of their TV sets. The chances are that the only set in the household with an integrated digital tuner, will be the main living room set. The perfect companion for such a set is a PVR. However, for other sets around the home, a low-cost set-top box could be the solution. That said, there is always the opportunity to offer consumers a second or even third PVR for even more recording flexibility.
So are most consumers opting for a basic set-top box or are they going for more advanced options? “It is fair to say that the Top Up TV DTRs have taken a strong share of the market and this is mainly down to very aggressive pricing,” says Humax’s North, “however, the market is growing fast and there are many consumers that do not want to tie themselves into a subscription model and so we are still enjoying strong sales on our PVR9200TB, and we expect the sales of our new products to do even better, with enhanced features taking them ahead of the field.”
Some set-top boxes are combined with DVD recorders, such as Panasonic’s DMR-EZ28 and Samsung’s DVD-SH871M. The latter includes a DVD recorder, Freeview tuner and 160GB hard drive that can store up to 246 hours of programmes. But Humax’s North believes that hard disk storage will become the dominant storage medium for TV programmes: “There are some consumers who will want to archive their programmes, and although there is a place in the market for DVD and PVR combis, particularly for movie fans, hard drive storage is where the future of digital recording lies.  Digital archiving is a growing trend, with capacity constantly increasing, reducing the requirement for additional storage media. The new Humax PVR-9300T for example, which launches in July, will offer a 320GB hard disk drive.”
The new Freesat boxes start from £50 with HD versions commanding a fair premium. Initially, production of these boxes is limited to three companies – Alba (which is marketing them under the Goodmans, Grundig and Bush brands), Panasonic and Humax, although more manufacturers are expected to offer products in the future. At present, much of the sales focus is on multiples and department stores with some selected independents also selling the boxes. No surprise that this strategy has produced a number of disgruntled murmurings amongst the independent trade, who rightly feel that this type of product is ideal for independents who can offer much expertise. A Freesat spokeswoman told IER that, despite reports to the contrary, independents were very much part of the company’s strategy.
Things to come
On a brighter note, a number of new features and developments are in the pipeline, which should encourage consumers to trade up and also add value to the market. “New features under development include Ethernet and USB ports, which will equip boxes with the capability to support exciting new broadband services, which could include iPlayer, the BBC’s media delivery software, and other similar types of services,” notes North. We are also likely to see a greater convergence between set-top boxes and PCs, although Pace’s Dalgleish notes that: “What is needed is a product that addresses all the requirements at one time. A truly convergent product that makes life easy, that’s what you need.  The connectivity issue will only be addressed once a totally convergent product is available. Up until then, connectivity will be limited to single actions or small functionality increases. Customers want more, they don’t know it yet, but they do!”
Humax’s North adds that when it comes to connectivity to a PC: “Today, the features available on the USB are very limited, but as next generation products come along, the features will grow, allowing more interactivity with the PC and peripheral devices. The convergence between set-top boxes, PVRs and PCs is exciting, but it’s important that PVRs retain their two big advantages over a home PC – their simplicity and reliability.