WASHINGTON—Set-top boxes will soon be saving even more energy than in recent years thanks to an extension of an agreement between the Consumer Technology Association and the NCTA—The Internet & Television Association (NCTA).

The “Voluntary Agreement for Ongoing Improvement to the Energy Efficiency of Set-Top Boxes” agreement, which was initially signed in 2012, has been extended through 2025. As part of the agreement, new and stronger energy-efficient commitments will be put in place starting in 2019.

At the end of 2019, CTA reports that the agreement has saved consumers $7 billion in energy costs and avoided 39 million metric tons of CO2 emissions. By the end of these extended terms, it is projected that the total energy uses by set-top boxes in the U.S. will be only a third of the energy used by set-top boxes in 2012.

This latest extension of the agreement places emphasis on IP set-top boxes. The maximum power levels for IP non-DVR set-top boxes will be cut by an average of 43% from 2021 levels, per CTA. The Natural Resources Defense Council, NRDC, estimates the new set-top boxes that will be rolled out in 2023 will use around 20% less energy, what it calls “great incremental progress.”

“The ongoing incremental energy efficiency improvements by the pay-TV industry and set-top box manufacturers translate to a very satisfying trifecta—reduced energy use, avoided carbon emissions and lower customer utility bills,” said Noah Horowitz, senior scientist at NRDC. “Going forward, we anticipate many customers will be able to get rid of their set-top boxes entirely and access content directly through an app installed on their TV, which will lead to even greater savings.”

Multichannel pay-TV providers, manufacturers and energy efficiency advocates are signatories of the agreement. This includes AT&T/DirecTV, Comcast, Charter, Dish, Verizon, Cox, Altice, Frontier, CommScope, Technicolor, NRDC and the American Council for an Energy-Efficient Economy. CableLabs also aids with research and developing the energy efficiency strategies.

“The phenomenal progress we’ve seen in energy and cost reduction due to this voluntary agreement is a testament to what can be accomplished through private sector initiative and collaboration,” said Doug Johnson, vice president of technology policy, CTA. “We applaud the signatory companies for their commitments and engineering accomplishments, the energy efficiency advocates for their contributions and oversight, and the policymaking community for giving us the time and space to develop, launch and expand this agreement.”

NEW YORK—There are a few best practices when it comes to integrating set-top box (STB) and Smart TV data, according to a new study from the Coalition for Innovative Media Measurement (CIMM).

The research aimed to assess the strengths and weaknesses of Smart TV and STB data and identify best practices for combining them at the household level. CIMM describes both datasets as complementary and believes the combination can help create a granular nationally representative data sets for linear and streaming TV programming and advertising.

CIMM enlisted Pre-Meditated Media and Janus Strategy and Insights to conduct the study, which was done in two phases. The first phase reviewed Smart TV ACR and STB providers to collect a general understanding of the approach of each. This included general applications, sample sizes, data capturing and reporting and data processing rules.

The second phase reviewed the existing methods for integrating Smart TV ACR and STB providers, like matching methods and co-mingled processing of viewing data. The two phases were combined to identify best practices, which resulted in identifying five stages.

Stage One is best practices for data set selection. This includes utilizing STB data sets that span multiple traditional/virtual MVPDs and Smart TV ACR data providers to ensure representativeness of viewer footprint and amplification of complementary measurement priorities of both data collection techniques; as well as recognize diversity of household TV access on tuning behaviors that reflect changing landscape of TV viewing and apply consistent definition and sample inclusion of over-the-air, pay-TV and broadband-only homes.

Stage Two is on establishing match and commingling design, which calls for the use of tuning data from homes with STB-to-Smart TV ACR device matches to inform calibration of combined data set estimates, including un-matched homes. This results in three core cells: STB only, STB/Smart TV ACR and Smart TV ACR only.

Stage Three represents match execution, calling for the deployment of a high quality matching agent, able to match on postal and IP addresses; leverage HH device graph for representation of OTA, pay-TV and broadband-only homes; validate match process; and ask IP match provider questions regarding quality of data records, such as recency, churn rate, deterministic vs. probabilistic, life span, etc.

Stage Four deals with the best practices for calibration and weighting. This addresses key calibrations made to data sets, like STB adjustments to Smart TV ACR (number of sets in home, DVR/VOD, backfill reference for ACR signature library) and Smart TV ACR to STB (CTV access, set-on/set off, on-screen ad exposure). It also calls for applying weights to four benchmark cells: U.S. demographics, TV access universe, tuning metrics and geographics.

The final stage, Stage Five, covers validation, which entails validating universe and turning estimates.

“The feedback we have received in our research bodes well for the future development of granular Set Top Box/Smart TV ACR data sets that support advanced targeting and placement optimization on linear TV,” said Howard Shimmel, president, Janus Strategy and Insights.  “What we are seeing is that Integration processes are maturing, enabling more flexibility and potential for standardization; STB and Smart TV ACR data formats already possess some similarities; there is a degree of consistency in metadata already occurring and experimentation is accelerating.  All that suggests that the path to integration is taking shape. Our hope is that with the findings of this report that providers will begin to implement the best practices outlined.”

CIMM will provide more detail on the report during the CIMM Cross-Platform Video Measurement & Data Summit taking place on Feb. 3 & 4.

For more information, visit www.cimm-us.org.  

LONDON—Though seemingly competitors, pay-TV and Netflix have generated a relationship that sees the streaming giant accessible through pay-TV subscribers’ set-top boxes in more than 300 million households worldwide.

Based on a study by Ampere Analysis, Netflix has more than 100 major partnership deals with pay-TV providers, which Ampere says gives them theoretical access to almost half of all global pay-TV subscribers outside of China.

Netflix is most prevalent on set-top boxes in the U.S., as 86% of pay-TV subscribers could access Netflix on their operator’s set-top box at the end of 2018. At the same time, Netflix had agreements with Western Europe pay-TV operators to reach about three quarters of the region’s pay-TV subscribers.

These are the two main areas for Netflix, as its reach in other global regions—Central and South America, Asia Pacific and Central and Eastern Europe—pales in comparison. Ampere estimates that Netflix has about 40 million subscribers in these regions out of 400 million pay-TV subscriptions. Ampere does note that Netflix is attempting to build out in those regions.

“The increase in number of pay-TV partnerships with Netflix marks a distinct shift in the industry, as more and more of the streaming giant’s traditional ‘enemies’ cosy up through onboarding deals,” said Elinor Clark, analyst at Ampere.

“Of course, Netflix is not the only beneficiary,” Clark continued. “These partnerships can also be lucrative for pay-TV operators, providing them with additional revenue stream when there may be downward pressure on their average revenue per user and, in some markets, cord cutting.”

The full report is available through Ampere Analysis.

BOSTON—There’s a lot of good content in what has been called the golden age of television, and viewers are discovering new and sometimes classic shows frequently. How they discover them has changed in recent years, however, as online sources are becoming the go-to place rather than through traditional pay-TV set-top box, according to Hub.

In its annual “Conquering Content” study, Hub has found that online resources have not only overtaken traditional TV options for finding and viewing new shows, but that it is nearly doubling as the place for viewers to discover their new favorite shows.

In 2015, when Hub asked viewers to reveal how they found a favorite show they’ve discovered in the last year, 57% said that they did so through a set-top box either with live TV, DVR or VoD; online came in at 43%. Since then, those numbers have been trending in opposite directors, and as of 2019 the margin is the largest its ever been, with online serving as the main source for 63% of viewers, while traditional TV options were the method for just 35%.

Netflix has separated itself as the top online choice. After overtaking traditional TV for the first time in 2018, the streamer has built upon its lead and was cited as the source of new favorite shows by 34% of respondents (up from 30% in 2018). Meanwhile, in comparison, traditional TV dropped a couple of points from 25% in 2018 to 23% in 2019.

“Even if traditional TV platforms still account for the bulk of all TV viewing, online sources are now the clear go-to for consumers’ favorite shows—the shows they’re most likely to talk about with others,” said Peter Fondulas, principal at Hub and co-author of the study. “Equally notable is that Netflix, by itself, is now a stronger source of favorite shows than all linear TV networks taken together.”

More information on the study can be found at www.hubresearchllc.com. 

NEW YORK—The amount of energy consumed by the set-top boxes used to access pay TV in our homes is due to go down another 20 percent due to new commitments made by leading service providers such as Comcast, AT&T, and Dish Network. This progress is the result of a unique collaboration between the pay-TV service providers and leading environmental groups like NRDC that was signed in 2013 and just extended this week. To date, it has reduced national annual set-top box energy use by $1 billion and more savings are on the way as the older models are replaced by new, more efficient ones. 

WHY IS SET-TOP BOX ENERGY USE TRENDING DOWNWARD?

There are more than 225 million set top boxes located in U.S. households and they have a typical lifetime of around five years. These boxes enable customers to access pay TV from their cable, satellite or telephone company. Because these boxes continue to consume near full levels of power even when the user is not watching or recording a show, the energy and environmental impacts of their usage really add up. Back in 2012, America’s households were paying more than $4 billion in energy costs to operate these devices and powering them produced 24 million tons of climate-change pollution annually.

After extensive negotiations between two leading energy efficiency advocacy groups (NRDC and the American Council for an Energy-Efficient Economy, or ACEEE), and the pay-TV industry (the service providers and the leading set-top box manufacturers), a joint “Voluntary Agreement for Ongoing Improvement to the Energy Efficiency of Set-Top Boxes,” or VA for short, was signed in 2013. The core element was an industry commitment to procure more energy efficient set-top boxes. Additionally, the service providers have invested in new architectures whereby a single digital video recorder (DVR) is connected to the main television and a much lower-energy-consuming box called a thin client is installed on the other TVs in the home instead of additional DVR(s).

The VA has been extremely effective and has already saved consumers $2.1 billion and avoided almost 12 million tons of carbon dioxide (CO2) emissions through 2016. The image from the 2016 VA Annual Report shows how the national energy savings, expressed in Terawatt hours (TWh), continue to grow as the older, less-efficient models are replaced with new ones. 

MORE SAVINGS ARE COMING

This month the initial VA was extended for another four years and once the next tier of the agreement is in full effect, national set-top box energy use will be almost 40 percent lower than in 2012, saving four large, 500-megawatt, coal-burning power plants’ worth of electricity every year. That’s equal to the amount of electricity consumed each year by all the households in Chicago. Because of the agreement, annual U.S. consumer savings will grow to $1.6 billion in energy costs by 2025.

Another great development is the industry’s drive towards “apps” whereby the user can access both live and recorded programming directly on their new Smart TV without a set-top box. This has the potential to drive down national energy use and related carbon emissions even further. Consumers win by getting rid of their set-top box and the related clutter, and will save $25 to $50 per year on their electric bills, depending on the type and age of the set top box(es) in their home. The service providers benefit from not having to stock and service millions of set-top boxes and also avoid having to send all those service trucks to install them in our homes.

WHAT CAN CONSUMERS DO?

Although customers almost always obtain their set-top box from their service provider, via a rental fee or via a bundled monthly service, they do have energy-saving options when signing up as a new customer or renewing ar contract before the apps are available. These include:  

• GET RID OF OLD DVRS - Older DVRs consume a lot of power and the new ones are a lot more energy efficient. If you have two older DVRs, they would consume as much energy per year as a new medium-sized refrigerator. You can turn in the old DVRs and request a new whole-home DVR for your main TV and a "thin client" box for your second and third TVs. The Thin client receives coentn from the new DVR and only uses a small fraction of the annual energy. To better understand how the energy use of your current set top box compares to newer offerings scroll to the bottom left hand side of www.energy-efficiency.us.

• INSTALL AN APP AND DITCH THE BOX - In the near future, many of the service providers will offer you the option of installing an app on your TV that allows you to simply click on it to directly access live and recorded content on your new Smart TV without the need for a set-top box. It will be just as easy as clicking on the Netflix app on your TV or mobile device. With this new digital platform, you can stream shows and have the ability to store your recordings, like the latest Golden State Warriors basketball game or episode of Sesame Street, in the cloud for future viewing. Check periodically with your service provider to learn when this option will be available in your area.
• • If you have an older Smart TV, you might not be able to download the new app once it becomes available. In this case, you can purchase a small, low-power device such as Apple TV or one of the offerings from Roku, Google (Chromecast) or Amazon (Fire TV) and use it to access the apps. These boxes or thumb drive-sized sticks use a lot less energy than a DVR or regular set-top box, and somewhat less than a thin client.
  • In all of these scenarios, however, you will still need the gateway box that includes the modem and router for receiving and moving content around your home.

WHY A VOLUNTARY AGREEMENT FOR SET-TOP BOXES?

The set-top box market is unique because rather than buying a box, consumers get the one that the installer has on the truck. The service providers are the actual purchasers and prior to the VA, they did not pay much attention to the boxes’ energy consumption because they weren’t paying the electric bills. Due to this unique situation and massive savings opportunity, we agreed to collaborate with the industry via a voluntary agreement. For other products, NRDC remains fully supportive of minimum energy efficiency standards set by the U.S. Department of Energy or state agencies like the California Energy Commission.

National efficiency standards exist for over 60 product categories, and they are on track to provide consumers and businesses with cumulative net savings of more than $2 trillion by 2035. In fact, a typical U.S. household saves about $500 on energy bills every year thanks to efficiency standards.

Noah Horowitz is the senior scientist and director at the Center for Energy Efficiency Standards, Energy & Transportation program.

This story originally appeared on NRDC.org.

(This story was updated by the author)

VALLEY COTTAGE, N.Y.—The global set-top box (STB) market will be worth $46 billion in 10 years time, according to the latest report from Future Market Insights (FMI).

The report—"Set-top Box Market: Global Industry Analysis (2012-2016) and Opportunity Assessment (2017-2027)"—expects revenue from the STB market in Asia Pacific except Japan (APEJ) and the U.S. to collectively account for more than 55.7 percent of the global set-top box market revenue in 2017.

In the U.S., the increasing demand for 4K TV is expected to provide support to the growth of the STB market. In the APEJ region, due to the increasing penetration of TV in both rural and urban areas, the STB is set to receive a huge boost.

FMI predicts the global set-top box market to be valued at about $22.2 billion by the end of 2017, and will continue to grow at a CAGR of 7.5 percent during the period of study to reach a market valuation of around $46 billion by the end of the forecast period.

The global set-top box market is segmented on the basis of product type (cable STBs, satellite STBs, IPTV STBs and OTT devices) and by video quality (SD and HD STBs). Segmental analysis found that:

– In the year 2017, the satellite STB segment is estimated to be valued at $8.5 billion and is expected to register a CAGR of 8.1 percent during the forecast period

– The OTT devices STB segment is estimated to be valued at $3 billion in the year 2017 and is forecasted to touch a value of $3.4 billion in the year 2018, reflecting a year-on-year growth rate of 12.2 percent

– In the year 2017, the SD STB segment is estimated to be valued at $5.4 billion and is expected to register a CAGR of 5.1 percent during the assessment period

– The HD STB segment is estimated to be valued at $16.9 billion in the year 2017 and is forecasted to touch a value of $18.5 billion in the year 2018, reflecting a year-on-year growth rate of 9.7 percent

– In 2017, the US STB market is estimated to be valued at $5.7 billion and is projected to reach $9.9 billion by the end of 2027. The market in the US is expected to represent incremental opportunity of $4.2 billion between 2017 and 2027

– In 2017, the APEJ STB market is estimated to be valued at $6.7 billion and is projected to reach about $16.7 billion by the end of 2027. The market in APEJ is expected to represent incremental opportunity of $10 billion Mn between 2017 and 2027.

This story originally appeared on TVT's sister publication TVB Europe. 

PHILADELPHIA—Comcast is currently conducting employee trials for its Xi5 set-top box that supports HDR. A company official said that trials are underway in a “few markets,” though the specific sites were not revealed. Comcast debuted the Xi5 at INTX this past year, and says that it is aiming to deliver the set-top to customers at some point later this year.

To read the full story, visit TVT’s sister publication Multichannel News.

PARISAND SAN JOSE, CALIF.—After years of wrangling with investors about the future of its set top business, Cisco has announced that it is selling the division to Technicolor for $600 million in stock and cash. The deal will make Paris-based Technicolor one of the world’s largest providers of set-top boxes (also referred to as “gateways” or “customer premises equipment”), with a market share of 15 percent.

Under the terms of the agreement, upon the closing of the transaction, Cisco will receive approximately €413 million ($450 million) in cash and approximately €137 million ($150 million) in newly issued Technicolor shares, subject to certain adjustments provided for in the agreement. The deal is expected to close by the end of the year or by the first quarter of 2016.

With this acquisition, Technicolor will be shipping more than 60 million devices annually, with an installed base of 290 million set-top boxes and 185 million gateways in more than 100 countries. It is expected to generate €3 billion (approx. $3.3 billion) of pro-forma revenues in 2014, doubling Technicolor’s revenues in the Connected Home segment. Technicolor and Cisco will form a “strategic partnership” to develop and deliver new devices that will extend the two company’s platforms into additional communications devices based on IoT (Internet of Things) technology.

“The strategic relevance of video to every consumer, business, city and country around the world is only growing, and the market is moving rapidly," said John Chambers, Chairman and CEO of Cisco. “This is the right time and we have the right company in Technicolor to drive the future of the CPE business to deliver what our customers and partners need, today and into the future. At Cisco, we are prioritizing our investments to deliver on our strategy of video in the cloud, and will partner with Technicolor to position the CPE business and employees for future success.”

Technicolor’s acquisition is the latest move in an industry that has seen new entrants come and go in recent years. The market has experienced a decrease in set-top box shipments amid growing interest in cord cutting and OTT services such as Apple TV and Roku, as well as a decline in pay-TV subscriptions worldwide. Ten years ago, Cisco entered the business with the acquisition of Scientific-Atlanta, but in recent years, investors and others have complained that the division was not a good fit with Cisco's core business. Three years ago, Google acquired Motorola’s set-top box business after buying Motorola Mobility Holdings. Shortly thereafter, it sold off the STB division to ARRIS Group for $2.35 billion. In May, ARRIS Group acquired European set-top box maker Pace for $2.1 billion, making it the largest provider of pay-TV boxes in the world.