Will the TV ever replace the STB?

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Despite ongoing predictions of cord cutting/shaving, STBs still securely deliver pay-TV content into the majority of homes. But TVs are becoming smarter by the day and device manufacturers would rather sell a new TV than a “cheap” STB. This is not new, but will this year be the one when the big screen wants a bigger role?

What would it take? 
In essence the TV would need to take over all of the duties performed by the STB. Internet connected ‘Smart’ TVs would need to include CA and an EPG capability as a minimum requirement. Preferably also a recommendation engine and PVR that would cover both linear and OTT transmitted content. So would this be done via a “Dongle” or integrated directly to the TV itself?

Does it make sense? 
TV manufacturers will try to support both options. In fact, a few years ago Irdeto and Samsung supplied a dongle approach to a customer. It’s definitely one way to do it, but is it the best?

To be blunt, the dongle is really just a miniaturized STB. From a pay-TV operator perspective, they still have the logistics cost of shipping the dongle itself. And if the security relies on old school hardware – not using software CA – the same logistical and security challenges are present. There’s also a possibility that the dongle approach will be superseded by the next CI+ USB version. For which there’s already an existing standard to work with, no need to spend years developing a new one.

Integrating the capability directly into the TV would certainly be a more effective and secure approach. The embedded chips could be updated over-the-air, reducing security risks. And the extra logistics costs are removed.

For both options, TV manufacturers have additional cost. There’s extra technology in the TV set and for the dongle – a USB interface has to be added to the TV as well as the chip. And for an embedded solution a License Authority Service will be required to enable the chip for a specific operator.

Will it take off? 
Some TV manufacturers are certainly supporting it, probably to increase their razor thin margins and gain market share.

What about pay-TV operators? I can imagine that for retail pay-TV operators the integrated approach could work. A sticker on the TV screen: “pay-TV operator ready!” is a win/win. For the others? That’s harder to predict. They would effectively lose control of the platform; no longer own the HDMI 1 and have little to no say in how the user interface is managed.

My prediction is that the STB will continue to morph into a smaller, cheaper and more capable device and will dominate the traditional pay-TV space for the foreseeable future. But, with the changing viewing habits we need to focus on how to integrate the mobile 2nd screen into the pay-TV services.