The Future of Set-Top Boxes: Extinction or Rebirth?

The Future of Set-Top Boxes: Extinction or Rebirth?Set-top boxes, a fixture for decades, will they continue to exist or face extinction? This is a question worth exploring, especially in the wake of the upcoming launch of "all-in-one" televisions. How will this affect the development of set-top boxes? The Case for Longevity: Clash of Technological Upgrades and Market DemandTelevisions, as durable consumer goods, boast a long lifespan

The Future of Set-Top Boxes: Extinction or Rebirth?

Set-top boxes, a fixture for decades, will they continue to exist or face extinction? This is a question worth exploring, especially in the wake of the upcoming launch of "all-in-one" televisions. How will this affect the development of set-top boxes?

The Case for Longevity: Clash of Technological Upgrades and Market Demand

Televisions, as durable consumer goods, boast a long lifespan. However, market-driven technological advancements are accelerating. Television technology undergoes iterations every 3 years or so, transitioning from standard TVs to smart TVs and now to AI TVs, continuously evolving service methods. Meanwhile, the television display screen is still in its prime, meaning that set-top box upgrades can breathe life into older TVs.

Following a 3-year technological upgrade cycle, within a TV's 7-10 year lifespan, 2-3 set-top boxes would be needed. Newer set-top boxes offer more robust features. As the central TV hub, set-top boxes are inexpensive to upgrade, making them a prevalent option for older TV owners.

More importantly, MiniPCs are emerging as a new type of set-top box. Three major video streaming platforms, catering to older television viewers, are directly selling VIP memberships while also actively developing their own set-top boxes, promoting higher-end models. Apple is even collaborating with Mobile to bring AppleTV set-top boxes to the Chinese market, transplanting the division of labor model between networks and terminals to the online television service sector. Smartphones can also be transformed into high-performance network set-top boxes.

Set-top boxes will blend with devices like PCs and smartphones, blurring boundaries and becoming a long-lasting consumer electronics product.

Furthermore, China imposes policy restrictions on accessing over-the-top (OTT) live broadcasts on smart TVs. If televisions lack cable TV and IPTV set-top box capabilities, viewers will need to rely on set-top boxes to access stable, comprehensive live television programs. The same phenomenon is observed even in the United States.

Given that CRT televisions from 20 years ago are still in use, it's conceivable that today's televisions could remain in use 20 years from now, as LCD screens have a longer lifespan than cathode ray tubes. Set-top boxes will be crucial in extending the life of televisions 20 years from now.

Additionally, the combined number of set-top boxes used by Chinese telecom operators and broadcasting operators exceeds 500 million. Assuming a 5-year lifespan, annual maintenance and replacement alone require 100 million set-top boxes. If cable television re-embraces its core role in broadcasting and upgrades to a full-fiber ultra-high definition broadcasting network utilizing 4096QAM for cost-effective transmission of high-standard 4K TV channels, all televisions will necessitate external DVBC2 fiber set-top boxes, ensuring the continued existence of set-top boxes.

The Case for a Short Lifespan: Technological Iteration and Evolving Consumption Habits

Modern televisions are already smart TVs, equipped with sufficient processing power for tasks like live streaming, video playback, voice interaction, and basic gaming. It's difficult to discern a need for external set-top box upgrades within the television's lifespan.

Using set-top boxes involves complex wiring, and providers often bundle them with numerous on-demand services and advertisements, creating a frustrating user experience. This leads to common complaints of difficulties in accessing television content, unnecessary frustration, and bundled fees.

Set-top box sales are demonstrably declining. The four major operators have over 500 million television subscribers, exceeding the total number of households in China. The market is heavily saturated. As people's viewing habits shift toward internet-based content, an increasing number of elderly individuals are opting for short videos over traditional television. This trend leads to a growing number of set-top box returns and a decline in new set-top box purchases by operators.

A large number of used IPTV set-top boxes flood the secondary market, becoming a source of materials for set-top box dismantling. For operators, the set-top boxes are essentially fixed assets, and their profitability increases with longer usage durations. They lack the motivation to upgrade fixed assets, leading to stagnant set-top box technology and hindering the advancement of network transmission technology standards. This ultimately results in outdated production capacity overtaken by the internet.

Furthermore, operators promote IPTV to market their broadband services. IPTV has fulfilled its historical mission. Operators are transitioning to higher-yield network + cloud computing upgrades, known as computational networks. Changes in viewing habits will drive increased data usage, making computational networks more profitable than IPTV. This will dampen operators' enthusiasm for investing in IPTV set-top boxes.

It's safe to say that the future of IPTV mirrors the trajectory of cable television. The decline of IPTV set-top boxes is inevitable. This is determined by the path dependency of bundled set-top box development in cable television and IPTV, a strategy that opposes human nature, ultimately leading to a dead end.

Set-top boxes can be likened to newspapers, serving as intermediaries between individuals and visual information. Examining the fate of newspapers reveals the future of set-top boxes. Today, set-top boxes have become entry points for smart TV interfaces. The information industry's direction emphasizes reducing the number of information-access intermediaries. Set-top boxes are among those intermediaries slated for reduction.

Even more significantly, television sales are declining year over year. If people are not even turning on their TVs, what need is there for set-top boxes? The decline of set-top boxes is inevitable.

The Future of Set-Top Boxes: A Game of Multifaceted Markets and Policy Orientation

The arguments for set-top box longevity and their demise represent two extremes, each with its own validity. However, reality is not so straightforward. What will the future of the set-top box market hold?

Predicting the future of set-top boxes, particularly when considering time as a dimension, can quickly exceed our judgmental capabilities. A person's needs today may drastically differ from their needs three years from now. Policies three years from now may also differ from today's policies.

Market demand is diverse, with some individuals willing to spend hundreds of thousands of yuan on the latest televisions, while others opt for using old TVs with inexpensive set-top boxes. The existence of set-top boxes hinges on market demand, technological innovation, and public policy.

For instance, the government's promotion of integrated televisions and set-top boxes to enhance television viewing convenience raises questions about the purpose of the incorporated set-top box functionality. Is it meant for basic public services, commercial services, or a combination of both? Different policy orientations will shape the trajectory of set-top box development. We will analyze this aspect.

Opportunities and Challenges of "Integrated Televisions": Dual-Driven by Market Forces and Technological Upgrades

Network set-top boxes are consumer electronics products that can be marketed nationwide, aligning with policies promoting the trade-in of old goods for new. If they are not eliminated by smart TVs, they have the potential to drive technological progress.

Other IPTV and broadcasting set-top boxes fall under the category of fixed assets for operators. The longer these assets are used, the higher their operating revenue. Operators lack the motivation to upgrade these fixed assets, leading to slow technological updates and hindering the advancement of network transmission technology standards. This results in outdated production capacity, vulnerable to obsolescence in the internet age.

In this context, promoting integrated televisions and set-top boxes, transforming cable TV and IPTV terminals into marketable consumer electronics products, and leveraging national trade-in policies for old goods could establish a network and terminal market division mechanism for upgrades and renewals, similar to the mobile telecommunications industry.

This approach, based on a unified national market, would simultaneously synchronize high-definition and ultra-high definition set-top box technology standards, leading to economies of scale and addressing the immediate demand for broadcasting set-top boxes, particularly the need for high-definition set-top boxes in the wake of standard-definition TV channel closures.

Therefore, promoting integrated televisions and set-top boxes is a comprehensive strategy that addresses both current and long-term needs, invigorating the broadcasting television terminal market. A thriving broadcasting television terminal market naturally boosts the broadcasting network's dissemination power, forming a network effect between networks and terminals, ultimately propelling the healthy development of the broadcasting television industry.

Conclusion: The Future of Set-Top Boxes Depends on the Collaborative Influence of Markets, Technology, and Policy

The fate of set-top boxes in the future will depend on the combined influence of market demand, technological innovation, and public policy. Ultimately, their longevity or extinction will be determined by the natural selection forces of the market and technology.

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