With plenty of Motorola corporate news circulating, this seems an appropriate time to hear from one high-level exec with significant tenure in the company. I spoke to Senior Vice President John Burke a few weeks back about the set-top business; where it is today, how it got here, and where it’s headed. Here are his answers to some of the questions I posed.
When Motorola first started developing set-tops, was there any indication of where the set-top business was headed?
When we started focusing on set-top development in the mid-1990s, it was all about the move from analog to digital television, and looking back on it, there were clear signs as to where the industry was heading. Cable, for example, could carry up to 80 channels at that point, but with the launch of satellite TV there was an even greater demand for more content, and that was the catalyst for the digital migration and for many of the innovations that have brought us to where we are today. I don’t believe, however, that we would have thought when we announced our 50 millionth digital entertainment device shipment three years ago that we would hit the 100 millionth milestone quite so quickly.
What do you consider to be the most significant set-top innovation over the years?
Hands down, it’s the DVR. The DVR (digital video recorder) changed the way people watch TV – it’s all about content on your terms. That said, there are other advancements that have also been incredibly important. The development of effective content security systems made it possible, for example, to introduce premium channels like HBO and Showtime. And multiple tuners made it possible to record one show while watching another. It was Motorola, by the way, that was the first company to bring a dual-tuner HD DVR to market. And two-way functionality brought about pay-per-view and then video-on-demand. The market just keeps accelerating the pace of innovation.
What surprises you about the set-top business in 2010?
The speed of change and innovation. The industry knows that the old TV paradigm doesn’t work anymore. The DVR showed that people want control over their TV watching experience, and that demand for control is only growing. It’s become a cliché, but consumers want access to content anytime, anywhere, and on any device. That’s a threat to the old business models, but it also creates huge opportunities.
People have predicted the death of the set-top for years. Why do you think the Motorola business has not only survived, but continued to grow?
Even 10 years ago people were talking about the death of the set-top, but the truth is that set-tops continue to evolve. One important thing to remember, however, is that the set-top is only part of an end-to-end video delivery system. From a Motorola perspective, we’ve focused on that entire delivery chain, and we’ve been very successful so far – from video encoding, to security, and transport over a wide variety of broadband networks.
New types of set-tops for over-the-top video have exploded on to the market in the past year. What do you think of this trend?
It’s just yet another example of consumer appetite for on-demand programming, and it’s why operators are looking to blend more on-demand content with traditional television offerings. For a while the industry assumed that only younger consumers were interested in new kinds of video experiences, but as we showed in our recent Media Engagement Barometer study, all generations are interested in media experiences on their own terms.
The television industry is changing rapidly. Where do you think set-tops and video delivery in general will go from here?
If the first decade of this millennium was about transitioning from the analog to the digital era, we believe this decade is defined as the Internet Era of TV. In the Internet Era it’s all about content (on your terms), community, and control. We foresee great innovation across the industry especially in video delivery over the next few years. Exciting times lay ahead.