[Satellite News 09-02-10] As satellite broadcasters and operators embark on 3-D TV initiatives and platform roll-outs, set-top box vendors such as Pace, Technicolor and Amino Communications still are waiting for a stronger demand before putting more resources into the market.
    Amino CEO Andrew Burke told Satellite News that his company is focusing on more immediate next-generation demands, such as HD PVRs for pay-TV operators. “We’re not getting a lot of requests for 3-D TV coming from our customer base at the moment. We have seen 3-D TV being trailed, but you need a decent amount of bandwidth. For us, 3-D TV is interesting, and we understand how to implement it, but at the moment, the demand is not really there from our customers. We are adopting a wait-and-see approach. Currently, there is much more demand for OTT [over-the-top] capability.”
    Pace CEO Neil Gaydon also is cautious on the impact of 3-D TV, particularly as HD take-up remains in its infancy. “The penetration of HD in Europe is only around 3 percent to 4 percent. There is still a long way to go in terms of HD penetration, so wanting to jump to the next thing, when HD hasn’t been delivered to the mass market, is probably a little bit premature. That will take a while to be embraced as you have the same issues of content, and flat panel prices.”
    Gaydon admits the rise of 3-D TV has taken his company by surprise. “At IBC 2009, most stands were showing 3-D TV in the corner and it was considered exciting — but way off.  Then Avatar was released, and at the same time we started to see a consumer appetite for improved picture quality as well as a drive from the [consumer electronics] manufacturers to differentiate their TVs. So the speed of evolution has been surprising, but it is no surprise that people want better picture quality.”
    While current generation set-top boxes on the market are able to handle half-resolution 3-D TV, Gaydon said Pace’s next-generation model, which likely will be shipped around mid-2011, will provide full resolution. “Obviously 3-D TV is a lot more bandwidth hungry, so operators need to get the business models right and use technologies that will combine HD and 3-D TV, rather than run separate streams, one HD and one 3-D, as that would be prohibitively expensive for operators.”
    Vince Pizzica, senior executive vice president of strategy technology and research for Technicolor, said his company has been leveraging existing technology for 3-D TV. Technical has been encapsulating 3-D into the same HD streams that the current boxes on the market support. “Any 3-D TV connected to a HD box should be able to take a 3-D signal. There is need to accommodate the left and right eye issues associated with menus on the set-top box. That is a relatively simple firmware issue. If you have experienced 3-D on Blu-ray, you get a much richer, detailed and higher quality experience than proposed by broadcast 3-D TV today because of the coding that is used, and that would certainly require a new set-top box if we bring that to 3-D TV broadcast.”
    ABI Research senior analyst Jason Blackwell explained the set-top-box industry’s caution. “3-D has not made much of an impact on the set-top box since the HD boxes work with the frame-compatible format. 3-D could create additional demand for HD boxes if customers decide to upgrade their level of service to get the 3-D content, however, we believe there will be an increased transition to HD boxes anyway. Really, the only impact on set-top box will occur if the operators decide to change to a service-compatible format in order to broadcast 1080p 3-D content requiring an upgrade to the CPE.”
    Anna Hunt, a senior analyst at IMS Research, believes that set-top-box manufacturers eventually will be forced to keep up with the operators’ view of the market. “Over time, it is possible that operators will want to offer 3-D quality that matches Blu-ray Disc quality, therefore moving from frame compatible formats to a full 1080p resolution per eye. This will require the transition to completely new set-top boxes that can handle such a video stream. Also, the 3-D market, even in the scenario of frame-compatible formats, drives demand for more powerful HD set-top boxes.”