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1999 Consumer Electronics Show

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PAGE 2

Cable, Retailers Must Cooperate to Push Set-tops
With cable set-top boxes about 18 months from appearing on retail shelves, manufacturers are still divided on the best form for them to take and what role they will play. Applauding the development of open standards for cable technology, which will enable multiple manufacturers and multiple software suppliers to get involved in the business, Scientific-Atlanta’s Ken Klaer said, “We believe that the future is going to be a function of services, not technology.” But Tim Lindenfelser, of integrated chip manufacturer Broadcom, disagreed. “Technology is going to enable bandwidth,” he said. “You can’t do it today unless you have the technology that can make that bandwidth available” to carry the services people want. Samsung Electronics is getting into the cable business because it believes consumers primarily want single products that can deliver multiple services—such as a Samsung TV with digital cable and Internet access built in. CableLabs’ Don Dulchinos agreed. “It’s not a product that’s a standalone product, so I really view it as a joint marketing arrangment [with retailers]. And some either formal or informal agreements need to be made,” he said. But none of the panelists were willing to assume manufacturers or cable operators will be willing to share their incremental revenues with retailers as an incentive for them to sell the boxes, as DBS services do. “I don’t think the cable MSOs are going to be overly excited about sharing that,”Lindenfelser said, noting cable operators have in the past opted to own new services or distribution channels rather than split revenues with other companies. A key question that must be answered before such a revenue-sharing deal could be made is how to install and authorize the box that is sold at retail, Dulchinos said.

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