Digeo Plans 2007 Retail Push for Moxi HD Set-tops with PVR

Digeo -- run by CEO Mike Fidler and COO Greg Gudorf, former Sony executives -- plans to showcase a product at CES and deliver one by CEDIA 2007, it said. The multituner box will be priced a few dollars either side of $1,000, Gudorf said. Digeo will “continue to maximize our cable business,” in which his company sells Moxi “solutions” to cable operators that supply Moxi set-tops to subscribers, he said. “In addition to that, we'll go direct to the market. We'll lead with the Moxi brand. We'll try to partner with others if we can. But we'll take that product directly to the consumer. Because it’s really the consumer’s choice -- whether they want their cable choice, or their satellite choice, or do they want a Moxi choice?”

The retail Moxi box, using a multistream CableCARD, will give consumers access to any cable programming they want, said Gudorf. The Moxi network will give consumers access to EPG data, interactive services and other support now available to cable subscribers leasing Moxi set-tops from cable operators, he said. The past 6-8 weeks, Motorola and Scientific-Atlanta multistream CableCARDs have been approved, he said.

Digeo believes a cable-retail “hybrid kind of model is the space to be,” Gudorf said. “It’s uniquely enabled at this point, as the industry embraces CableCARD fully.” While at Sony, Gudorf battled to persuade cable companies to deploy more CableCARDs for Sony DTVs; the situation is “different this time,” he said. He believes the FCC will hold to a July 2007 deadline for cable operators to fit set-tops with CableCARDs, he said: “They've gotten 2 stays of execution, and they've asked for it a 3rd time. Cable will have to wait and see what the FCC does. But a good bet is that the hi-def and DVR units will be required to use CableCARDs. Whether the FCC continues to force it as written on the lower-end boxes because of the economics -- different argument.”

Some CableCARD economies of scale will suffer if the FCC grants cable’s requests for waivers on low-cost set-tops of limited function, Gudorf and Fidler said. But “things will become markedly different than what they are today,” Fidler said: “If you look at the incumbent development activities, they're all developing CableCARD. Those will be deployed. Clearly, I think everybody’s in a consensus about it being applicable to the higher-level product. And cable operators in general are deploying DVRs at a faster pace. That’s going to drive a greater level of adoption, as well as a commitment to the market to support it.”

Cable has been “woefully inadequate” in backing CableCARD for DTVs, Fidler said. That deprived CE makers of the chance to realize their dream of nationwide portability for digital cable-ready TVs, he said. “For us, the value propagation is that we can expose this product to consumers,” Fidler said: “Right now, it’s a hidden exposure for the cable operator.” Ultimately, Digeo sees the technology being deployed not only in a Moxi box for retail distribution, but also spreading to broader uses, Fidler said.

Unidirectional CableCARD in a standard TV set “had lots and lots of problems,” Gudorf said, adding that a reluctant cable embraced it only under FCC mandate, he said. The other big CableCARD problem was its inability to support EPG data found in standard leased cable set-tops. A 2nd drag was lack of VoD or pay-per-view functionality, but “the big killer” was EPG, Gudorf said. “Obviously, we can deliver the EPG and the other interactive services independent of the CableCARD. So even today’s unidirectional CableCARD that’s available for a TV set would plug into a box concept like this with an IP pipe for all the service deliveries, and you've got a pretty cool solution -- except that it’s a single tuner. And that'll stop you dead.”

Of 400,000 Moxi set-tops that cable operators have deployed, 10,000 or so have MoxiMate companion boxes for multiroom control, Gudorf said. “Anything I can do in the main room, I can do in the secondary room,” he said: “Most of the multiroom solutions today have some restrictions in what you can do in that 2nd room. You can’t pause live TV. You can’t schedule recordings. You can play back SD recordings. But you can’t play back HD recordings. We allow you to play back your HD recordings because we downrez it to SD to deliver it to the 2nd room.”

The main set-top has multiple tuners and a hard drive that can support multiple simultaneous feeds, so there’s no “conflict” if household members want to watch different TV programs or watch DVDs from the built-in drive at the same time, Gudorf said: “All of that can be happening at once. That’s the power of the box and the power of the software structure that we have.” Moxi’s 2nd-room approach carries a very low cost, Gudorf said. Cable operators pay about $80 for the companion box; most charge customers an extra $10 monthly for 2nd-room capability, he said: “With the next generation, as we move to retail, we'll make sure that that can be a HD solution for the 2nd room. Not just the 2nd room, but we'll make sure your 3rd and your 4th room can have those same capabilities.” It will be a marketing decision as to whether Moxi bundles a companion box with the set-top sold at retail or merchandises it as a step-up option, Fidler said.

“It’s absolutely critical” that the Moxi box reach market with an optical drive built in, much as today’s Moxi set-top has an onboard DVD player, Gudorf said. When we asked whether Digeo will use a Blu-ray or HD DVD drive, Gudorf said: “We're not making a product announcement today, but it would certainly make sense to address the right things when it comes time to put an optical drive in.” It’s “still an open issue” whether the box is marketed under the Moxi brand or an established CE label, Gudorf said: “We're fully prepared to introduce it under the Moxi name if that’s what it takes to help seed that market and drive it forward.” Fidler said “the goal is to develop partnerships that help us deliver the solutions to market.”

Most IPTV service providers are trying to move to HD from standard-definition, but “our job is the opposite” -- getting Moxi’s HD platform to run on lower-cost applications, Gudorf said. In the spring, Digeo successfully applied a Moxi user interface to a Samsung TV, he said: “We think we've made pretty good progress trying to take the essence of our user interface and move it down into less expensive hardware. The IPTV world is moving up, and the 2 are going to meet real soon.” The Samsung product was designed for cable operators, not for retail, but “for a variety of reasons, that product is not going forward,” Gudorf said. Pricing and timing made the Samsung “not a product to continue with,” he said: “We'd love to continue to work with Samsung. We think there’s some pretty interesting consumer potential to work with Samsung, but we're not currently pushing a product forward with Samsung.”