With fast broadband connections, and the addition of TiVo-like personal video recorder capabilities, video-on-demand and networked links to other devices throughout the house, the set-top box could become a new kind of home-entertainment center, according to the report by analysts at Allied Business Intelligence, a consulting firm based in Oyster Bay, N.Y.
Already, about one in eight set-top boxes sold last year had built-in PVR abilities. By 2008, the report says, that number should rise to nearly 70% of all set-top boxes shipped.
The technology race will force cable and satellite providers to devise new kinds of money-generating services. And at least initially, the cost of the technology will increase substantially. A cable-system operator could see the cost of a fully integrated box, with all the bells and whistles, hit $600-$1,000, compared to just $250 for a plain-vanilla box.