Market Insight

Seagate adds support for Netflix

May 06, 2010

Merrick Kingston Merrick Kingston Associate Director, Research & Analysis, Digital Media & Video Technology

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US storage and hard disk (HDD) manufacturer Seagate has issued a firmware update for its FreeAgent Theater+ HDD media player that will allow the device to stream Netflix's Watch Instantly video on demand (VoD) catalogue to the TV set. Prior to the availability of new firmware, the Theater+ included a simple UPnP-based media extender which would stream content from a networked PC to the TV set, and removable physical media which could be directly synched with this same networked hardware. The Theater+ retails for roughly USD 100, and in addition to Netflix support, will stream YouTube, vTuner internet radio, and the Mediafly podcast search-and-delivery engine.

Seagate's firmware update transforms the Theater+ from a traditional media extender into a more fully-featured streaming media device. However Screen Digest does not expect this new functionality to have a significant effect on shipments; dedicated digital media boxes have struggled to gain consumer acceptance, and the Apple TV - which launched in a flurry a publicity but is still described by the company as a "hobby" - constitutes a prime example of this slow uptake. These devices do not present a crowd-out threat to the pay-TV STB space.

By contrast, devices which have piggy-backed the ability to stream media on top of other core functionality, such as gaming or Blu-ray playback, have begun to inch their way into the pay-TV space. Nor here, however, is STB crowd-out occurring. Pay-TV operators have adapted their packages to include these connected devices - with initiatives like Sky Player in the UK and Canal Plus' Foot+ in France - and in the process, have used the hardware as a means to add value for existing subscribers, and extend service reach. In the short-to-medium term, the movement of hardware manufacturers into content delivery should have little effect on the STB industry, whose shipments to pay-TV operators will continue to grow by 2.3 per cent YoY to 2014.

It is tempting, then, to see the STB and the connected device as orthogonal to one another.  However, the incursion of connected devices is important from a home networking perspective. These devices' attractiveness depends on their ability to act as nodes within the home IP network - to access content unicast across the operator's network, regardless of the content's source, and to push and pull content from within the home IP network. In this sense, their growing install base may contribute to home networking standardization, which in turn drives openness and interoperability in the STB market from which pay-TV operators more freely pick.




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