Microsoft, Cable Industry Agree On Cable-Ready PCs

As a result of the deal, cable programming could be fed directly into a PC, eliminating the need for a set-top box.
In the Microsoft deal, CableLabs is evaluating the Redmond, Wash., software maker's copy-protection technology, which will have to meet certain industry criteria. If approved in a few weeks as expected, Microsoft's Windows Media Digital Rights Management system would be the first DRM system approved by CableLabs.

Following DRM approval, Microsoft and its manufacturing partners would have to deliver a product for CableLabs certification, Dulchinos said.

Along with Microsoft, Apple Computer Inc. also has its eye on the home-entertainment market. The computer maker is pushing the Mac as a potential entertainment hub, but has yet to formally begin work with CableLabs, Dulchinos said. The Microsoft agreement took more than two years to complete.

The market for so-called “home media servers” that act as entertainment hubs is expected to show modest growth through 2008, increasing from 6 million units last year to 31 million, according to In-Stat. In 2008, two thirds of the units are expected to be consumer electronic-based, such as DVRs, with the remainder based on the PC.

Nearly half of U.S. households are expected to own DVRs in five years, as cable and satellite companies heavily market them to consumers, according to JupiterResearch. The installed base is expected to increase to 55 million households by 2010 from 7 million last year.

From the cable industry's perspective, the PC is seen as a secondary device, one that some consumers may want to use to watch television when they're away from their primary entertainment center, Dulchinos said.

"It's a secondary outlet from a cable industry perspective, but it's something people are coming to expect," he said.

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