The death of Set-top-boxes?

There was an article posted recently by Forbes Magazine:

Did Microsoft Just kill the cable set-top-box

Basically the gist of it is:

Microsoft this morning announced announced a new set of video services for Xbox Live, including the ability to watch certain programming both live and on demand from paid TV service providersComcast and Verizon, among other sources. While there are a host of other content providers mentioned in the announcement, and the content offered via Comcast Xfinity and Verizon FiOS over Xbox isn’t the full set you can get with a traditional set-top box, the move would appear to set the stage for the eventual elimination of the Motorola and Cisco cable boxes that litter American living rooms.

BTIG analyst Richard Greenfield writes in a blog post today that the prospect of a box-less future for multichannel video providers like Comcast far outweigh the risks.  “Transforming television into an IP-based “app” increases the need for a fatter (higher ARPU) broadband pipe, playing into cable’s competitive advantage, significantly reduces capital expenditures and at the same time dramatically improves the user interface/navigation of [the cable provider’s] programming.”

Compare navigating cable content with a traditional remote control to surfing around with voice commands and hand gestures using Xbox – which would you rather to?

The set-top box isn’t going away any time soon, mind you, but the need for the device is gradually fading. As demand for the boxes crumbles, it would be very bad, indeed, for the two companies that dominate the U.S. set-top box business. One of those is Motorola Mobility, which of course has agreed to be acquired by Google for $12.5 billion; this would appear to be Larry Page’s problem now. The other leading player is Cisco, thanks to its $6.9 billion acquisition of Scientific Atlanta in 2005.

And let’s not forget this: consumers are likely to embrace the idea that they can reduce the stack of boxes sitting near their TVs: One less set-top box? Who wouldn’t be in favor of that?”


So this is how it works, eh?  Google buys Motorola, and has now entry into the TV market.  Which could eliminate the set-top-box all together.  Microsoft, instead of buying out or creating their own set-top-box, use their existing xbox, and their xbox Live service which then integrates with the MSOs, to distribute not only on-demand programming, but now, live programming as well.  Is that what Google is hoping to do as well, with GoogleTV?  Eliminate the STB, or rather make a scaled down version of the STB, have viewers pay for internet access and use internet to watch television programming (on-demand or live content)?  Will people pay for a GoogleService? 

I’m not sure exactly how XboxLive will work exactly w/ the live tv content.  Will that require to pay for both XboxLive and cable/satellite, or will XboxLive create a “package” where you buy not only Xbox Live for games, but also include TV service, which then paid off to the Cable / Satellite corps?

Does it make sense for the MSOs to partner with internet distributed companies, like Google and Microsoft?  It’s unknown, but based on the article, the demand for STBs are declining.  But that’s probably because more and more people are now using Netflix and Hulu, on either their laptop, tablet or have it as part of the SmartTVs.

Xbox has kinect, google does not have a voice activated version of GoogleTV, but it only makes sense they will implement a newer version of GoogleTV hardware, especially, w/ how google voice seems to run really well on the android platform.  That’s where I think the Motorola purchase comes in.  GoogleTV w/ motorola hardware, makes a very nice marriage.  I can see some nice synergetic applications of google running in one box.  Google Talk, Voice, Gmail, Chrome, etc…running on GoogleTV Moto device.  Get a call to your google voice, which can be routed to your GoogleTV.  Possibly talk through the GoogleTV device.  Hell, for those on Google Talk, they’d either IM you or do google video chat, all on your TV.  Pause the show, or while show is going you both watch it.  Hell, w/ Google+, use hangouts as well as “automatic check-ins” to shows to your google+ page.  Surf while watching TV content right next to each other.  Check or get alerted to emails / text messages right on your TV.  Stream tv content from googleTV, right to your android device. 

The same can be applied to Microsoft Xbox with Skype. IE explorer, Windows Live Messenger/Skype.  And for check-ins, well why not to Facebook?  MS already has like 10% interest in them.  Use Facebook as the social aspect.  We already see a very close tie-in between XboxLive users and Facebool.  Streaming from XboxLive from TV to your mobile device or tablet, something similar to sling.  And let’s not forget about the games.  The possibilities are endless.

It’s interesting, if Google and Microsoft can get into distributing live content, and have the ability to stream to your Win/Android device, this could potentially kill Apple.  Apple has the AppleTV, but so far, they haven’t been able to work w/ the MSOs to distribute live content.  Who knows, had Steve Jobs not been afflicted cancer, he could have worked his Mojo w/ the MSO’s and distribution production companies like he did w/ the record labels.  It’s a strong possibility, that we could all have AppleTVs by our TVs, and using our iPhone or iPad to control it and watch from appleTV on our TV or our IOS device.  Who knows, maybe Tim Cook, might still be able to pull this off.

I know I rambled on a bit with this, and some of my thoughts are scattered, but I think you’re getting the jist of what I’m trying to point out.  Everyone thinks the MSOs will be a dying breed, but in reality, unless Google / MS / Apple decide to start becoming like MSOs and paying networks to play live content, the MSOs will still be around.  But if the MSOs are really smart, they’ll partner with Google, Microsoft, and Apple instead of being afraid of them.  But the MSOs should really fear the networks partnering with them.  The moment that happens, the MSOs will be nothing more than isps.  And they could die out, at the rate these LTE networks are cropping up w/ the Wireless telecoms.


About ansonism

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