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Boxee's Ronen: The DVR Is Dying

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
3/4/2010
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SAN FRANCISCO -- The TV of Tomorrow Show -- Some may believe that Boxee CEO Avner Ronen is out to kill cable and its subscription video distribution business model. They might be wrong. From the sounds of it, he'd rather stick a dagger in the heart of the DVR... if it's not there already.

"DVR is dead," Ronen proclaimed here on Wednesday during a keynote panel focused on broadband video that also featured Ian Blaine, CEO of Comcast Corp. (Nasdaq: CMCSA, CMCSK)-owned thePlatform Inc. , and Mark Garner, senior vice president of distribution, marketing and business and development, A&E Television.

Ronen then back peddled just a bit: "It's not dead... It's dying."

Time will tell if Ronen's prognostication will ring true, but his point was that traditional DVR products are on shaky ground as gobs of TV shows and movies make their way to the proverbial "cloud" and are served up by over-the-top service providers or by new broadband-fed "TV Everywhere" products that MSOs, telcos, and satellite TV companies are starting to use to help defend their traditional video subscription models.

Cablevision Systems Corp. (NYSE: CVC)'s already offering Ronen his canary in the coalmine. The New York-based MSO is getting ready to launch its network-based DVR service in April, and last week said it intends to stop buying set-top-based DVRs by the end of this year. (See Cablevision Preps Network DVR, WiFi Phone.)

But home-side DVR products continue to evolve. Ronen's comments came just one day after TiVo Inc. (Nasdaq: TIVO) announced its new "Premiere" DVR line in New York, and two days after Arris Group Inc. (Nasdaq: ARRS) started selling a three-tuner "Moxi" box. Although those products are still considered DVRs at their core, their integrated broadband capabilities, fancy navigation systems, apps, and connections to Web video partners make those products far more versatile and powerful than the crusty DVRs of yesteryear. (See Arris Hawks Three-Tuner Moxi Box, TiVo Building tru2way Version of New Interface, and New TiVo DVRs Built for Web & Cable Content.)

And seeing more video become available online is just fine with Boxee, of course, as it gets ready to bring its own Internet-connected box to market. (See Ronen: Boxee Isn't a Cable Killer and Boxee Urges TV Nets to 'Experiment'.)

Although the Boxee box will offer access to a trove of cool apps and broadband video, still missing from the puzzle is access to broadcast and other premium video delivered by cable. It could fill that gap by developing a device with CableCARD slots and tru2way capabilities, but don't expect the company to sort through that ball of snakes anytime soon.

In a brief conversation with Light Reading Cable, Ronen said Boxee has some interest in tru2way, but it's got plenty on its plate already as it tries to execute on its current strategy. "It's an issue of priority for us," he said.

Others on the panel said over-the-top (OTT) video and MSO-authenticated TV Everywhere models should be able to live together in harmony. (See Comcast's 'Xfinity' Goes Live , Avail-TVN Readies 'TV Everywhere' Platform, and Dish Slings Its 'TV Everywhere' Strategy.)

"Both are evolving at the same time and aren't mutually exclusive," said thePlatform's Blaine, noting that the libraries between the two will remain different for some time because it's unlikely that programmers will allow all their "premium" content to be fed over-the-top using ad-supported or pay-per-view distribution models. OTT is growing fast, "but I don't see it as a replacement for subscription TV and TV Everywhere," he added.

Although Boxee has no intention to develop a tru2way box yet, Ronen would like his box to be able to deliver content from a cable operator's TV Everywhere library. "It's more about getting them comfortable authenticating through us," Ronen said. "We just want to provide the user with as much choice as possible."

Programmers, meanwhile, will continue to be careful about how their content (and how much of it) is distributed online. "We are going to play where the money exists today," A&E's Garner said, noting that OTT has a critical mass of users, but not necessarily a critical mass of revenue support. Given that, he said programmers won't be chucking their dual revenue stream business model (ads and subscription fees) and taking their acts completely online any time soon.

As a point of emphasis Garner said Viacom Inc. (NYSE: VIA)'s decision to pull The Daily Show and other Comedy Central shows from Hulu LLC starting next week is "indicative of what the market is demonstrating in terms of monetizing online platforms." (See Daily Show, Colbert Leave Hulu.)

While that shows that the jury's still out on whether free, ad-supported Web TV business models can create a sustainable business, Garner did allow that the TV Everywhere approach should enable MSOs and programmers "to give consumers a better feel of the value they're getting" and "preserve it [the subscription TV model] longer."

— Jeff Baumgartner, Site Editor, Light Reading Cable

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