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The Future of TV Is... Wait, Where Are the Apps?

Mari Silbey
4/18/2016
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The FCC's "Unlock the Box" initiative got an attention boost last week with President Barack Obama voicing his support for greater competition in the TV set-top box market. However, the pay-TV industry isn't giving any ground on this debate, and instead continues to push hard through the Future of TV Coalition for an alternative solution that would bring pay-TV services to new devices through an apps-based approach.

Service providers and groups like the National Cable & Telecommunications Association (NCTA) argue that apps are already here today and that apps are making it easier even now for consumers to watch TV without a set-top. The government should get out of the way.

There's just one problem with that argument. The industry has a terrible track record with pay-TV apps.

There are two issues under debate with the Unlock the Box proposal. One is how to make pay-TV services accessible on more boxes. This is the issue that continues to grab headlines because proponents of Unlock the Box cite hefty monthly fees that consumers have to pay today to lease their set-tops from a service provider. The second is whether pay-TV providers should be required to unbundle video streams from their proprietary user interface guides so that competitors can create their own UI experiences without becoming content providers themselves. (See Before the FCC Vote: Set-Top Fight Redux.)

It's the latter issue that the pay-TV industry is really afraid of. But because service providers haven't effectively addressed the first issue, they're now in hot water over the second.


For more on TV technology trends, check out our dedicated video services content channel here on Light Reading.


Despite all of the rhetoric from Unlock the Box proponents, service providers aren't terribly wedded to the leased set-top model. Set-tops are a cost center as well as a revenue driver, and if it were easy to move away from the model, many pay-TV providers probably would have done it long ago.

That said, service providers have had the means to move to an apps-based approach for several years now for TV delivery. And they've largely sat on their hands.

NCTA CEO Michael Powell shows a mock-up of what an implementation of the FCC's Unlock the Box proposal might look like.
NCTA CEO Michael Powell shows a mock-up of what an implementation of the FCC's Unlock the Box proposal might look like.

We've heard time and time again that apps are "the future of TV." Tim Cook may have been the first one to use that line, but traditional pay-TV operators are the ones repeating it with a vengeance. At a recent NCTA press conference, President & CEO Michael Powell not only talked about how apps are the future, but also how they are present and functioning today. He mocked the Unlock the Box proposal as an idea without proof of execution, while saying that TV apps that are accessible on multiple retail boxes are already available.

To demonstrate his point, Powell showed off the Time Warner Cable app on a Roku box. However, the TWC feed wasn't a local one. The NCTA had to get permission to stream in a feed from out of market because Time Warner Cable Inc. (NYSE: TWC) doesn't operate in the Washington DC area where the press conference was held. In fact, as far as I know, no service provider in the DC area offers an app for the Roku platform, the Apple TV, the Chromecast or any other smart TV device.

Sure, pay-TV apps are "deployed" and "real" today, but only from a couple of providers in select markets. Time Warner Cable laudably launched its Roku app back in 2013. More than two and a half years later, Charter Communications Inc. followed through with its Spectrum app in the fall of 2015 -- after the Unlock the Box proposal was first unveiled as a possibility. (See Charter Parks Its App on Roku.)

Other operators could have and should have followed Time Warner Cable's lead. But they didn't. If they really believed apps were the future of TV, why didn't they make that future happen before the FCC applied pressure? The industry's had years to make that vision a reality, and yet it's made very limited progress.

Now, instead of just dealing with the set-top issue, pay-TV providers are faced with the much scarier prospect of potentially having to unbundle their video streams and lose control of the TV UI.

You might almost say they've boxed themselves in.

Now if only somebody had a key.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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jstuckle
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jstuckle,
User Rank: Light Beer
4/29/2016 | 1:20:32 PM
Re: It's about time
Ah, how I wish we could do the same.  But we like sports, baseball in particular.  MLB games are blacked out on the internet in the home area, which means here in D.C. we can only watch those Nationals and Orioles games shown on broadcast TV - which amounts to about a half dozen a year.  We also watch a lot of Capitals and Wizards games, and although I could be wrong, I don't think all of those are available on the internet, either - and definitely not on local broadcast TV.

So to get what we want, we have two choices - cable or satellite.  And neither is very attractive.  But if there were a way to get rid of cable and still watch our favorite teams, you can be sure we'd do it.
kq4ym
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kq4ym,
User Rank: Light Sabre
4/29/2016 | 10:30:48 AM
Re: It's about time
The failure of cable companies is my area to unbundle channels and force the rental of a box, make me decide to cut the cable years ago. Now, it's so simple to use a Roku and get nearly all my needs from free channels. Of course I still need to factor in the cost of my internet connection but I've saved thousands over the last few years in monthly fees and I suspect there's many more that are going that direction in coming years.
jstuckle
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jstuckle,
User Rank: Light Beer
4/23/2016 | 12:13:45 PM
It's about time

Mari, I think you miss the real reason cable providers are against this idea.  STB's are a great income to them.  Our Verizon FIOS boxes cost about $10/mo. for a box that should retail for less than $100.  That's paid for in just a year.  And the $200 DVRs are $20/mo.  After a year, it's all profit - other than the cost of the ink (and maybe an extra sheet of paper) to print the bill each month (even printed bills are going away in favor of electronic billing).  Don't kid yourself - the RMR is a tremendous profit center for the cable companies.  Plus, we need 4 cable boxes - one for each TV - for my wife and I, even though we can only watch at most two at one time.


This is no different than the phone companies back in the early 190's and before, when you had to rent your phone and pay for each extension in your house.  The Ma Bell monopoly was broken up, and now we have a much greater selection of phones and features than ever before (agreed, some of that is due to technology advances - but it's also due to competition).

It's time for the cable companies to join the 21st century and allow compeition.
jbtombes
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jbtombes,
User Rank: Light Sabre
4/19/2016 | 4:44:21 PM
Re: One consumer's example
Mari - Isn't the "content that you've paid for" really just viewing rights limited by the contracts that the service provider has struck with the studios or networks? As Cisco's Ken Morse said in that 2011 interview with Jeff B, the difference between managed and unmanaged endpoint diminishes by the year, but for the time being content providers - esp premium tier - guard their brand and negotiate that concern into those deals. When the new app or third-party box acts up, who does the network - or consumer, for that matter - call for repair?
KBode
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KBode,
User Rank: Light Sabre
4/19/2016 | 4:18:23 PM
Re: One consumer's example
I tend to feel the same way about the set top box effort by the FCC. Seems like given that traditional QAM cable over coaxial will die ultimately anyway, so the FCC should focus its regulatory attention on broadband competition. 

HOWEVER, I do find the cable industry's hystrionics about how "big tech" and Google are "stealing their content" and hurting diversity hysterical. These companies do realize they're the least liked in the COUNTRY and that people don't believe these arguments in defense of a $21 billion captive market, right?
Duh!
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Duh!,
User Rank: Blogger
4/19/2016 | 2:13:18 PM
Re: One consumer's example
"In the long term, we shall all be dead".  A lot of people will be on MPVD platforms for a very long time.  Particularly elderly, rural and less educated people. 
jbtombes
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jbtombes,
User Rank: Light Sabre
4/19/2016 | 12:51:57 PM
Re: One consumer's example
Long-term, it goes away. That's also what one Cisco tech exec said in 2011 - four years before selling off that business unit to Technicolor. http://www.lightreading.com/cisco-set-tops-are-going-away/v/d-id/704441
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/18/2016 | 11:50:20 PM
Re: One consumer's example
msilbey - OK, you sold me. Sounds like a good deal!
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
4/18/2016 | 11:47:49 PM
Re: One consumer's example
Thanks for the tip about OTA TV. I need to look into options for recording it. And cable is just so darn convenient..... 
steve q
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steve q,
User Rank: Light Sabre
4/18/2016 | 9:45:34 PM
Re: One consumer's example
Hi will you see verizon be in this move, will there new idea of g90 be there answer. But after winning the hearts of Boston they are pushing out of the fois and putting in there new mobile services. Verizon stop provide a app for the Samsung and Xbox 360 yhat could have push new ides.
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