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Tag Archives: set top box

Why it’s (almost) 2014 and you still need a set top box

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I actually had one of these!

I stumbled onto a discussion on Quora entitled “Why do we still have television set top boxes?” and as I often see, it’s full of conjecture and suspicion about the evil empire that is the pay TV industry.  While I am not specifically trying to support or vilify anyone from that industry, I thought it worthy a response that has less conspiracy theory than others.  So let’s start with some important facts:

1) Set Top Boxes (STB’s) take, on average, from day of deployment 30+ months to “break even” for a cable company2) Any tech support, home maintenance (“truck roll”), etc is costly to a cable company
3) Software updates, QA, etc are slow and costly to a cable company
4) Most north american pay TV providers now enable some form of “TV everywhere” service available by App or Browser
5) Many pay TV providers now offer same apps on Roku, Apple TV, and several smart TVs
6) Smart TV software platform updates happen 1+/year – which could easily result in incompatibility with pay TV services.  Only very recently have any of the manufacturers begun to standardize their own platforms.
7) The technology in homes is moving at an *extreme* pace, so even if a pay TV operator is moving “fast” they will still appear, relatively speaking, to be moving slowly.
7a) thinking point – Until about 5 years ago, this just wasn’t the case at at all, the pay TV providers didn’t really even need to innovate whatsoever.  So here we are 5 years later and they have APIs, multiple apps, etc – not too many industries one could point to and make a similar statement about incumbents…

I think if you add the above together, the answer should be something like this:

The pay TV industry would be happy to rid itself of STBs, but only *very recently* have viable alternatives hit the market.  Pay TV companies are very rapidly adopting these platforms, but your definition of “rapid” is radically out of whack with how an established industry moves.  Over the next few years you should expect most North American Pay TV providers to give you as a consumer multiple options for using their services in the platform of your choosing.

As a bonus:
8) CableCards *could have been* a good solution, but were way too soon to market to make the industry comfortable with them.  Ask yourself this question: if you were the person in charge of P&L on the hardware deployment business, and you knew full well that consumers will call you with any problems whatsoever, would you support some “standard” by which *other company’s hardware* was causing YOU customer service issues?  Me neither.

Is Amazon Building a Kindle Set-Top Box?

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I'm awesome at photoshop! I hope it doesn't look like this!

I’m pretty sure the headline here says it all.  Let’s review the facts (it might be worth re-reading my bit on why HBO doesn’t go direct to consumers, as many of those issues are addressed here):

  1. Amazon has a large content library. They are actively increasing it.
  2. Amazon has a content distribution platform already capable of streaming to non-PC devices.
  3. Amazon has a recurring billing relationship with consumers.
  4. Amazon has a (phenomenal) marketing and distribution channel for getting devices into consumers houses.
  5. Amazon has a strong brand in the hardware space.
  6. Amazon has the customer service & support infrastructure needed to deal with service issues.
  7. Amazon has the ability to build hardware and deal with supply chain issues.
  8. The TV services industry is huge, and Amazon wants in.

Even if they don’t plan to decouple content from Amazon Prime, making a box is a very viable, and, in my opinion, a likely move.  In addition to all of the above, it is a strong move versus Apple (and possibly Google and Microsoft too).

A $99 Amazon Kindle TV box would not surprise me this coming holiday season (how about a September launch, right in time for school?).  But then again, I occasionally get Kindle predictions wrong.

Kinda saw this one coming, didn't ya?

Oh, and one more thing.  What if they do it by acquiring Roku?  Let’s review that scenario:

  1. Roku already has something better than a minimum viable product.
  2. Amazon could skip all the work on developing a new UI/UX (regardless of your feelings on the Roku UX, it is well more than functional).
  3. Roku isn’t a sustainable business yet, enabling Amazon to purchase at a reasonable price.
  4. Roku has a team with a strong background and industry knowledge relevant to the TV/Device space.
  5. Amazon can distribute the same hardware at the same price point (which seems to fall in the not-too-profitably category), yet supplement with reliable recurring revenue.
  6. Amazon wouldn’t have to drop the Netflix service, but could slowly chip away at it from within.
  7. It’s cheaper than trying to buy Xbox from Microsoft (though that’d be quite the coup, plus nobody would even need to relocate)

I don’t really think Amazon *needs* to buy Roku, but it would probably let them fast-track a bunch of steps.  And then it could be a $49 Kindle TV, which just sounds so… right.

Speculating On Motorola + Google TV

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Googorola!

Googorola!

Google is planning to acquire Motorola Mobility, which is a deal about patents and Android, but also one to raise questions on quite a few existing product lines.  What will happen with Moto Droids and the Google Nexus line?  Where do Android tablets go from here?  Is MOTOBlur dead?   (my answers: bye bye Nexus, tbd, and yes).  The other interesting area is Google TV, particularly interesting because the Motorola Mobility dept is the one that makes the set-top boxes (which are, next to refrigerators, one of the least likely products to be mobile in my house, but maybe that’s just me).

I’ve seen tons of speculation this week about what the deal means, as it pertains to Google TV, and have batched together some of the perspectives that are floating around.  Most common theme: now that Google owns the STB business, they can just sprinkle Android into all the next-gen cable boxes…

That gives Google an attractive footprint to leverage on a number of different fronts within the digital home, perhaps with a Trojan Horse strategy of pushing Android-based middleware out to shore up its lacklustre connected TV strategy.

Source: With Motorola, Google gains a big TV strategy | News | Rapid TV News http://www.rapidtvnews.com/index.php/2011081514335/with-motorola-google-gains-a-big-tv-strategy.html#ixzz1VEtbiUZe

Also surmised by Apple Insider, Robert Scoble, CNET, Business Insider, NewTeeVee, and Lost Remote (and others).  Here’s the thing, this isn’t even a topic/issue/option in play, at all.  It’s not exactly like Motorola’s been unable to acquire operating systems to power their set tops, and could easily have chosen Google TV prior to now.  Further, there’s simply no such thing as “sneaking” technology into the cable infrastructure, not even a tiny bit.  We’ve seen (and I’ve worked for) many companies try to accomplish some set of these tasks, and not one shred of success.  Why?  Because the cable industry commissions the hardware and features they want, and not the other way around.

Burger King creepy guy

You Can Have it Your Way. aka 7' tall and creepy.

Another widely spread philosophy is that the only reason Google TV hasn’t caught on yet is due to not having had the right chance/opportunity:

“Google TV has not caught on yet,” wrote AOL journalist Saul Hansell on his personal blog. “This could be the wedge to get it in millions of living rooms.”

Source: http://news.cnet.com/8301-31001_3-20092451-261/motorola-could-help-cure-ailing-google-tv/#ixzz1VExC7Dqg

Shared feelings from Zatz Not Funny, Lost Remote, NewTeeVee, and more, but not by myself (nor my friend Dan Frommer, though he’s much nicer about it than I would’ve been).  Google TV hasn’t caught on with consumers because it’s the wrong value proposition for consumers, period.  In my ten-plus years of building “connected TV” products, the thing I’ve learned is that the more interaction you throw on the screen, the less you engage and benefit your users.  While there are moments for “lean-forward” activities, they are fleeting.  Google TV is built on the opposite premise.

Maxell dude + Venom

This isn't exactly the lean-back experience I was expecting.

One last comment that I’ve seen making the rounds was that Google just gained a bunch of knowhow regarding building boxes.  This doesn’t much pass the sniff test either, as other than Apple, everybody builds boxes the same, and there’s very little secret sauce here.  If anything, they should consider offloading all hardware production that still gets done internally or dive in deep in fully integrated software/hardware solutions.  More on that in a bit.

So that’s enough about everybody else’s theories, time for a few of my own.

  1. The acquisition was entirely about the patent portfolio, the synergy (or not) between Google TV (G-TV) and Motorola’s STB division (M-STB) is positive, but was coincidental.
  2. Google must demonstrate to current M-STB customers that they will not disband nor change the status quo there in the short term (let’s call it 2-5 years).  If this doesn’t happen quickly, we could see an exodus to the numerous viable competitors.
  3. Google would be better off moving G-TV inside M-STB than vice versa.  M-STB has the requisite business practices savvy for dealing with the cable industry, which is significantly more vital to longevity than any software platform.  In fact, gaining this type of business experience is quite a boon for Google, as its an industry they have historically (dating back pre-YouTube days) not well-understood.
  4. The other massive obstacle that seems underreported is the complete lack of fit between M-STB hardware platforms and G-TV software architecture needs.  One of them will need a rewrite, and that’s costly.
  5. Without a major improvement to the platform itself, this acquisition does not change G-TV’s fate.  No cable company on the planet is simply going to allow technology into their boxes (yes, they buy em, they rent em to customers) without a) control and b) a clear path to revenue/profits.  Granted, there are indications those profits could come, but not with the current platform.

Ultimately, I think this is a fascinating topic.  The nuance of industries involved, the hugeness of capital in play, and the clearly disruptive horizon for the TV business is more exciting than virtually anything I can think of.

Chile Volcano Lightning

Well, almost anything.

They Pulled Me Back In! I’m Joining Dijit Media as Chief Product Officer

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A week ago I announced that Jim Schaff would be taking over active duties at Stage Two, and that I’d be focusing on “other stuff.”  Today I’m excited to share the stuff:  I am joining the management team of Dijit Media as Chief Product Officer, where I’m responsible for product and marketing (here’s the official update).  Not only that, my virtually common law married colleague (business partners for much of the past 14 years) and very close friend Adam Burg is the company’s VP of Business Development.

What???

Last Fall, I gave a presentation at the Set-Top Box Conference in San Jose, and the entire drive back I had a feeling of near elation.  Not that I had said anything extremely profound, but it was wrapped up in the feeling of doing something I had a lot of passion for – in this case, discussing the future of television.  Over the next few months, I spent a lot of time doing research in the Smart TV (also called Connected TV or Internet TV) space, and started seeing some trends emerge, and realized there were some very interesting business opportunities on the horizon.

Adam and I spent months developing a prototype concept of the vision we had, and went to meet with some of the brightest folks we know in the convergence field.  One such bright folk was well-known VC Stewart Alsop, who I’ve known since the late 1990s, who introduced us to Maksim Ioffe, CEO of Dijit.  In our very first meeting with Maksim it was clear he shared much of the same industry and product vision and philosophy with Adam and me. I’ll keep this part of the story short, as we’ve all seen this movie before – we ended up agreeing to join the company. And there was much rejoicing (yay).

Why Dijit?

The grand vision of Dijit is to create the ultimate “four screen” (phone, tablet, computer, TV) social entertainment experience, one which seamlessly merges disparate products and platforms and content into one single, easy to use, consumer offering.  The company is well on its way, and its first product is an iPhone app that enables a really sophisticated, yet elegantly simple control experience for home media centers.   As Maksim put it, “Consumers have 21st-century home entertainment experiences but are stuck with remote controls that haven’t been updated since the 1980s.”  The company partnered with Griffin to produce the Beacon, a clever take on the “IR blaster” product, and one that’s already receiving solid reviews (and I haven’t even done anything yet!).  This is going to be a very exciting company to be a part of, and I’m thrilled to have such an opportunity.

Reminiscing.

I still recall the early days at Mediabolic, where we enabled networked home entertainment solutions that interfaced with legacy, analog consumer electronics devices (yes, we were networking the living room in an era where there were virtually no HDTVs, no YouTube, no Pandora, and no… iPod!).  At Mediabolic I learned what it takes to design and build embedded entertainment devices, to work with consumer electronics manufacturers, and the deep set of challenges surrounding the connected home industry (fun trivia: I heard the phrase “this is THE year of the digital home” every single year starting in 2001 – possibly earlier).  It was a great experience, and key people from that team now work at amazing companies like Netflix, Rovi Corp (Rovi acquired Mediabolic in 2007), etc.

At Sling Media I had the unique opportunity to work for and with some outstanding individuals, not to mention the position of being tasked with figuring out how to deliver the perfect “living room experience” – only over the Internet.  The company’s CEO, Blake Krikorian, taught me the meaning of focusing on every detail and nuance, remaining truly innovative, and keeping the consumer’s wants and needs in the forefront of every product decision.  I also had to learn the ins and outs of social media, back in the era before it was called “social media,” where “the bloggers” were a special, hard to understand subset of humanity (or, as I rapidly learned, just cool people).  We accomplished a great success building the Slingbox, and I’m proud of the product, the team, and the experience.

Over the past four years at Stage Two, I’ve had tremendous exposure to startups, big companies, CEOs, visionaries, the media, and managing a great team.  We literally put companies like Boxee, Bug Labs, and Pogoplug on the map, and have also had the chance to work for well-established firms like Electronic Arts, Best Buy, and VUDU (now Wal-Mart).  I’ve learned from entrepreneurs like Jim Lanzone (now president of CBS Interactive), Peter Semmelhack (Bug Labs), David McIntosh (Redux), Rahim Fazal (Involver) and so many others (I’ll write another post in the next little while chock full of shout-outs).  I’ve redesigned product experiences for dozens of products, and created marketing/PR/social media campaigns for dozens more, and had the pleasure to work with great teams along the way.

The Future.

And now I’m taking all of the above, and putting it to work at one place.  Welcome to Dijit.