As they say on SNL, it is time for the cable companies to just "Fix It!". As I have been saying on my blog, the cable set top box is what is truly killing the relationship between cable and the viewer. And in my house, I actually prefer a standalone Tivo to a cable DVR, even without access to premium or VOD on my set. Search features, trick features, speed, even an internet connection (which the cable box still doesn't have), all make the Tivo the hands down winner.
And while cable still waits to deliver, other companies, Netflix, Hulu, Boxee, Apple TV, continue to beat cable to the punch. "We are surprised by how lousy today's set-top box software is. The user interface has barely changed in ten years. Searching through programs on hundreds of channels (and various on-demand listings) requires an immense amount of patience or muscle memory. And the set-top box shows no signs that it's connected to the same pipe as the Internet." So why hasn't cable been doing anything to change? Cable seems to remain in a defensive position, worrying how to compete with satellite and telco, rather than how to be proactive and in front of the curve. Because cable is so capital intensive, the companies may be trying to recoup their investments rather than spend on better hardware and software.
But it seems the best strategy for cable is to do nothing. "They still have the benefit of owning their own dedicated pipe, having set-top boxes in tens of millions of living rooms, and having the best content, live -- which Internet-based rivals don't." At the same time, do nothing, and eventually you will be overtaken by others. Need an example, look at the internet provider life cycle - the dominance of Prodigy lost out to AOL, and AOL's grip went quickly from solid to fringe as cable broadband emerged. Eventually web access could do the same to cable. "But eventually, it's possible that most people won't need to pay a cable company $80 per month to get a solid entertainment experience. We -- admittedly, not TV junkies -- cut the cord last year, any many of our friends have, too. It's possible that through iTunes, Netflix, Hulu, TV.com, and services like Major League Baseball's MLB.TV, we'll get enough stuff to watch. And with excellent video browsing software like Boxee to put it all together, the cable companies could actually face a real challenge."
Change is a coming and cable companies need to adapt their interface now to retain their leadership position.