Tuesday, December 14, 2010

Comcast Testing New Set Top Box

As cable worries about cord cutters, those that prefer access to video over the web, cable operators have become nervous. So if you can't beat them join them. Comcast is testing a new set top box, internally called Xcalibur, that allows the TV to connect to both cable and web videos. "What little is known about Xcalibur. The device is said to bring a “smattering” of Web video and “basic connections” to social networks, but not access to the full internet. It also allows the user to search for content across live, recorded and on-demand options." Certainly anything is better than the current set top boxes used by cable.

A step in the right direction but the path has many pitfalls, including the merger plans with NBC. "A product like XCalibur would be just the kind of device where Comcast could conceivably promote its own online offerings (Hulu, Fancast, etc.) at the expense of competitors (Netflix)." Unfair competition is the crux of the concern facing the FCC and DOJ in approving this merger. But in developing a new set top box, is Comcast getting down to why it is needed.

Viewers aren't choosing the web because it is loaded with more content, or that it is in Hi Def, or that it is on demand. Cable leads in all these categories. Customers are choosing the web for two main reasons that I can see. Web access is far cheaper than a cable subscription and the web offers more flexibility across more platforms.

Today, cable is striving to provide authentication to mobile devices and computers. But to the issue of cost, cable must figure out how to lower its costs to stop the flow of customers from basic subscription. Does a new set top box do that? Not on its own. Lower prices is the real solution.

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