Slingbox Standalone vs Slingbox Cable

Given the number of boxes aiming to connect with the television set, it makes sense to partner with the leader in the field, the cable set top box.  It is a strategy that TiVo has recognized and been following in order to gain a deeper household penetration.  But working with cable operators comes with a price, and that issue is working under the content licensing agreements as well.

Slingbox, as a standalone box, simply needs a wire between cable set top and the Slingbox, and then a wire to the TV set.  It may be a number of wires between the devices but it allows the Slingbox to talk to the cable box.  It then enables all mobile devices to access that cable box, through the Slingbox,  although the big downside is that only one user can watch a show at a time from this set-up.  TiVo offers an option for a CableCard to make it a cable set top box, although depending on the operator, it may not access the on demand features.

Under the standalone feature, a user has a complete TV Everywhere experience at his disposal.  Still, Sling the company, recognizes to gain more households, it may be necessary to follow the TiVo model and put their technology INSIDE the cable set top box.  But that ultimately limits the true value of the Slingbox.  By working with the cable operator, Sling would be subject to their licensing deals that for many networks limits access to streaming of their channels.  "TV Everywhere is a nightmare for consumers because of these unresolved issues," whether cable operators work with Sling technology or not. 

Sling may want to get closer to the cable operator but networks are already developing their own streaming apps for each of their channels.  It does give networks more control over their content but it becomes much more confusing for the customer trying to find which app to use to get to the content they want to watch.  An aggregated app, like the one a standalone Slingbox offers, seems the easiest to manage for users.  That is until someone comes up with an app that provides a complete line-up of content choices, linear and on demand and links to the app to best serve it to the consumer.  An extra step, but perhaps a likely next step as a go around of the cable operator.  Given the cost and difficulty of getting a TV Everywhere experience, it is why users have found alternatives with OTT and ditching the cable box completely.  And that is something Sling, TiVo and the cable operators really have to worry about. 

Roku Wants Market Share From Apple TV

The Holiday Season is upon us and Roku wants to be the OTT box for the home.  And they believe that they can take share of market away from Apple TV.   "Roku, which makes set-top boxes that stream video and subscription services to TV sets via the Internet, has stepped up the rivalry with an in-theater ad push touting its content advantage over Apple TV and other streaming players."  So while Roku is promoting its content strength, Apple has done nothing to upgrade its Apple TV product in 2013.  So is it going to be a fair fight?

Truth is, Apple TV and Roku have to worry more about the new gaming platforms coming from Sony and Microsoft.  The PS4 and Xbox One are meant to deliver a similar video streaming experience as well as be the gaming platform in the home.  And with 1 million PS4 sold in less than a week, will consumers buy more than one streaming media box. 

In the head to head, Roku has the better price and a rich variety of content partners.  "Roku sells several models at prices between $49 and $99, while Apple TV retails for $99. Some reports suggest that certain retailers will drop Apple’s price to $75 on Black Friday."  But Apple offers something Roku doesn't, and that is its iTunes library.  For those married to it, the Apple TV uniquely enables your HDTV to watch itune content; Roku and others do not.  But customers may not want to buy a discounted Apple TV box if they suspect that a new box is set to be released in 2014.  Roku may be striking while the iron is hot and that might just be the right call.  With Google's Chromecast competing as well, Apple TV may just be the box left behind. 

Streaming Media Could Add Another Competitor

The streaming media platform for renting and/or buying video content has quickly become a crowded space.  Of course, you have the big players, Apple, Amazon, Google, Hulu Plus, and Netflix.  Retailers like Walmart have Vudu and Target with "Target Ticket" want you to be both their brick and mortar and online source for video consumption.  And of course tons of free streaming video sites as well.  So access to online movies and TV shows for rental and purchase is abundant.  Yet, there is talk of a new entrant.

Cable operator Comcast wants to extend its on demand library of content to streaming and offer its own streaming service for rental and purchase with "plans to start selling movies for download and streaming through the cable operator's set-top boxes and its Xfinity TV website, according to people with knowledge of the plan...The initial offering will include a range of titles from several Hollywood studios that include new releases, older movies and some TV shows, one of the sources said."  Its one advantage, you already have a set top box in the home so no need to buy an Apple TV, blu-ray player, Roku box, TiVo, gaming system, tablet, laptop or other to watch their videos.  Unfortunately for cable operators, most households have more than one of these other boxes.

The article states that this new entrant would "offer a new path for Hollywood studios to generate revenue", but I wonder if cable operators are too late to the game.  Comcast may be considering it, but the other cable operators most likely haven't discussed.  With multiple boxes fighting for the TV shelf and already offering streaming media to compete with cable's on demand services, that window is already wide open.  Certainly adding a new bidder to the streaming rental and download space creates more competition and likely higher bidding for exclusive content, it does not, as the author contends, open a new distribution window.  Still, it is a space that cable operators must enter if they plan to compete with OTT platforms.  

I can see the potential of cable operators offering free download movies to triple play customers, high rental customers, and other incentives to encourage consumers to remain loyal to their cable operator.  A cable streaming service offers great marketing potential when competition is only getting fiercer.  So Comcast Cable and others, what are you waiting for?

Xbox One or PS4

We have a major decision going on in my family.  What gaming system do we get.  As neither is backwards compatible with its predecessor, there is no legacy allegiance to worry about.  And trust me, we have played with them all, Wii, Playstation, Xbox 360.  But with PS4 release today and the Xbox One next week, the urge to buy has been plaguing my son. 

Both are expensive systems, neither are perfect, but he wrestles nightly with which platform to get.  For me, the decision seems an easier one and that is to wait.  Why?  Like any release of a new system, software bugs exist and best to not be the guinea pig.  Also, both platforms have limited content choice for games as neither can use older games.  In fact, I might give an extra push and lean more toward the company that recognizes the ownership of games in their prior system and offers free downloadable versions or discounts for online game upgrades.  And lastly, while my son may want to lead the pack, the social elements of each platform rely on friends also on the platform.  I think he is best to learn which platforms his friends are leaning as well before purchasing a new system. 

There has already been a run on pre-orders of both systems.  Game Stop, Best Buy and others are opening at midnight for an early jump on sales.  And with the holidays peaking around the corner, a new gaming platform and its games make for great gifts.   But what is the rush.  The old platforms are still here and many will stay want to play those old PS3 and Xbox 360 games.  And who knows what discounts might await him in January.  But I can only suggest.  For gamers, young and old, the appeal of new platform, the both in many years for Sony and Microsoft, brings more power and storage, as well as better graphics.  The force may be too great for them to ignore or avoid. 

Netflix For The TV Screen

Certainly millions of subscribers are getting great satisfaction from streaming videos directly to their personal devices, from laptops to tablets and smartphones.  But sometimes we don't want to watch alone and the shared viewing experience that a TV screen provides enables a shared experience and future conversation about the show.  Recognizing that different platforms require different interfaces means understanding how consumers are interacting with their content and Netflix seems to embrace that wisdom.  "Netflix has unleashed an overhaul to its interface for televisions that extends more uniform, feature rich capabilities to apps running on a many TV-linked devices, including select Roku boxes, smart TVs, Blu-ray players, and Playstation consoles and the Xbox 360."  Netflix consumers enjoy watching on the bigger screens and assuring that the user gets the best experience in searching and streaming content is what makes for satisfied subscribers.  The more ergonomically suited the user experience becomes, the more likely subscribers remain engaged and happy with their Netflix subscription. 

Consumers Dropping Cable TV Service

It may be just a drip, drip, drip, but the high cost of cable TV, coupled with the rise of video content streaming on the web, may finally be turning consumers off cable TV completely.  Yes DirecTv and Dish both saw quarterly subscriber growth, likely due to the Time Warner Cable fiasco with CBS as well as to their cheaper offerings.  But a total number of subscribers have fled cable TV completely. 

"Veteran Wall Street media analysts Craig Moffett and Michael Nathanson calculated that the pay-TV industry — which includes cable, satellite and phone companies offering video service -- lost 113,000 subscribers during the third quarter."  Call it cord cutting but the reasoning behind this loss cuts much deeper.  It is the younger demo that no longer values cable and prefers to spend more time with web, social media, and gaming.  Should Q4 numbers show an increase in total customer drops, this cor cutting trend will hit hard.  Already cable operators are testing usage based broadband subscription packages.  Their intention, to recoup their revenues from high usage households dependent on streaming media platforms like Netflix, Amazon, and others.  And that usage, measured by recent reports, have been increasing rapidly.  Video streaming is dominating the broadband spectrum.  And so households that stick with cable operators for their broadband will see those fees rise faster and faster to make up for the loss in cable television revenues.

Consumers have little choice for broadband today.  Lower cost DSL service may find some relief and telco/wireless companies can provide packages of service that might just prove a better value.  But there is a need for more competition in this space.  When Time Warner Cable lost Q3 cable subs, they also lost Q3 broadband subscribers, a rare shift and one that portends more disaster for the cable operator. 

Broadband today continues to demand cheaper access and faster connection speeds.  Pipelines are easily clogged as high usage of heavy data video streams are requiring faster capital improvements.  But consumers will fight back if broadband usage fees rise dramatically.  Consumers are leaving cable for broadband and that trend will only quicken. 

The Future Of TV Sales

With the rise of tablets and smartphones, smaller screens are outselling bigger ones.  And we seem more likely to replace our iPhones and our iPads far more rapidly than our big screen HDTVs.  On the business side, sales of big screen TVs are slowing down.  "Overall, global flat-panel TV shipments were down 7 percent in August, the third straight month of decline compared to their levels during the same time a year ago in 2012."  The holidays are coming and expectations are that sales will rise, but manufacturers are concerned and will be aggressively lowering their prices to capture market share.

So why should Apple even consider this business.  Consumers have gotten comfortable with the box behind the TV set and seem less likely to upgrade their TV sets, even for an Apple television.  With gaming consoles like XBox and Playstation driving streaming and OTT, consumers care more about the content then an all-in-one TV set.  And that is why Apple should place more emphasis on their Apple TV product and focus on more ways to make it both cloud and hard drive ready.  Focus on content deals and pursue a rental business to complement its iTunes sale business.  Let the Apple TV box work behind any TV set and let others sweat over the big screen set.  And if you want to sell a big screen monitor; great.  Just let it work with all your devices. 

Superheroes Invading OTT Platforms

If sports doesn't become the content that propels OTT platforms forward, then maybe it will be the job of superheroes.  With The Awesomes on Hulu, the time has come for the next tier of heroes to emerge and Marvel/ABC is providing them with their recent deal with Netflix.  "Disney and Netflix announced a deal Thursday for four 13-episode series featuring Marvel Comics heroes Daredevil, Jessica Jones, Iron Fist and Luke Cage that will air on the video-streaming service over multiple years and will lead to a mini-event called The Defenders."These shows are scheduled for release in the next year.

Aimed directly at the teen audience, the key demographic by the way for video streaming, Marvel Studios and ABC are recognizing the power of superheroes in the disruptive world of streaming video.  And building synergy with its theatrical and linear properties will only continue to increase the value of their content across all platforms.  It is a brilliant strategic move for ABC to stay relevant in a changing environment.  And for Netflix, further push value of its streaming service and subscriber growth.  Exclusive content, with the Marvel name recognition, further demonstrates that content is king.

Why Did Dish Network Buy Blockbuster?

When Dish bought the Blockbuster chain a few years ago, the question most people asked was what was their to gain from buying a brick and mortar establishment that was already seeing loss of market share in the DVD rental business.  Netflix was struggling to convert from mail to streaming and Dish was still stuck with a brick and mortar business competing with a subscription mail business.  Clearly they were a step behind and a dollar short.  But Dish came in and bought the company, presumably for its content business.  And since then, nothing.  So what was Dish thinking and why did they spend their money on a losing investment that had continued to bleed dollars?

Stores were closed along the way and finally, this week, the announcement that the rest of the stores and mail order business was closing down.  From the official release, "'This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,' said Joseph P. Clayton, DISH president and chief executive officer. 'Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings.'"  But if the intention was to push the digital offerings, what has Dish been doing since they purchased the Blockbuster brand to compete in this space. 

While Amazon, Netflix, and Hulu have been investing in original content and building out their online brand, Blockbuster has been eerily quiet.  The brand name once synonymous with video content rentals has lost its leadership brand and its legacy stature.  It is a shell of its former self.  Dish has done little if anything to promote or differentiate itself in the online, digital space.  And with the loss of their stores, their awareness could even drop below Redbox, who continues to operate its vending business as it too finds a digital footprint.  So Dish has a big decision to make, do they put a ton of investment back into the Blockbuster brand to compete more effectively against Netflix and others, or is its best move to simply take the full loss and write off.  I am suspecting the latter is the better move.