Have I Got a Super-Charged Set-Top Box for You!

I suppose the President, like a lot of cable subscribers, doesn&#8217;t like paying an average of $231/year to lease boxes that allow them watch all the cable channels. That adds up to almost a $1,000/over four years!&#160; And most cable ops don&#8217;t bother to replace boxes but every six years.&#160; There is, of course, a pretty good reason for that &#8230; there are some 60 million or so cable subs.Satellite guys do about the same thing.&#160; While DISH keeps inventing new STBs that skip commercials, DirecTV seems to concentrate on whole-home upgrades, which also cost big bucks.&#160; No upgraded boxes as a service.&#160; Of note, there are almost 34.5 million satellite subs.(An aside: Why doesn&#8217;t this apply to the 11.5 million or so telco subs from FiOS and U-verse?&#160; Oh, yeah, complicated FCC definitions.)Of course, competition already exists &#8230; TiVo even combines one of the best navigation systems with broadband content included.&#160; TiVo&#8217;s best price (in a Google search) was $267.99 at Best Buy for a Bolt model &#8230; sounds like a savings of more than $700/year, doesn&#8217;t it?&#160; Not quite! The navigation system requires about a $15/month subscription on top of the cable bill.&#160; Over that same four years, you can &#8220;save&#8221; about minus $60 or so.&#160; Of course, you do have a box.&#160; But maybe we should look at the cable operator replacement model of six years.&#160; That&#8217;s another $231/year bringing the cable box cost to $1,386.&#160; For the TiVo, the cost adds up to $1,342.&#160; A real savings of $44.&#160; And, during that six years, imagine how many more technological breakthroughs may have happened.More STB competitors might drop some prices; competition does (mostly) work.&#160; Now, you can buy a variety of &#8220;boxes&#8221; including streaming sticks for a lot less money.&#160; But then you&#8217;ve got to go on broadband and search for content and pay for (most of) it.&#160; Google&#8217;s Chromecast comes in colors and costs only $35.&#160; Other mini-STBs include Apple TV (a fourth generation Apple TV set-up costs $159.99 at groupon.com) and Roku&#8217;s Model 4 ($129.95 at roku.com).&#160; The 54 million Amazon Prime customers can get a Fire TV stick for $39.95.TiVo, the only non-infrastructure STB maker has deals with a number of cable operators for data matches (those rights make up that monthly fee).Any competitive STB maker will have to tip-toe through a mine field of copyrights in order to deliver what the cable and/or satellite companies do &#8230; or stick to the burgeoning competition of linear and on-demand streaming packages &#8230; many beginning to resemble cable offerings.Which makes one wonder &#8230; what&#8217;s this all about? Oh, maybe this is just a way to replace the cable&#8217;s linear stream with your own?Random Notes:From the consultants at SNL Kagan regarding the now underway spectrum auctions: &#8220;We estimate that the group of 12 companies we analyzed could generate almost&#160;$7 billion in an 84 MHz clearing scenario, or up to&#160;$13 billion in&#160;a lofty 120 MHz scenario -- if the auction proceeds in the manner that the FCC desires ...&#8221;The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage/MyersBizNet management or associated bloggers.

Have I Got a Super-Charged Set-Top Box for You!

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Paul S. Maxwell

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