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

I suppose the President, like a lot of cable subscribers, doesn’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!  And most cable ops don’t bother to replace boxes but every six years.  There is, of course, a pretty good reason for that … there are some 60 million or so cable subs.

Satellite guys do about the same thing.  While DISH keeps inventing new STBs that skip commercials, DirecTV seems to concentrate on whole-home upgrades, which also cost big bucks.  No upgraded boxes as a service.  Of note, there are almost 34.5 million satellite subs.

(An aside: Why doesn’t this apply to the 11.5 million or so telco subs from FiOS and U-verse?  Oh, yeah, complicated FCC definitions.)

Of course, competition already exists … TiVo even combines one of the best navigation systems with broadband content included.  TiVo’s best price (in a Google search) was $267.99 at Best Buy for a Bolt model … sounds like a savings of more than $700/year, doesn’t it?  Not quite! The navigation system requires about a $15/month subscription on top of the cable bill.  Over that same four years, you can “save” about minus $60 or so.  Of course, you do have a box.  But maybe we should look at the cable operator replacement model of six years.  That’s another $231/year bringing the cable box cost to $1,386.  For the TiVo, the cost adds up to $1,342.  A real savings of $44.  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.  Now, you can buy a variety of “boxes” including streaming sticks for a lot less money.  But then you’ve got to go on broadband and search for content and pay for (most of) it.  Google’s Chromecast comes in colors and costs only $35.  Other mini-STBs include Apple TV (a fourth generation Apple TV set-up costs $159.99 at groupon.com) and Roku’s Model 4 ($129.95 at roku.com).  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 … or stick to the burgeoning competition of linear and on-demand streaming packages … many beginning to resemble cable offerings.

Which makes one wonder … what’s this all about? Oh, maybe this is just a way to replace the cable’s linear stream with your own?

Random Notes:

From the consultants at SNL Kagan regarding the now underway spectrum auctions: “We estimate that the group of 12 companies we analyzed could generate almost $7 billion in an 84 MHz clearing scenario, or up to $13 billion in a lofty 120 MHz scenario -- if the auction proceeds in the manner that the FCC desires ...”

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