In what should be a surprise to no one, Comcast is pushing forward to eliminate its set-top boxes (STBs) in homes with connected TVs. The surprise is that it’s taken this long.
For pay TV companies like Comcast, this is a no brainer. From a systems development perspective, these companies have been held back by the multitude of STBs they have to manage that are of different ages, models, and manufacturers. In a real sense, their innovations could only be as good as the worst box to which they still had to design.
For consumers, this is a welcome step in the right direction. As I’ve noted a number of times over the years, viewers prefer to reduce their boxes and have those services as downstream towards their sets as possible – preferably built into the set. This is why TiVo’s separate boxes lost out to less-capable DVRs built right into pay TV STBs. Or in the VCR and DVD era, combo TV sets had those devices built right in. Or why today Roku and FireTV software are consolidated into sets.
For a number of years, pay TV providers have offered a STB work-around through their mobile apps. I often use my FiOS app on a tablet to search, set my DVR, or change channels. But unlike my old Comcast Xfinity app, it doesn’t allow me to initiate a VOD program on my TV set (yes, I’m one of the few who frequently uses VOD). This is a big drawback as it means I still have to struggle with my remote and the clunky STB interface.
The Revenue Hole
This evolution towards a totally app-based interface is welcome to both sides. It can only improve the user experience. But the interesting question is how will pay TV services make up the loss of rental fees for their boxes and the remotes. This is not an insignificant number considering the average pay TV home having about three sets. That’s roughly $25-30 a month that will be lost to a pay TV provider when a home goes connected. I suspect an “app convenience fee” or something is in our future, as the price of the replacement of our STBs.
David Tice is the principal of TiceVision LLC, a media research consultancy.
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