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The Real Loser In The Charter-Time Warner Deal: The Set Top Box

While most MVPDs would love to see the set top box go the way of the dinosaur, Comcast has been betting on their X1 box, a sleek, 21st-century device that they had hoped to make the industry standard. That was, at some level, part of the motivation behind the Comcast-Time Warner deal: to create critical mass for X1 so that it would be virtually unstoppable.

Only now that’s not going to happen.

While Charter and Time Warner are unlikely to do away with set top boxes in 2015, they both seem to be fans of the BYOD (Bring Your Own Device) theory which says that set top boxes are clunky, poorly designed, expensive to maintain (it costs an MVPD something like $200 every time they need to roll a truck) and the unreliability of cable installers contributes heavily to the public’s low impression of MPVDs. Which is why companies like Time Warner and Charter would love to do away with them and let viewers buy their own Rokus, Apple TVs or tablet/smartphone apps.

Time Warner was one of the first MVPDs to launch a TV Everywhere app on Roku. Charter’s CEO Tom Rutledge has often expressed his displeasure with set top boxes and is looking to introduce a cloud-based UI which could also easily be ported to a streaming device or connected TV once the old boxes gave out.

Either way, they new entity (should Congress approve the marriage) seems ready to exit the set top box game and that’s bad news for Comcast. The goal with the X1, which Comcast hopes to license to other MVPDs, isn’t to own the set top box market as much as it is to own the firehose of data that comes with owning the interface: Comcast would be able to know what shows people were watching, saving, recording, favoriting and sharing on other MVPD systems, data that would in turn be very valuable to the networks and other programmers.

Maybe next time.


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