Afraid Of Upsetting The Cable Industry, Roku Won't Support FCC Quest For Increased Set Top Box Competition
from the i-got-mine,-thanks dept
As the FCC continues its push to open up the cable set top box market to competition, one of the companies that could benefit the most from such a shift isn't willing to support the initiative. The FCC's plan calls for the cable industry to deliver its existing cable content to third-party hardware, creating a new competitive market and putting an end to the $20 billion in fees consumers pay yearly for often-outdated hardware. But unlike companies like Google and TiVO, Roku isn't supporting the plan, making it clear this week the company doesn't want to upset its friends in the cable industry:"We have not been advocating for a rule making in this area at this time,” Tricia Mifsud, a Roku spokeswoman, told IBD. “While we are known for selling streaming players, it is only one area of our business. Customers also access our platform through smart TVs and streaming players that operators deploy."Roku's been partnering with Charter and Time Warner Cable (soon to be merged) on small-scale trials that involve the cable companies giving away a free Roku alongside a skinny bundle of basic channels. In New York City, for example, Time Warner Cable's trial offers the free Roku as a replacement for the cable box, delivering three different skinny promo bundles ranging from $10 to $50. Roku makes it pretty clear it's keeping its mouth shut in the fight over the cable box because it believes these relationships will only flourish:
"In addition to Time Warner Cable, we also have a similar arrangement with Charter where they are buying streaming players to offer in a bundle,” added Roku’s Mifsud. “Overseas, we have partnerships with Sky in several countries and Telstra where we have licensed use of our platform and they have deployed their streaming video services to co-branded streaming players."Indeed, Roku's already cooking up a hybrid streaming and cable box for use overseas it hopes the soon-to-be fused Time Warner Cable Charter will adopt as well. The problem is that these trials aren't likely to see broader deployment in the States, because execs fear such alternatives will cannibalize their already-struggling traditional cable subscriber bases. Cable operators have a long, proud history of flirting with more innovative, less expensive alternatives only for executives to scrap or hamstring the ideas for fear they might hurt the sacred, legacy TV cash cow.
But, because Roku believes it's first in line for the cable industry's affections, it appears to be backing away from an initiative that would likely be good for the entire sector (investment by Viacom, 21st Century Fox, and UK cable operator Sky might be shaping Roku's thinking as well). After all, why support broader, healthy competition when you believe you've got the inside track? Well, because should the FCC's gambit actually work, Roku (which people forget began as a brain child of Netflix) stands to gain a much larger chunk of this suddenly-open market than it will from remaining mute.
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Filed Under: cable, fcc, set top boxes, tv
Companies: roku
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Roku's betting on this initiative ending up just like CableCARD
CableCARD itself, not exactly the poster child of success.
Aero - crushed by lawsuits, Hulu hamstrung into uselessness, various third party players (including the great and powerful Apple) scaling back or abandoning the space altogether.
The only success stories are those outside of the traditional cable industry entirely (see: Netflix, Amazon Prime).
The FCC still hasn't done anything about; below the line fees, cushy insider deals (ex: XBox as cable box, but not PS), capping the competition while giving your own programming a free ride, etc.
They are probably betting that when the dust settles, it's better to be on CableCo's good side than out in the cold.
Just a thought.....
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What if they are prepared to do a rapid turn?
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In their position, I wouldn't support this either.
However, if I were Roku, I'd be really worried about this.
You see, I believe the big benefit to be had from this move is not new improved cable boxes with lots of shiny new features. I don't even believe the big benefit from this is cheaper cable boxes. While I would welcome both changes, I think there's something bigger here we can push for: the death of the cable box entirely.
What I hope this legislation will truly allow is a return to the days when I don't need Yet Another Box cluttering up my entertainment center. What I'm really hoping for here is that it will make it both possible and profitable for TV vendors to build this function back into TV sets, where it belongs, such that I can channel surf directly on the TV, without the need of a separate box.
Combine this with existing smart TV features, and suddenly I ask myself why I'd want a Roku at all anymore.
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Back to when the TV's remote was the VHS Recorder.
remote control as the remote for the television. After cable had been around for a while television makers started incorporating that functionality into televisions directly. Sure you still needed a cable box for PPV or premium channels (think HBO, Cinimax, etc.), but basic ones unscrambled and available to anyone who wanted to add it to their products.
If you combined that with the changes to the law that prohibited cable companies from charging you per television, we entered the nirvana where we subscribed to cable and could run it to all the kids rooms, the rec room in the basement, or wherever without asking the cable company's permission (or paying them more). This was also the era where we had television decoder cards for our personal computers and you could watch television on your computer, or create the first personal DVRs.
This ended when they switched from analog to scrambled digital. Every television requires it's own set top box. They're not charging per television, just per set top box. See all perfectly legal (does anyone remember the old Rabbit system that would broadcast the television signal from one television to one or more other televisions? Think in house analog Sling TV, limited to other televisions).
If the FCC succeeds in reopening this can of worms, just think of all the innovation that could happen? Innovation that your local cable company won't necessarily be getting a cut of. That probably gives them more indigestion than just the potential loss of their 20 billion in set top revenue.
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In the rush for ever cheaper labor, the American worker has been cast aside. These same corporations are in for a rude awakening sometime in the future when they figure out the reason they aren't selling their products is because the public doesn't have the money to buy them. This is what has been driving the cord cutting and it isn't going to get magically better, without pay increases.
When it comes to budget cutting, the first thing you cut in the unnecessary is the entertainment part.
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I completely understand
If I was them I wouldn't want to step on anybody's toes when the future is so uncertain right now either since they are in a good position currently.
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Comes around, goes around, maybe?
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Roku's got a good thing going
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