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creating a new competitive market and putting an end to the $20 billion in fees consumers pay yearly for often-outdated hardware.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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  1. icon
    jilocasin (profile), 2 Mar 2016 @ 12:26pm

    Roku's betting on this initiative ending up just like CableCARD

    Roku's probably betting on this initiative ending up just like CableCARD. If history's any guide, there will be a lot of fanfare, maybe some progress, and then it will either be stillborn, or so hamstrung with restrictions that it may well have been.

    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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