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creating a new competitive market and putting an end to the $20 billion in fees consumers pay yearly for often-outdated hardware.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 @ 1:03pm

    Back to when the TV's remote was the VHS Recorder.

    Sure, that would be nice. Those of us old enough to remember when VHS was a shiny new thing and a television was a hulking CRT with a couple of dials (one for VHF and another for UHF channels), you could use your VCR
    (that's video cassette recorder, think 8 track tape compared to CD... hmm if you don't know what a VCR is, what are the odds you'll know what 8 track is? Nevermind... Wikipedia is your friend).

    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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