Reading Josh Lowensohn’s coverage of the Netflix/LG deal on Webware last week got me thinking about the long, sad story of the set top box. This poor, maligned device is one of those phenomena that suffers from both 1) having almost limitless potential, and 2) being cursed to almost surely never attain greatness. Why? The cable companies, cut from the same predatory territorial mindset as US cellular carriers, are highly vested in the status quo. Can someone get this puppy to the top of the mountain? Even money says Apple is our only hope.
Set Top Box: “I coulda had class. I coulda been a contender.”
- Marlon Brando as Terry Malloy, On the Waterfront (1954)
In the 90’s the set top was the future, the rage. It was touted to become ‘the home hub’, a device where audio and video entertainment would come together with emerging home management systems, gaming, home security, the Web…. Sadly, this has never happened and may not for a while. High bandwidth cable is in a lot of homes (58.3% penetration of US homes according to NCTA, June 2007). Plus it’s a captive market. I suspect the acquisitions starting from the late 90’s to the present (two notables: Microsoft+WebTV, Cisco+Scientific Atlanta) are more strategic in nature than financially driven.
Open Standards are Our Best Hope
So what happened? Change here has little financial motivation. Do the math: 50+% of US households are paying $30 to $200 a month for cable. HooWoo! So a lot of money is being made and though it may be called shortsighted, the cable franchisees are not dumb.
Of course to realize the kind of promise the set top box could deliver, there is really one solution: open standards of some form. This means good old free enterprise gets in and innovative folks rally to build the solutions and the market decides. I think the NetFlix folks have the right idea. But what they offer should be a service and not something physically tied to a box. As a cable customer, I have invested in boxes but would consider an optional NetFlix service. I don’t think I am alone.
There is one real downside to opening up the box for others: you have to be willing to split up the money pie. And not wanting to repeat IBM’s mistake of giving 1/3 of their value to Microsoft and another 1/3 to Intel, those running the cable oligarchy in this country are no doubt happy to sit tight.
Is there a way beyond this? Moving forward here is not a technical issue but more of a forcing function. My vote: Apple can do it. Steve Jobs and Apple have moved mountains with iPod, iTunes and now iPhones. I have no idea how they make change happen like they do. So come on, Steve. Do it again! Hit another one out of the park!
“Isn’t it simple as one, two, three? One: The working conditions are bad. Two: They’re bad because the mob does the hiring. And three: The only way we can break the mob is to stop letting them get away with murder.”
-Karl Malden as Father Barry, On the Waterfront (1954)
