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Apple Pitching Cable on Apple Set Top Box
After Failed Attempt at Disruptive Subscription Service
by Karl Bode 09:17AM Thursday Aug 16 2012
There's been chatter for years that Apple wanted to do something disruptive in the TV sector (like a new subscription TV service). Unfortunately those repeated rumors have never amounted to much of anything because Apple keeps running into stubborn broadcasters who are terrified of the existing cash cow being disrupted. New rumors suggest that Apple is still working hard to get their foot in the living room in a big way; in addition to their planned Apple TV, the company has been pushing cable operators to adopt a new Apple set top box:
quote:
Apple contemplated building a cable set-top box more than two years ago before it launched the latest version of its Apple TV, according to a person familiar with the matter. At the time, Apple's then CEO Steve Jobs was dismissive of the idea, believing working with cable operators was problematic because they didn't have national reach—each served only defined geographic territories.
With Jobs gone, the Journal suggests Apple is now taking a less aggressive approach and just wants to get their hardware in the door. So far there's no takers from any cable operators, likely because they fear that once Apple has a foothold in the living room it will be easier for them to start pitching alternative content to their existing cable TV subscribers.

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castsucks

@sbcglobal.net

best case and Worse case

Best case and Worse case

Best for uses it's a cable card or all vid box that you can buy.

Worse case rent only (usa) for $15-$20 /mo each or canada $20-$25 rent / rent to own or buy for $600-$800.

Cheese
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Yawn.....

Yawnnnnnnnnnnnnnnnnnn

skeechan
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Going to be next to impossible

MSOs aren't going to give up their $20/mo cash hog which is their digital box + DVR service.

But if they could get a DBS provider to bite like DirecTV it could end up like an iPhone...people may switch providers to get the device if it doesn't suck and as a result, MSOs would have to come get it just like Verizon and Sprint did for iPhones. And with DBS being nearly universally available, every MSO COULD feel the pressure to offer the device.

Of course there will be haters that matter what, declare any device of this sort DOA just as they did the iPhone and iPad.
mogamer

join:2011-04-20
Royal Oak, MI

1 recommendation

Re: Going to be next to impossible

said by skeechan:

MSOs aren't going to give up their $20/mo cash hog which is their digital box + DVR service.

I guess you've never heard of cable card devices then.

Even though Comcast is the biggest cabelco, you could get their complete service without renting any of their equipment (outside of a cable card). Xbox 360 for On Demand service, Tivo or HTPC as a dvr, and use your own modem for internet and phone.

skeechan
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Re: Going to be next to impossible

They support cablecards because the FCC forced them to.

MSOs were dragged kicking and screaming to cablecards.

FFH
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Re: Going to be next to impossible

said by skeechan:

They support cablecards because the FCC forced them to.

MSOs were dragged kicking and screaming to cablecards.

So what! That support is there and could be used by Apple.
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skeechan
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4 edits

Re: Going to be next to impossible

Uh, obviously that isn't what they're doing. They don't need to negotiate with MSOs to make a cablecard device. If Apple makes a cablecard device, FCC mandates that the MSOs permit it. MSOs wouldn't have a choice just like they don't have a choice with TiVo.

The only reason to negotiate with MSOs is to STREAM their content like the previously mentioned XBOX+Comcast stuff or the Cox+iPad stuff.

It looks to me that they want Apple TV with functionality resembling the Cox iPad app except it actually work after updating But the MSO has to permit such functionality just as Cox is the one putting the iPad app up.

My guess is there is a new Apple TV in the works that runs apps from an Apple TV app store and they want to offer (embedded) apps resembling the Cox iPad app in addition to games and everything else. Such a device, if still in the $99 range I reckon would be immensely popular. Apple TV would then supplant the Wii as the budget game console, especially since the Wii-U goes upscale.

Morac
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said by skeechan:

MSOs aren't going to give up their $20/mo cash hog which is their digital box + DVR service.

MSO's have already gotten this figured out by swapping fees around. For example Comcast lowered the rental fee for the boxes down to $3 and now charges a $17 outlet fee. That fee applies to customer owned devices as well so even if a user brings his own box, he pays almost as much as he would if he rented a box.
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skeechan
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Re: Going to be next to impossible

Huh, I didn't know that. I thought outlet fees were illegal now, like with the telcos. You only pay for the connection to the J-box and then you can split it as much as you want fee-free.

Morac
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Re: Going to be next to impossible

said by skeechan:

Huh, I didn't know that. I thought outlet fees were illegal now, like with the telcos. You only pay for the connection to the J-box and then you can split it as much as you want fee-free.

You can split the signal as much as you want, but since all the signals are now digital and encrypted (at least with Comcast) that won't do you much. Basically with digital cable the MSOs know exactly how many "digital outlets" (i.e. MSO and user provided boxes) you have.
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skeechan
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Re: Going to be next to impossible

Wow, that is crazy. So even with a TiVo you would get hit $17+$2-$3 cablecard rental per box? If Cox ever did that I'd be gone that day. I have 6 "outlets".
wkm001

join:2009-12-14
I put together a Windows Media Center PC with a Ceton quad tuner card that uses CableCard. Then I put a cheap XBox anywhere else I want tv. Whole home DVR. Comcast gives you the first CableCard for free and they credit my account $2.50 per month for owning my own equipment.

Yes, it cost a fortune to build the box. But I have an awesome entertainment center and a whole home DVR. No monthly fees for equipment or TV listings.
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Re: Going to be next to impossible

This is a great way to go, I use to work for a great custom home theater company in Minnesota that did that. We also would put a RAID array inside for backup and a great program called anydvd do the HTPC was a jukebox of your DVD/blueray collection. Our owner was extremely knowledgeable in PCs we were the only one in the Metro that offered them at the time.

Another cool thing he came up with was to split the VGA signal and run it to a white 7" install LCD monitor sold by Accelle electronics of californa it had VGA in and usb touch screen overlay inside. A pair of USB over cat 5 converters got the signal back to the HTPC. You could have this in your master bed room and run everything on the PC. It looked soo cool. And I think the screens were only 250 wholesale.
elefante72

join:2010-12-03
East Amherst, NY
There is very little utility and margin to proprietary boxes. The IP is in the software and moving to IP and centralized DVR. This way the costs will come down dramatically from a capital perspective and an operating perspective.

Once they move to IP, there is no reason say they put the DVR functionality in the CMTS and nobody needs to have a DVR, just IP devices and say tablets and the like.

DVR's are capital intensive, and TBH useless considering the entire body of shows could easily be streamed from a CDN or neighborhood POP.

In any case all of my verizon boxes had cablecards in them, so CC is widely used. I simply removed the fee and setup W7MC which does all of the IP things they are dreaming of.

And the real competitor to Apple in this space is Microsoft and maybe Samsung. STB are dying, it's all about the software.

FFH
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1 edit

1 recommendation

Apple can build one now - a cable card ready device

Just like TIVO did, Apple can build a STB right now that can work on cable systems. It would accept cablecards and would ALSO have their AppleTV box functions for Internet access built-in too.

The problem is that Apple, as usual, wants to build a box where Apple controls the whole process of updates, apps, access, etc. Thereby trying to ace out the carrier from dealing with the customer at all.
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skeechan
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Re: Apple can build one now - a cable card ready device

That would the price up the box and make deployment troublesome for end users. Anyone with a TiVo (I have two) can attest to the nightmare cablecards are.

It is much simpler for Apple to simply app up a new 4th generation Apple TV with MSO supported apps for which MSOs get in-app subscription revenues for.

I just don't see Apple making a "real" cable box. Apple TV is inches away from running everything in the app store and if they can get TV on there, they'd sell a zillion.

NOCTech75
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Re: Apple can build one now - a cable card ready device

said by skeechan:

That would the price up the box

Yes because Apple products are soooooo cheap.

skeechan
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Re: Apple can build one now - a cable card ready device

Some are, some aren't...depends on the market segment.
desarollo

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How is this any different than a Tivo? If I buy a Tivo, the only interaction I should be having with the cable company is to get a Cablecard and paying the monthly service fee, right?

I have no illusions that Apple's motives are not altruistic nor anything but in Apple's best interests; but anyone who can disrupt this nonsense of having to rent gear from the cable company in order to watch the service for which I'm paying, is alright in my book.
majortom1029

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software

Comcast/timewarner/and cablevision all have software that you can use on an ipad or ip[hone to watch tv.

Apple does not have to do an new setup .Just have those 3 put the software on the apple tv. No new setop required.

Cablevision showed their software running on a samsung and lg tv so why not?

skeechan
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Re: software

There is no Apple TV developer agreement other than those very specific ones (eg Netflix, Hulu, etc). Apps running on iPad wouldn't automatically be supported by a 4th gen Apple TV. The developers for the MSO would have to do that.

And if Apple tries to support it themselves, MSO simply pull the apps from the App Store.

Apple has no real choice but to negotiate with MSOs if they want to deploy a 4th gen Apple TV with apps, games AND cable TV.

airwavz
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STB? - Who Cares

Why does anyone have any interest in STB's? The reality is, just like landline phones, cable TV is a 'dead service walking'... They just haven't admitted it yet. The new generation doesn't care about Radio, Cable TV, or anything wired - it has to be mobile AND internet based to even interest them (look at the latest facts on where the kids get their music from). My teenage daughter hasn't sat down in front of the TV in ages. She gets everything she wants on her phone - YouTube, Netflix, Hulu, DI.fm, etc. She only opens her laptop to play games! This time Apple is too late to the show. Between the cord-cutters and the mobile generation, the cable-cos become ISPs or die - it really is just that simple. Why do you think the telcos are simply abandoning copper and focusing on wireless? Any cable-co that's not putting every resource into data is a future bankruptcy...

espaeth
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Re: STB? - Who Cares

said by airwavz:

Why does anyone have any interest in STB's? The reality is, just like landline phones, cable TV is a 'dead service walking'... They just haven't admitted it yet.

... just like these graphs clearly show the decline of HDTVs in households.. er.. wait.



pnh102
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Re: STB? - Who Cares

Non sequitur. Don't forget that HDTVs have been the only thing you could buy for quite some time now. It only stands to reason that more households would have them and that their penetration would increase over time, if only because people are replacing older tvs with new ones.

I'm more interested in the total number of pay tv subscribers over time. Methinks it has been flat, as the only way one provider can get new customers is to poach them from another provider. Based on previous reports here, I don't see people who cut the cord completely on pay tv as a huge factor, yet.

Assuming the number of total subscribers is flat and has been over time, then I would say the pay tv industry might want to start worrying.
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espaeth
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Re: STB? - Who Cares

said by pnh102:

I'm more interested in the total number of pay tv subscribers over time. Methinks it has been flat, as the only way one provider can get new customers is to poach them from another provider.

The rate of growth is slowing, but it's definitely not flat.



Source: »blog.telegeography.com/post/2855···6a45c650

These are global stats.

pnh102
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Re: STB? - Who Cares

I can see how non-US markets being crucial for US-based content providers... but it seems the US market itself is rather flat.

»news.investors.com/article/62181···loss.htm

Pay TV service, at least in the US, has nowhere to go but down.
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espaeth
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1 edit

Re: STB? - Who Cares

said by pnh102:

I can see how non-US markets being crucial for US-based content providers... but it seems the US market itself is rather flat.

»news.investors.com/article/62181···loss.htm

Pay TV service, at least in the US, has nowhere to go but down.

Q2 numbers have been the worst in the cycle for the last few years.

See:



Also, 2012 Q1 posted a 494,000 net subscriber increase before the 348,000 loss in Q2 -- so it's still net positive on the year.


Source: »paidcontent.org/2012/05/11/pay-t···d-in-q1/

It's only been relatively flat the last couple years, and that's largely a reflection of the economy.

Still, when you have 100 million subscribers in the US paying for TV, it's pretty easy to see why you'd want to make a device that would appeal to some of them.

Note that the major area of growth is TelcoTV, and Verizon is still using QAM delivery for TV, hence a "cable box" would be usable for them as well.

pnh102
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Re: STB? - Who Cares

I'm certainly not disputing that the current market for pay TV in the US is huge, it definitely is. I am just not seeing it as a growing industry as it used to be say, 10 or 20 years ago.

But given the price increases and the continuing problems with the economy, I just don't see these numbers increasing as a whole.
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ncbill
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I still pay for TV, but oly per-episode for the 'cable' shows I want, commercial-free, via Amazon Video.

Broadcast channels all recorded over-the-air via a TivoHD.
jjeffeory

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What does HDTV have to do with cable tv?

espaeth
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Re: STB? - Who Cares

said by jjeffeory:

What does HDTV have to do with cable tv?

Remember how most people weren't willing to switch to AT&T for wireless service before they got the iPhone?

The right device can make the most inferior service somehow become palatable.
awbishop

join:2004-08-26
Chicago, IL

What about IP based Tv?

If they could secure the rights to the programming and manage to "unbundle" it, allowing you to stream the channels to the box via your broadband connection, then THAT in my opinion is compelling enough to compete. It would be contingent on 2 things in my opinion, first being I dont want to wait until the next day for the programming (live programming should be an option). Second, the pricing would have to reflect the unbundling of the channels if they go that route. Alot of people that I know are sick of paying for 200 channels and watching 4 to 10 of them. It certainly would make an interesting products.

skeechan
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Re: What about IP based Tv?

With a lot of major MSOs capping HSI usage and looking at overage fees they have their bases covered...which of course is the real reason for caps+overages...not any capacity crunch.
tpkatl

join:2009-11-16
Dacula, GA

What good is an Apple box when Comcast controls the pipe?

We're all at the mercy of our cable provider and their caps and what they're willing ot throw down the pipe. We all know how Comcast really feels about Net neutrality - and it's not encouraging.

As long as {comcast, Charter, TWC} controls the coaxial cable, then Apple doesn't have a prayer.

Which is why Google's Kansas City experiment is MUCH more promising than any Apple box.
elray

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How many times?

Karl laments that broadcasters "are terrified of the existing cash cow being disrupted". I doubt any Wall Street analysts would characterize the broadcast industry as drowning in cashflow.

Apple is the stubborn one here. They are unwilling to invest in the last-mile network and assure 2K/4K delivery; they are unwilling to pay for the content.
tanzam75

join:2012-07-19

Re: How many times?

Apple makes more money from music than the record labels do.

Apple makes more money from cell phones than the carriers do.

Apple makes more money from e-books than the publishers do.

At this point, anyone approached by Apple for a partnership is going to be very wary about handing Apple all the cards.

pnjunction
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Re: How many times?

This is what I'm thinking. They'd be morons to let Apple into their business unless they're itching to fork over a large chunk of their revenue. The business as a whole isn't growing, if Apple is going to step in and make more money than the current STB manufacturers that bigger slice is going to come from somewhere.

Metatron2008
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Do the set top boxes look like Apples?

Oh uh! Watch out cable stb companies, Apple is gonna buy up some patents!

•••••
tmc8080

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sarcasm coming..

sure, $49 set-top rental fee...!

Afterall, consumers love cable-tv they're unsubscribing in droves..
most likely, consumers will use the free content model.. since they're now officially gonna get gouged for internet next year.... since the last of the competitive ISPs refuse to compete now..

IowaCowboy
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They should just build on the Apple TV

They should just build an Apple TV with a CableCard slot. That way consumers would not have to be dependent of their Cableco having it on their system.
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dvd536
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Apple tv

Don't they max out at 720P?

thanks but no thanks.