Apple TV vs. Roku vs. SlingBox

April 16, 2009

NOTE: This post is nearly four years old but continues to get traffic, enjoy the read, though I shut down comments years ago because of spam, sorry. In the meantime, please check out my book, Digital Disruption, published Feb 2013 at forr.com/DDbook.

Original post:

This is now the third post I’ve written where I’ve confessed that some unscheduled downtime for health reasons proved to be a marvelous excuse to lay on the couch and watch a lot of TV shows and movies. In my case, I can also claim it’s research because I have to try out all the gadgets in my video setup, which keep changing thanks to upgrades. So in my most recent (and hopefully final) hiatus, I spent some quality time with the Apple TV (hacked to include Boxee), the Roku (recently enhanced with Amazon Unbox capability), and the SlingBox + SlingCatcher combination. Some thoughts:

  • Apple TV still doesn’t float my boat. I did an extensive post on this some weeks back lamenting the fact that this box doesn’t do more than it does because despite repeated attempts to give it a break, I still only find it handy for two things: 1) watching movie previews (which I’m a sucker for, especially anticipating the summer releases), and 2) watching Hulu thanks to Boxee. Now that Boxee has added Pandora streaming — brilliant move, guys — it’s even that much more interesting to me. I personally believe this “hobby” — as Jobs and others at Apple keep calling this product — is headed for the trash pile unless it finds a way to stream ad-supported video and then builds an iPhone-like app store to allow 3rd party development for the box.
  • Roku + Unbox doesn’t do much for me. I’ve written extensively about Roku’s sucker punch, its $99 Netflix box that is so easy to use that it is flying off of Roku’s shelves. And I was genuinely interested in the Amazon Unbox upgrade that happened a few weeks back because I wanted to see how well it was integrated into the experience. The integration is smooth and elegant. However, I found myself questioning the value of the addition. At my fingertips I have 3 ways to get movies on demand: my cable system, Apple TV, and my Roku + Amazon. And they all have similar problems — it’s hard to navigate that many movies effectively unless you’re looking for an obvious choice like the Dark Knight. Though I will admit I used the Roku the most of the three boxes, 99% of it was spent trawling through our queue of 150 Netflix Watch Instantly titles. The fruit: I strongly recommend The Diving Bell and the Butterfly, a haunting and poignant true tale of a man who suffered a massive stroke that left him with only the use of one eye. Run, don’t walk, to your nearest Netflix Watch Instantly option. While there, do everything you can to avoid Sphere, yet another Sharon Stone movie you don’t need to see.
  • SlingBox + SlingCatcher. The SlingCatcher is a loaner from the people at Sling. I’ve used a demo before and was fully aware of its features, but there is something to be said for having it in your home for an extended visit. Here’s what I learned: 1) the people at Sling can do more with video quality over limited bandwidth than anyone I’ve dealt with. I’ve always been impressed with the SlingPlayer’s ability to give me great quality video over wireless connections at home or on the road. But the SlingCatcher has to do one more thing, it has to be able to sling portions of your computer screen to the SlingCatcher. I fully expected the quality of this experience to be subpar. Uh-huh. It’s remarkable. Take a standard size Hulu window, tell your SlingCatcher you want to sling the video to your TV screen and boom, in a few seconds you’re watching full-screen web video from your computer on your TV with no wires attached. Genius. It’s also relatively impractical, however, so as much as I was thrilled to do it, I haven’t done it spontaneously.

By spontaneous, I mean, when I say to myself, “Hmm, I want to watch some video,” the three responses my brain offers are: the PC, the DVR, and the Roku Box, in that order (the DVR follows the PC because with six children, the competition for the DVR is pretty intense). The others don’t come into it unless I’m trying to test something or my first three options are occupied. Lately, I’ve started supplementing that list with some DVR cheating via SlingBox (no need for SlingCatcher), where I can use my PC to snoop in on the DVR while the kids play the Wii or watch a Blues Clues DVD.

I pay close attention to that spontaneous response because it’s the beginning of a habit that will eventually form.

My habits will form differently than yours (you probably don’t have six wonderful children to shape your environment as I do), so it’s not important what my habits are or even what yours are, but what they are in aggregate. To that end, I will keep surveying our fellow citizens to see what habits are emerging. In the meantime, what early habits and preferences are emerging in your life?


Online TV show ads in peril?

February 13, 2009

A few weeks back I asked you for evidence of whether online advertising was showing signs of growing or shrinking. I got some feedback, but none of a smoking gun. Then I spent a few sick days watching a lot of Hulu on my TV screen. I mean, a lot. (I even took a brief look at that Heroes movie with Henry Winkler and Sally Fields that keeps showing up in my recommendations queue for obvious reasons. Talk about a very obvious database-matching exercise gone awry.)

If you haven’t watched Hulu lately, check it out. Are you seeing as many PSAs as I am? I didn’t know the Air Force had so many ads to show. And I didn’t know there were that many eco-friendly organizations as I’ve met lately on Hulu.

I’m even talking about top shows like The Office or House. Is it possible they aren’t selling out their inventory on these great shows? Gratefully, I was spared the flood of PSAs once I started catching up on Battlestar Galactica (BSG). Sponsored by DirecTV, BSG affords a perfect example of online video advertising done right. Yes, DirecTV sponsors the whole show, but each ad is different. Featuring John Michael Higgins in the fictional board room of a generic cable company in panic, these ads deliver. They’re so funny they actually make me wish that satellite TV wasn’t headed for the sidelines.

But brilliant touches like these are few and far between. Again, I’m asking you: is online TV advertising in danger of failing to support this fledging new medium upon which so many millions of us have become dependent?


Sezmi opens the door to a new kind of set top box

January 9, 2009

I have written a lot over the past two years about the future of the set top box, both on the cable and satellite side as well as on the consumer retail side. On the consumer retail side, there are boxes that are designed to simulate the cable DVR experience like those sold by TiVo (and as announced at CES this week, by Digeo). And there are those designed to provide over-the-top video experiences like the Roku Netflix player, the Apple TV, and the like. 

Though TiVo has tried to provide the best of both worlds — its DVRs can play a wide variety of over-the-top content from online streams to Amazon Unbox video on demand — because it requires a cable subscription, it ends up feeling like a more expensive version of cable.

So far, no one has seriously offered a DVR that doesn’t require cable or satellite service, even though 60% of what people watch is offered for free, over the air, via antenna. And in most major markets, it’s broadcast in HD.

Let’s do some thinking: imagine a DVR that pulls down CBS, ABC, NBC, FOX and PBS from the air, in HD quality, so you have continuous access to the vast majority of content you are interested in. You pay no subscription for this content. And because you’re one of the 62% of US households with broadband, you also have access to millions of online video experiences, some of which are free and others — like Blockbuster OnDemand and Amazon UnBox — are pay-per view experiences that are at least as good as what cable offers, with the extra advantage that they can be managed with a PC.

This DVR could be sold at retail for a few hundred bucks. It would carry no subscription fees and for at least 20% of the population, it could replace cable. Only the people who have to have Showtime and HBO would be left out in the cold, as long as ESPN, Discovery, and CNN keep putting so much of their content online.

Welcome to the world of Sezmi (as in “open Sezmi” — cute, eh?): an over-the-air DVR that adds online video. And if my estimations are correct, you’ll be seeing Sezmi sold by major retailers later this year.

sezmiThink about it — for those of us who spend $100 a month on cable, wouldn’t Sezmi’s value proposition be a great relief? That’s what Sezmi is banking on and the retail partners it’s in hushed conversations with here at CES. I sat down with Sezmi yesterday in their private suite at the Venetian (much nicer than my discount room at the Sahara, I’ll confess). This is a company I’ve been following since they were just a rumor in mid-2007 and were called Building B. They re-branded as Sezmi in 2008 and I last met them at NAB last year where they talked about offering their set top box to tier 2 telcos as a way to compete with cable without having to lay miles of fiber. At the time, I told them that the telco solution was nice, but that I thought they stood a chance of offering this box at retail and that 20% of the population would be interested. That’s 22 million households. That’s more people than have an iPhone. In other words, it’s a target worth pursuing.

Imagine how pleased I was yesterday to hear that they are pursuing both avenues aggressively — working with telcos as well as going straight to retail. I have no doubt we’ll see the boxes in retail later this year. And I’ll be one of the first customers in line. In my case, I won’t be replacing cable, I’ll be adding TV to another room of the house that currently doesn’t have it. That’s a use case I haven’t even modeled and would potentially open a much bigger target audience. Even those economics are attractive, because the additional DVR in my spare room would run me $14 a month — more than $150 a year. One Sezmi box, even if it were priced at $300 would pay for itself after two years of use.

This is Sezmi’s potential even without considering the very elegant consumer interface their box offers or the potential solution they have to solve the ESPN, Discovery, even Showtime problem over time.

Too bad Sezmi wasn’t in retail for this past holiday season. In the words of one retailer who is in talks with Sezmi: “If we had this thing in stores last October as the recession hit, we would probably have 5% market share right now.”

Agreed.


Economy watching: Comcast earnings waaaay up

November 4, 2008

Tracking the economy has been a thankless job lately. Things go down, you draw conclusions, things go up, you draw different conclusions, then things get all messy again and all bets are off.

But one thing will hold true in this recession: consumers love them some video, preferrably free video.

I wrote about this in a Forrester Report which I blogged about recently. Which is good for online video, and probably even good for cable generally. However, I did have some warnings to offer cable companies which are future oriented — that consumers will shy away from premium content packages and premium tech for the home (like multi-room DVR). Because of that, you won’t see the effect of the recession on this quarter’s earnings. So I may yet prove right in a way that affects cable’s financial performance. But for now, things couldn’t look shinier for one Comcast.

Betsy Schiffman captured this nicely at the Epicenter blog on Wired.com last week in what is definitely going down as one of the best titles ever:

Cockroaches and Comcast Will Inherit the Earth

Her clever reference to the fact that cockroaches are suspected of being able to withstand just about any devastation that we could wreak on the planet, may overstate the case for cable a tad, but only a tad if you consider that Comcast CEO Brian Roberts was able to report on beating earnings per share estimates by a full 4 cents, and seeing a 38% rise in profits over last year. 

The point here is that cable holds most of the right cards for surviving the digital video transition. As long as it plays them right. In the case of Comcast, one of those cards is very strong financing from their own operations. No need to go out to get cash in a credit-squeezed market. That’s a great hand to have right now as economic ups and downs continue their game of ping-pong.


Samsung adds Netflix to latest Blu-ray players

October 23, 2008

We’re witnessing the one dramatic change in the world of physical media. Now Samsung has joined LG in making Blu-ray players that also stream Netflix movies and TV shows. This Netflix strategy is the little engine that could:

  • People first said it was weak because the content was so second-string. Netflix has recently fixed that by adding Starz and some Disney movies. 
  • Some complained that a dedicated $99 box from Roku (though priced to sell), wasn’t enough to move the market. However the LG Netflix/Blu-ray player showed that there was real depth to the strategy.
  • The deal with Microsoft’s Xbox 360 to put Netflix content in the game console proved there’s a true multi-platform play there.
  • Now Samsung’s entry shows that this is going to become a big deal across multiple players in the CE and computing world.

Lessee, Netflix 4, everybody else, 1.

With Steve Jobs again this week referring to the Apple TV as a “hobby” in order to downplay previous expectations, this leaves Netflix clearly in the driver’s seat when it comes to over-the-top delivery to the TV. Maybe not in volume yet, but it will.

The biggest issue here is what this means for cable. Netflix has set its sights not on Blockbuster or even on iTunes, but on Comcast, Cox, and Time Warner. The Netflix solution pulls content automatically from your DVD rental queue, provides an easier-to-use interface than VOD, and now has as much good content as a typical VOD system, this makes cable cord-cutting that much more possible.

This Netflix move could prove to be the most important wildcard of 2008. Now if only there wasn’t a recession hanging over these Blu-ray players

Are you Netflixing your TV? Will you? Do tell.


Cutting the cable cord, Part 2

October 13, 2008

This topic keeps coming up. I wrote about it recently and have been hearing more and more from people who do it about how they pull it off. The most common solutions are, in order:

  • Hulu + ABC.com + CBS.com. That covers most of what people watch on TV.
  • Netflix (especially if you have a Roku box, Xbox 360, or directly connect the PC to the TV)
  • iTunes (as one guy said to me, “I spend $10 a month there to get the few things I can’t get elsewhere, still way cheaper than cable”)

And now the newest member on the list, as I wrote recently, the SlingCatcher. (Brent Harrison of SmokeJumping blog agrees here.) By the way, I was surprised the press didn’t really pick that aspect of the SlingCatcher up.

We’ll see if Sling can sell enough in a down economy to have its promised impact.

What about you, what are you doing to cut the cord? If you’re not, why not?


Comcast offers free basic cable during digital TV transition

October 9, 2008

Okay, if you read the release you’ll see that it’s not free for everyone. You have to be someone who isn’t getting cable or satellite TV today and you have to sign up for either telephone or internet service from Comcast. But the point is, if you’re one of the 13 million homes Comcast says has analog TVs and no TV service today, you can avoid the hassle of upgrading your TV or getting a digital-to-analog converter box when the analog shutdown happens in February of next year.

Let’s back up for the people who aren’t as nerdy as I am (most of you) and don’t know what in the world I’m talking about (again, most of you). On February 17th of next year, television broadcasters will cease their analog over-the-air broadcasts in favor of digital broadcasts that use spectrum much more efficiently. Translation: that frees up gobs of space for more advanced video and communications services, the kind Google wants to provide to you. 

With this shutdown, analog TVs using rabbit ears will suddenly become blind. (A recent test of the shutdown in Wilimington, NC was either a modest success or a potential failure, depending on who you listen to.) That means between now and February 17th, there will be a lot of efforts to take advantage of this transition to:

  1. Sell digital TVs. This has been commonly perceived as the most straightforward way out of the problem. We tried to give our 36″ Sony analog TV away (nice one, too), but couldn’t convince people it would still work after February 2009. The fact is, if you get a digital TV, you can tune into a digital over-the-air signal, end of story. However, even with prices falling fast over the last two years, digital TVs are still going to seem expensive in an economy like this one (more on that later, I’m writing a Forrester Report about the economy’s effect on this market).
  2. Get people to upgrade to cable or satellite service. This is obviously Comcast’s goal. Little understood is the fact that if you sign up for Pay TV service, the question of digital vs. analog is settled for you: Pay TV providers can output their content to whatever device you want. Even my digital cable box has analog and digital outputs on it, making it ready for any kind of TV, even after February 17th. 

Seen in this light, it’s interesting to note that Comcast — in a position to make money from this transition — hopes to aggressively give its basic cable service away.

I recently spoke to Derek Harrar, GM and SVP of Video Services at Comcast about this plan. He’s an intensely focused guy, I guess you have to be when you’re in charge of video for the country’s largest cable company. I told him what I’ll tell you: This is a smart move for Comcast, a “path of least confusion” strategy. There’s already so much confusion out there on this topic that making it simple is a wise path. Let people keep their TVs, their remotes (since basic cable doesn’t even require a set top box), and only ask them to change phone or Internet service. Much simpler than getting a government voucher for a discount off a digital to analog converter box. (Call it food stamps for video — TV stamps?).