Meet the Cabal That Wants to Terminate Your Cable Box

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Intel’s grand aspirations to launch a disruptive pay-TV service are dead, but the dream of a modern, more competitive television experience lives on. A cadre of big-name tech companies (and at least one startup) are quietly trying to broker deals with television networks in order to launch cable-like TV subscription packages that are delivered via the Internet. Such services could upend the $100 billion industry with improved user interfaces, tighter integration with digital services like Netflix and increased competition in local markets. Though all these companies have had their pay-TV plans reported on in the past, 2014 could finally be the year a newcomer breaks through. Here’s a breakdown of the primary contenders:

Aereo

The Plan: With Aereo customers can live-stream broadcast networks to their televisions, phones or tablets via the Internet and utilize a cloud-based DVR  to save at least 20 hours of content for later viewing. The $8-per-month service works by storing a farm of dime-sized antennas that are each assigned to individual customers, who can then tune them to the appropriate channel and stream content. The service is mostly for channels that send over-the-air broadcast signals that the antennae can pick up, but Aereo also carries Bloomberg TV and could make deals with other cable channels in the future.

Will it Work? That’s for the Supreme Court to decide. The court will hear an appeal brought by CBS, NBC and other major broadcast networks against Aereo that claims that the startup is essentially stealing their content by selling it to consumers without paying them retransmission fees. The lower courts have sided with Aereo, and a definite victory for the startup in the Supreme Court case would fundamentally change the relationship between broadcast networks and pay-TV operators.

Sony

The Plan: At this year’s Consumer Electronics Show Sony announced that it was launching a cloud-based TV service that would include live programming, on-demand viewing and DVR capabilities. Individual user profiles and a recommendation engine are also planned. Last year Sony reportedly reached a deal with Viacom to carry popular channels like MTV and Comedy Central on the service.

Will It Work? Sony hopes to appeal to its built-in fanbase by selling the service to people who own PlayStation game consoles and other Sony devices. Negotiating a deal with a huge player like Viacom also bodes well. However, the company just posted its first annual profit in five years in 2013, so it’s not exactly flush with cash to cut aggressive deals with TV networks. If a Sony service does launch, its channel bundles may look very similar to those currently offered by cable and satellite operators.

Verizon

The Plan: This week Verizon announced plans to purchase OnCue, the Intel-developed pay-TV service that the chipmaker abandoned after a new CEO threw cold water on the project. OnCue automatically saves three days’ worth of live content for easy viewing later, and utilizes a camera to recognize who’s watching television and serve them up personalized content. Verizon, which already has a small pay-TV service called FiOS, will likely use OnCue to more seamlessly stream content to mobile devices and expand FiOS’s footprint into more markets.

Will It Work? Verizon reportedly paid about $200 million for OnCue, so they’re definitely looking to put the technology to good use. The company also has more than 100 million wireless subscribers to whom they can offer bundles of television and cell service. And they already have relationships with the TV networks thanks to FiOS. But as an already active player in the pay-TV space, they’re unlikely to have the same disruptive tendencies as a startup like Aereo.

Amazon

The Plan: The online retail giant is reportedly in talks with television studios to license their content for a new pay-TV service that would stream live content, according to The Wall Street Journal. The service would be an extension of the Netflix-like streaming service and digital video rental store that Amazon already operates. It would likely integrate with the set-top-box that Amazon is reportedly prepping also.

Will it Work? Amazon has denied that they are planning a pay-TV service. But the company has shown itself willing to lose large amounts of money to elbow its way into other sectors (it spent an estimated $1 billion on its streaming service alone in 2013). The company might offer cheaper TV packages in hopes of enticing customers to buy more products from Amazon’s retail store.

Apple

The Plan: Apple has been trying to finagle its way into the TV industry since Steve Jobs was the CEO but hasn’t yet hit upon a winning formula. Reports last year indicated that the company was in talks with television studios to license content, but with a unique twist: Apple would allow viewers to skip commercials, then compensate media companies for the lost ad revenue.

Will it Work? Apple has never commented much directly on its TV plans (beyond the Roku-like Apple TV device). However, the company is facing increasing pressure from Wall Street to launch another disruptive device like the iPhone or the iPad, despite continuing to rake in massive profits each quarter. A bold push into television might be just the thing to jumpstart the company’s stock price.

Google

The Plan: Google has reportedly been mulling a pay-TV service for years. The company has plenty of experience broadcasting video content through YouTube, where it is currently experimenting with premium channels and live streams of sporting events.

Will It Work? Google has deep pockets, and the company is already edging its way into the living with Chromecast, a $35 device that allows users to stream content from computers and mobile devices to television screens. If the company couples Chromecast with a pay-TV service that people can easily control with their smartphones or tablets, they may hit on a formula that entices people to switch from clunky set-top-boxes and remote controls.

4 comments
DanRayburn
DanRayburn

Apple has no service. Google has no service. Amazon has no service. Verizon's acquisition of Intel's OnCue hasn't yet closed. And Aereo has only rasied $100M. 


So where is the "cable killer"? Year after year, we see articles like this that say some big company like Apple or Google is going to "kill" cable. Do you mean the business that has more than 1B subscribers worldwide? The business that generates more than $1B in PROFIT a quarter for Comcast?


This article doesn't say why any of these companies would get into the pay TV business, doesn't outline the business model for them to do so, doesn't say how they would make money - iy basically says nothing.


And the title is just bait to get traffic when you cram 5 company names in the title plus the phrase "cable killers".


There is nothing valuable in this article, nothing for someone to learn about, no details on the business models etc.

xfields
xfields

A victory for Aereo would fundamentally change the relationship between broadcasters and operators less than most people expect, and only assuming that Congress wouldn't intervene to bring Aereo within the purview of the Copyright Act--something that seems unlikely.


Aereo should prevail on the merits, and Congress should step in--and at the same time, reform the existing retransmission consent regime, which is badly broken, to the great detriment of consumers.


For a comprehensive explanation of the Aereo case, see this:


http://cimc-greenfield.com/2014/01/22/understanding-aereo-part-1/

puniad
puniad

This article may be jumping the gun, but Comcast should be concerned. They may look invincible now but Blackberry looked pretty invincible in 2007. Aereo could turn out to be a disruptive piece of technology/service, and the fact that it has the attention of the highest court in the land, is telling.

In any event, even if the cable tv business is disrupted; Comcast, Time warner etc., still own the 'cables' that Aereo, Apple and Amazon need to sell their services. So cable companies are going to be relevant for a while, even if their 'tv' profits take a hit in the coming decade.