It’s fitting that President Obama launched a new initiative to open up TV set-top boxes to competition 20 years after the Telecommunications Act of 1996 because consumers are in for as radical a makeover of television today as they experienced with the transformation of telephone communications back then. This isn’t Kansas anymore!
In the next few years, consumers’ expectations for TV will be radically different, and in a decade, today’s TV will look as antiquated as cordless phones and answering machines look today.
Opening up the set-top box means much more than market competition to lower the price and break the stranglehold that cable companies have over equipment leases that tie consumers to their TV. It means set-top boxes can include other features, such as Google Cast (renamed from Chromecast) AppleTV, Amazon Prime or Roku.
Set-top boxes will be, for at least a brief period of time, the point of integration of streamed television and linear television (the name for regular scheduled cable, satellite and HD over-the-air television). Bluetooth- and Wi-Fi-enabled, supporting TV remotes, smartphones and tablets to search and discover content, the set-top box will become the point of competition for TV content.
Set-top boxes will be inexpensive and easy to install
The set-top boxes will be more than cheap; they will be easy to install. Cable and satellite companies, as well as consumers, despise scheduled installations and repair calls that take up at least a half day. Soon consumers will buy their set-top boxes online or at a local electronics retailer, disconnect the CATV cable from the leased box and reconnect the set-top box with both the CATV cable and the wired or Wi-Fi internet. The set-top box will iterate for a few years until the world says good riddance to the slow cable network. At some point, internet transport will take over, and the CATV connector will drop off like a vestigial appendage.
It also means a lot more cord shaving. The rate at which people shave and cut the cord will go up, decreasing revenues to cable companies from broadcast television. With Netflix investing $6 billion in original content and Amazon investing similar amounts, television content availability won’t suffer. TV news has moved to over-the-top (OTT) content streaming. Sports and reality TV will follow.
The price of internet access will increase. Comcast is already experimenting with new pricing models that cap data below the level that would be needed to satisfy the typical household’s appetite for television if it all were shifted to streamed OTT content. As the cable companies lose television revenues, they will increase prices on internet access where they have little competition compared to television.
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