Ah .. I now get why Andrew bashed Cable Co’s so hard in a previous post 😉
He is spot on … telcos & cable co’s have exactly same problem with the “layered IP network” … they are about to be stuck in the middle layers without the good stuff — “appliances (ie Apple)” or “hosted services (ie Google)”. The cable co’s are doing better today because they have a better network for the appliances & services, but they are not in the “sweet spot” for the future. They are in the middle providing the highway 😦 — iain —
Microsoft (MSFT) just announced that on November 22nd the Xbox 360 will allow users to purchase and rent high definition television and movies. I made this call back in January of 2006, and repeatedly since then (search this site for Xbox IPTV).
It is abundantly clear that the center of power in video content distribution is moving from Cablecos to next generation set top boxes using high speed broadband connections.
In the absence of incumbent Cablecos’unbundling the content, new providers of set top boxes will.
It is the basis for why I think Cisco (CSCO) overpaid for Scientific Atlanta, an operator of legacy hardware tied to the fortunes of the incumbents. From January 2006:
As each day goes by, the Scientific Atlanta (SFA) shareholders who complain $6.9BB wasn’t enough for their commodity box company should shut up and cash their checks. What would you rather provide to subscribers as a cable operator- an Xbox 360 or a glorified radio tuner for video?
Apple will need to ensure their platform supports HDTV, as I postulated earlier.
First impression of the Apple iTV media extender– what marketing guy cooked up the term ‘near-DVD’ quality? What does that mean?
If I am going to go through the trouble of buying and provisioning a media extender for my TV, it better do HD. The venn diagram of people who will go through the trouble to install a media extender and don’t care about picture quality is a null set.
Their silly ‘near-DVD’ marketing description will no longer fly.
Tivo, among other problems, has now completely lost their potential first mover advantage. It will be interesting to see what tricks Sony has up it’s sleeve with the PS3.
If you thought the loss of fixed line voice was giving Telcos a hard time, wait until you see what these new platforms do to Cableco revenue streams.
More later. This was such a big piece of news it needed immediate comment and distribution.
Photo Courtesy of Engadget
(Via Nyquist Capital.)