Interviews with Digital Media Thought Leaders

Internet via Set-Top Box: Fool’s Errand?

Podcast Audio | Posted by Phil Leigh on March 25, 2009

Standard Podcast [5:30m]: Play Now | Play in Popup | Download

Companies developing ways to access Internet Video via a cable set-top box may be on a Fool’s Errand.

Eventually consumers will demand unlimited Internet access on their televisions. But such a scenario is contrary to the perceived interests of CATV operators. They have two concerns. First is that unrestricted access might lead consumers to watch more Internet Video and less conventional television. Second, they want to collect an incremental fee (beyond ISP service) when consumers watch Internet Video on the TV.

Instead CATV operators want the future Internet-Video-to-the-TV circumstances to encompass two characteristics. First, they would like to restrict the Internet content that can be accessed by the TV. Basically, they want to offer a Walled Garden. Second, they want an incremental monthly fee for access to the Garden. It is similar to the strategy taken by wireless carries prior to the advent of the iPhone.

Put another way, the CATV industry wants to isolate ISP service to computers and manage Internet-Video-on-the-TV as a separate offering. Thus, vendors attempting to provide Internet-Video-to-the-TV via a cable set-top box will discover that operators will enforce such a distinction. However, the attempted restraints are a Fool’s Errand because they will be circumvented.

Inevitably the flat-panel TV shall become a dual function device. In one context it will be a TV as we have always known it. In a second context, it will be a giant monitor for a laptop computer or, later, a browser-centric TV. As illustrated in our March 19th video, it can be easier to connect a laptop computer to a flat-panel TV than to attach a cable-set top box.

This enables the laptop to function as an Internet Gateway for the TV. It is also a forcing-factor leading TV set manufactures to eventually make browser-centric units. If they fail to do so Apple may well take the lead in a future “smart television” market by selling units embedded with iTunes and offering an apps platform for free video websites like YouTube and Hulu.

This is Third Generation television.

To learn more click here where you can purchase a copy or our research report or download a free Prospectus.