The Google Set-Top Box

TechCrunch has a pretty interesting write up on this. And of course, it’s not about a settop boxes at all. Think Android For TV, says Erick Schonfeld. Right. Google getting into CE hardware would make as much sense as King Midas getting into copper mining.

Still. With an Android TV, we should finally stop thinking of settop boxes. First of all: what’s an STB anyway?

  • a mostly ugly piece of cheap plastic and some electronics, attached to a mostly beautifully designed displaying device (vulgo: tv set)
  • a crutch, which assists your standard compliant displaying device (we’ve got it all set: NTSC, PAL, DVB …) in descrambling a standards compliant signal, which has been artificially crippled (I mean, protected) by your network operator
  • a wheel chair, to carry yer good olde analogue tube into the 21st century
  • Now, let’s take a step back. There’s this wonderful new HDTV set you just bought. It probably already has more computing power than NASA needed to put a man on the moon. The descrambling part, well, think CableCard 2.1. You just need a card reader, like the SIM card on a GSM phone. There’s no need for a stupid box to be attached to a smart tv.
    And of course, as the history of computing teaches us, the smart tv – if you really want it to become smart – should have something like a nice, stable standardized OS as a foundation. The basics, besides handling all the standard stuff like putting moving images on a screen, would probably be something like

  • intelligent handling of distributed storage: attach an USB-HD. Connect a NAS via W-LAN. Access your network PVR. Get stuff from your PC. Or any othe connected PC.
  • intelligent handling of different networks: all IP, broadcast networks, anything networks. Why should you care?
  • intelligent handling of the user interface: consumer electronics still tend to look like a pre-war (Gulf War I, I mean) game console. And the appeal of retro does have its limits.
  • Now. Forget about storage and networks. The really interesting part will be the UI. Why? Well, Google is in the ad business. And the quantum theory of adverising teaches us: an ad nobody looks at does not exist.
    Now look at the status quo. In one corner, we’ve got the media sales super giant with a market cap higher than the stratosphere. In the other corner, we’ve got the incumbents: cable MSOs, satellite operators, some DSL, and last but not least: the tv networks and stations. Representing the allocation of the largest piece of global media cake. Backed up with a finely interwoven network of legalese and some well greased, age old business relationships. Don’t try to push some interstitials in between their shows. Because that’s exactly the incumbent’s billion dollar business. And a well protected turf.
    So. Where’s your disruptive moment? Your leverage? It’s not that the tv ad sales business is desperately looking for some streamlining.
    Now think UI again. And have a look at the Electronic Programming Guides of nowadays: thick as a brick. TV means: you’ve got time to waste, but no screen real estate to do the same. And what does your run of the mill EPG? It wastes your valuable tv-time AND your screen real estate. Instead of waiting for the scrolling listings of the TV Guide on Screen (late 20th century), now (early 21st century) you click, click, click until you might find (or, most likely, not) the craved for nugget of information. Even worse: with all the computing power in your household at its (virtual) finger tips, an EPG stills treats your grandmother with the same relentless indifference as it treats you. For an EPG, The Weather Channel (TWC) comes just after TCM, because it’s spelled like that.

    Current EPGs are just plain vanilla displayed data. Not even information, because this would imply some intrinsic value. How comes? It’s a structural problem: “Premium” EPGs, which are slightly better, cost you a premium.
    You meaning: the operator. And the question you’re asking yourself (or your market researchers) is: is a better EPG a reason to subscribe? Would it reduce churn? Good question. Your panel won’t be able to answer that. Because they’ve never seen a really good EPG.
    Or you meaning, the manufacturer. Mostly trying to keep cost down, down, down. Because if you want to ship units, it’s a really low margin business.
    Or you meaning: the consumer. Yes, friends of Tivo, if you’re really good, a company might find some handfuls of consumers, paying a monthly premium. But tv is a mass market. Paying premium is not. Therefore, Tivos are the CE equivalent of a Beemer.

    Now how about this. If a well known company offers you (the manufacturer) a piece of software for free (hey, no licensing fees!), which even handles most of the basics things you’re going to have to implement anyway? Maybe you’ll have to add some dollars for hardware. But at least, that’s a business you understand. And it’s still cheaper and it even gives you some leverage with your operator clients. Because it’s not just a better device. There are even some ad revenues the well known company is offering to share with the operator. But wait, there’s more: how about if you (the operator) doesn’t just get a new, incremental business. They’re even throwing in the additional incentive of lowering your cost of operations (it has been nice working with you, Gemstar). And that’s just the beginning.

    Sorry. I got carried away a bit. This wouldn’t be Android TV, but Trojan TV. And maybe, you do not even need the operator that hard. As long as you are in the tv and got a net connection. What the heck. As long as your Android powered TV set chats happily ever after with your Android powered cell phone, filling iGoogle with all the behavioral data it needs to serve you the ads you deserve.

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