Monday November 8, 2010 – Shelby Cunningham
There is a boom in digital content appliances (DCAs) – set-top boxes that deliver Web-based video to the TV -- sales, but it’s unlikely that the new devices have as much life as discreet products. DCA’s won’t die due to lack of consumer interest, but because of convergence.
Many consumers want the function, they just don’t want to stack yet one more box on their TVs. Lower-priced and better designed DCAs like the new Apple TV may be more attractive than the first iteration of DCAs, but the web-streaming function will likely follow that of Tivo and Sling functions – set up housekeeping in a centralized receiver.
The transformation has already begun with service/function providers like Vudu being snapped up by bigger companies like Walmart. Walmart finally gave us a hint of how it will use Vudu last week when it announced that when you buy the special edition of Toy Story 3 at Walmart you will also receive a free streaming copy of the movie on Vudu.
But why would TV makers and service providers want to include access to these Internet video services in their subscriptions? Because of competition and demand. Service providers have to make it easy for people to access Internet content through their TVs or they might switch to a different provider. Services such as Hulu, Vudu and Netflix are already easily accessible on a number of TVs, Blu-ray players and STBs.
There are other boxes, such as the Roku box, that show no signs of converging right now. But it’s only a matter of time before consumers stop buying them because their home entertainment equipment and service providers have made it easy to watch Netflix, Hulu, Amazon.com and many other Internet video services. The Internet video service providers/box suppliers that get acquired or secure a relationship with a company already delivering TV and video services to consumers are the ones who will last in the long run.
