Last
week, Roku, maker of the eponymous media player, announced its third generation
set-top box. Aside from its redesigned menu, faster processor and new,
headphone-packing remote control, the Roku 3 contained something
potentially significant: an app from Time Warner Cable (TWC).
The app
enables over 300 channels of live Time Warner programming to be streamed over
the Internet to Roku-connected TVs. There's no video-on-demand yet, but TWC
says it's coming. Roku owners will have to be existing TWC subscribers using
the company's broadband modem to enjoy access. It is the first time the company
is allowing its cable lineup to be accessed on a third party connected device,
though it does offer live TV streaming on Apple's iOS and Android mobile
platforms.
Of
course, there are restrictions. You have to be at home to use the app (so no
HBO Go password swapping allowed) and you need to be an existing subscriber
within TWC's service footprint. But there are benefits, too. The Time Warner
video stream gets prioritized – it's not riding over the top like Netflix – so
the video quality is high and buffering issues should be minimized, if not
killed outright. The user interface is also remarkably better than the
grid-style display that greets many of TWC's cable subscribers.
For
secondary TVs, the Roku box is effectively a true set-top box killer (at least
"traditional" boxes offered directly by service providers) – and
herein lies its significance. While many traditional box makers have put their
hopes in gateway/client devices to power them through another wave of growth,
low-cost retail boxes like the Roku represent a real threat, since they
effectively serve as a "thin client" themselves. Throw in a network
DVR, and there's little reason for service providers (or consumers) to invest
in an expensive gateway at all.
Time
Warner's decision to hop aboard the Roku raises other interesting questions
about the future of traditional pay TV networks. Today, only subscribers in
TWC's service footprint can access the app, yet the Roku box is sold
nationally. It's not a stretch to imagine Time Warner offering its content to
Roku customers beyond its service area, even if it couldn't guarantee the same
quality as it does to its current subscribers. Other TV providers, like
Verizon, Dish and others, could follow suit. Live cable TV (with an emphasis on
sports and local news) simply becomes another app, like Netflix, competing for
attention.
And
that raises another, thornier issue for Time Warner: net neutrality. Current
net neutrality guidelines prohibit internet service providers from
discriminating among different content providers. By prioritizing the video
delivery of its own video streaming service, Time Warner is clearly flouting
those guidelines. Netflix has already complained publicly about similar behavior from Comcast.
Yet without such prioritization, it won't be possible to guarantee the quality
of service necessary for the Roku to truly serve as a set-top box replacement.
If the
traditional set-top box hopes to stave off this threat, their best hope may not
rest with innovative new products, but with the FCC.
