In Wednesday’s Senate hearings about Comcast’s acquisition of Time Warner, one of the interesting nuggets of bonus information was that Apple may be getting ready to launch a new set top box.
It’s not clear where this new box fits alongside the existing Apple TV. But it’s especially interesting because last week Amazon announced Amazon Fire TV — and immediately had it for sale on Amazon.com. A few days after later, Android TV was leaked to the tech media. The last few weeks have also seen slew of announcements for new apps for Google’s Chromecast.
That’s a whole lot of announcements about new ways to get content to your TV screen. From big internet brands. All packed into a week and a half.
All at the same time that two of the biggest incumbents in the business-of-getting-content-to-your-TV-screen, Comcast and Time Warner, were making their case to form an even bigger incumbent.
Appropriately, most of the coverage focused a well established narrative – the battle for your TV screen. The timing made it even sexier – in addition to the Senate hearings, the biggest broadcast convention of the year, the NAB Show, kicked off Sunday in Las Vegas. (Coincidence?)
And let’s not forget that in addition to Google, Amazon, and Apple, Microsoft (via the Xbox), Sony (via the Playstation) and Roku are fighting for a share of that TV screen, too.
The battle for your TV screen is real, and it’s a real threat to the traditional TV model. But it isn’t really just about your TV.
In her excellent preview Tuesday of the hearings, GigaOm’s Stacey Higginbotham pointed out that while the talk on the Comcast acquisition of Time Warner is focusing on cable subscriptions, the real battle is over control of the internet.
In a similar vein, I would speculate that the launch of all of these set top boxes for your TV isn’t truly about who controls the TV.
The TV screen is a battleground, but control of the internet is the war.
Broadband providers have generally been for this merger, arguing that it will allow them to build out a faster, higher bandwidth network and provide more services. Edge providers (Netflix, Amazon, Google, Apple) have generally been against the merger, arguing that it gives one company too much control over the infrastructure of the internet and that the concentration of power won’t be good for consumers.
So what do these set top boxes – which Amazon or Google or Apple will use to deliver movies, games, and apps to the TV – have to do with that? Their boxes will still rely on the broadband providers to deliver content to consumers, right?
The edge providers aren’t directly disrupting the broadband businesses of companies like Comcast and Time Warner.
They are putting pressure on the Time Warners and Comcasts of the world by potentially disrupting the cable subscription portion of their business.
If you continue to improve the other ways people can get TV content into their home, you increase the incentive for consumers to “cut the cable.”
And an increase in the cable cutting movement would hurt broadband providers, like Comcast and Time Warner, who are deeply invested in the subscription cable business.
A merged Time Warner and Comcast would have bigger clout and carry a bigger stick. Many consumer advocacy and internet business groups are arguing that it’s too big a stick.
So Amazon Fire TV, Android TV, Apple TV and the like are a reminder from the edge providers of how they can fight back. Small weapons at the moment in the grand scheme of things, because we’re still talking about products that have early adopter appeal, not mass appeal, but the message is clear – they’re going to keep innovating, improving, and applying pressure.
Google Fiber is another example of the ways the edge providers are trying to put pressure on the broadband providers.
Just signs that, merger or no merger, the disruptors are going to keep trying to disrupt. With the interesting twist here being that part of the motivation for continuing to generate disruptive innovation is the fear of being disrupted in turn — by the very same broadband/cable companies they’re trying to disrupt.
Note: The company I work for, The Gazette Company, is an investor in Imon Communications, a cable and broadband service provider in Eastern Iowa. Views here are my own and not necessarily representative of either organization.