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Summary:

Silicon Valley is littered with the carcasses of set-top boxes that were going to revolutionize entertainment. Rather than learning from this grim history, however, some kind of failure torch is being passed from one generation of dying-out hardware makers to a new breed angling to take […]

Silicon Valley is littered with the carcasses of set-top boxes that were going to revolutionize entertainment. Rather than learning from this grim history, however, some kind of failure torch is being passed from one generation of dying-out hardware makers to a new breed angling to take a prize that just isn’t there.

MovieBeam is emblematic of both the failures of video CE’s hardware past, and the futility of its future. After floundering for years, being bought and subsequently killed by Movie Gallery, MovieBeam is now in the process of being sold to Dar Capital for $2.25 million. Is that a bargain or a big waste of time and money?

We’re guessing the latter. The only companies who have shown any success in getting consumers to adopt set-top box hardware for video content on a massive scale are the cable and satellite companies (OK, the telcos are making strong headway, too).

And it’s not like a bunch of no-names have tried.

Akimbo ditched its hardware for software (and then ditched that for white label video). Sling Media saw the light and sold its business to Echostar for $380 million last year. TiVo, for all its success, only has 1.75 million subscribers that it owns and is moving into licensing its interface for other set top boxes and getting into viewer stats.

Apple TV failed in its first iteration and still hasn’t gone mainstream with its take 2. While Vudu has won praise for its system and implementation, it has slashed prices to try and ramp up adoption. And more big names are jumping into the fray later this year. Netflix is making set-top boxes with four different manufacturers, and HP will be launching its MediaSmart Connect device.

Then there’s the new batch of wannabes eager to plug into your TV. Sezmi wants to succeed where MovieBeam failed and is hoping that attaching itself to broadband providers will be its ticket to your home. ZeeVee’s box promises to marry your PC to your TV, and Tribbox thinks open source is its key.

But the truth is, Americans just don’t want to pay for another box for their TV for video purposes. (They will buy game consoles, though, which may be able to succeed at sneaking in video.) TiVo’s beautiful, but my Comcast box works just fine (but please hurry with that TiVo interface). Buying an Apple TV would satisfy my fanboyish technology cravings, but it’s just easier to order a movie through the cable VOD.

And then you have the issue with an entirely new generation of TV watchers who are consuming content on their laptops. Forget set-top boxes, kids these days don’t even need TVs.

Instead of building boxes, how about expanding bandwidth? Or getting more content online?

These warnings and wishes will fall on deaf ears. In a Sisyphus-like fashion, hardware makers will think they have the solution that will keep that rock up at the top of the hill. They don’t. They won’t, and a new batch of boxes will bite the dust.

(Image of “Hardware Wars,” courtesy of Wikipedia.)

  1. Money would be better spent on creating services that are compatible with Game consoles like the Wii .

    With WiiWare launching next Week in the US all content service developers should be looking at developing for the console the penetration rate of the Wii is phenomenal and forget about boxes and Nintendo provide a SDK for the console many Flash game developers are going to be releasing Wiiware games at Launch so why cant flash Video services be on WiiWare.

    Some Developers are already using the Wii Internet channel but that has too many limitations especially only supporting flash 7 .

    http://www.moowee.tv/site/
    http://www.ffwd.com/wii

    Some developers Ive spoken too are concerned they cant do content protection on the Wii or the Wii isnt powerful enough , those concerns tell me they hav’nt researched the console well because Wiiware content is tied to the console/Wii shop account and each Wii has an individual identifier and Nintendo just this past week lauched thier own video channel on the Wii and the quality is quite good surprisingly .

    If you want to develop for the Wii Look here please
    http://www.warioworld.com/apply/wii.html

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  2. They may be popular, but folks like me don’t have any interest in game consoles. Forget about boxes. All we need is wireless bridge between laptops and televisions. Isn’t someone working on that?

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  3. Scott Berry Friday, May 9, 2008

    DivX is. They have a “white label” solution that can be incorporated into just about any device–TV, DVD or BD player, STB, you name it. Already have deals with chipmakers. May mean you have to buy a NEW box, but it won’t mean ANOTHER box.

    Macrovision is also shopping something similar to the cable cos. and STB makers.

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  4. Most people still watch gold ole fashioned TV, and now more than ever it’s high def TV. A set-top box should theoretically succeed, but like any other business venture, it needs to be marketed, promoted, and retailed properly. Movie Beam, et al were simply poor ventures. I think Netflix’s deal will take off. More online content and higher bandwidth will please early adopters, but they are a very small segment.

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  5. STBs that must be leased, cannot be bought, will have a tough row to hoe. We’re not so dumb that we don’t realize this device will be paid for many times over in a couple year’s rent aka continuing revenue stream. That guaranteed stream of dollars that appeals so much to the stockholders has no appeal to me, Al Customer.

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  6. [...] the box is to use, but like many entrants into this game, I don’t think the content justifies spending the money on hardware. But if you’re a heavy believer in Netflix and more content eventually making its way to [...]

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  7. [...] any other Internet set-top box maker. Despite the presence of many deep pocketed device makers, there are none who can be labeled a success. AppleTV is still stuck in the first gear, as far as I am concerned. Paint me skeptical, because I [...]

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  8. [...] written before that cable and satellite companies have a leg up in the set-top space because they are already in [...]

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  9. [...] accordingly. We already had to remove SanDisk’s TakeTV from the run-down, and we know that won’t be the last one to bite the digital [...]

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  10. I definately think there will be massive developments in the next 18 months on the online wii, xbox and PS3 web channels

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