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[qi:032] The other night I watched “Corpse Bride.” The Tim Burton flick was streamed from Netflix via my Time Warner broadband subscription, though my Linksys router to my Roku box, and from there through an HDMI cable to my television. But I could have watched a different movie on my TV using Time Warner’s video-on-demand service, sent through the set-top box provided by my cable company.
A few years back I couldn’t get movies delivered on demand, unless it was through my cable provider. But now services like Netflix — or better yet, Amazon — provide me with high-definition versions of new releases streamed via my Roku box for about as much as it costs through Time Warner or as part of a trip to the closest Blockbuster. In other words, my PC has become — as it has for so many others — the gateway to much of my entertainment. And that trend is worrying service providers, which don’t want to see their customers switch from paying for a triple-play package of voice, video and data to just data.
Those service providers would like to own the home entertainment experience, especially around video, so they’re trying to prove that they have a lot of offer consumers, primarily in terms of guaranteeing a certain level of service and providing access to content that the web cannot. That’s the carrot, but they’re also beating consumers with a stick in the form of the threat of usage-based pricing. Service providers want to install a residential home gateway that will act as an uber set-top box inside consumers’ homes. It would, in turn, provide a carrier-controlled home network, offering access to content stored on servers at the service provider’s node or central office. Service providers would deliver those services throughout the home using wired standards such as MoCA or HomePNA. For example, Verizon, a pioneer in service provider-controlled home networking efforts, is using MoCA as part of its IPTV deployment, transmitting IP video over a home’s existing coaxial cable.
With such access, Verizon can now offer services such as multiroom digital video recording, which I’ve had to engineer in my own home using a Slingbox and my Wi-Fi network. Since most consumers don’t want to go out and buy a lot of hardware to connect their televisions to their computers, service providers currently have the advantage from a convenience standpoint (plus, the wired network provides better quality). However, new wireless standards and faster broadband access are making it easier than ever for consumers to bypass the cable company or the video/voice services offered by telcos.
In addition to a host of set-top box pure plays, companies like Amimon, SiBeam and even large chipmakers such as Atheros and Intel are backing a variety of wireless high-definition video standards. Amimon’s WHDI standard can traverse the whole house, making multiroom DVR delivered wirelessly possible. And companies like Quantenna are hoping service providers that may end up having to adopt a wireless home networking standard will take a look at their silicon as a way to deliver a better Wi-Fi signal throughout the home.
Many large technology vendors, such as Intel, Microsoft and Cisco, are playing to both sides of the home networking divide, trying to provide tools and products that allow service providers a way to deliver content in a manner that they can control, while also offering technology for consumers to access the content located online. A survey last month by In-Stat found that the average PC home network throughput will increase by more than 70 percent from 2008 through 2013, which shows just how much opportunity there is in offering entertainment outside of the service provider channels.
This article also appeared on BusinessWeek.com.