Cord cutters start to grab for the cord

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Ix-nay on the ord-cutting-cay.

That seems to be the message from over-the-top video platforms these days: Cool it with the talk about cord-cutting.

Earlier this week, Boxee, once among the most vocal proponents of cord-cutting, rebranded its Boxee TV set-top as Boxee Cloud DVR, just five months after it shipped.  And as Janko Roettgers noted, Boxee is taking the opportunity to tone down its rhetoric considerably on cord-cutting. On it’s newly launched web site, Boxee likens its device to a TiVo box and a cable DVR — that is, a supplement to pay-TV service, not a replacement. That’s a far cry from last year’s rollout, when Boxee was promoting its set-top solution combining live broadcast content and OTT video as a replacement for cable TV.

As part of the rebranding Boxee is also rolling out a number of new features for its set-top to make it work more like a standard DVR (no more separate log-in via phone or tablet to schedule a recording) and to more tightly integrate it with a home network.

The new Boxee may even be getting downright cozy with cable operators, in fact.

“We’ve had discussions with operators, but haven’t announced anything yet,” Boxee CEO Avner Ronan told CNET. “We are seeing indications that the paid TV providers are interested in third party technology like this. For instance, we’ve seen deals between Xbox and Fios. And Time Warner is working with Samsung to allow streaming to Samsung TVs. So there does seem to be interest in the bring your own device scenario.”

Say it ain’t so.

In fact, though, it is so. For all its rhetoric about cord-cutting, Boxee’s decision last fall to integrate live TV with OTT was already a step toward embracing a more traditional model for TV service, whether Boxee realized it at the time or not.

Microsoft is poised to take an even bigger step. According to a story in The Verge this week, the new Xbox 720 console will be able to take a signal from a cable set-top via HDMI and then overlay a Microsoft UI and features on top of an existing TV channel or set-top box. The set up would be similar to Google TV, which also relies on an HDMI daisy chain to overlay the Google UI on pay-TV service.

Over at GigaOM, Janko is not impressed:

Just a few years ago, Microsoft had grand ambitions for the future of television. The company was looking to start its own virtual cable service which would have competed squarely with Comcast & Co., much in the same way Intel is looking to do now…

Fast forward to 2013, and Microsoft’s big idea for the future of television is an HDMI cable? It’s the ultimate admission of defeat, and it comes with a heavy price: Microsoft puts its integration of live TV feeds into its Xbox  at the mercy of cable operators, which could at any point in time break the integration and make your picture go black thanks to a sneaky little piece of copy-protection technology called HDCP.

It is a workaround, to be sure. But that’s only because there is currently no standardized interface apart from HDMI that would allow Microsoft to design its console to be capable of integrating seamlessly with any pay-TV service (the FCC has been trying to push the industry to adopt a standard gateway for years, so far without success). It isn’t so much an admission of defeat by Microsoft as an acknowledgment of reality (see also Mike Wolf’s take here).

In any case, it’s unlikely a cable provider would have an interest in breaking the integration with the Xbox. OTT has become a prize in the ongoing and escalating tug-of-war between the networks and pay-TV service providers over carriage fees. Each side sees in OTT video a potential point of leverage over the other.

One reason Intel appears to be having success in negotiating streaming rights where Apple, Microsoft, and others failed a few years ago is that it would give the networks a competitive wedge to use against Dish and Time Warner Cable. For their part, service providers have come to recognize that their subscribers are going to be watching OTT channels in any case, and insofar as OTT viewing competes with linear it reduces the linear network’s leverage. So embracing OTT makes more sense then fighting it.

 

 

 

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