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Xbox Does IPTV – It’s Official

Microsoft (MSFT) just announced that on November 22nd the Xbox 360 will allow users to purchase and rent high definition television and movies. I made this call back in January of 2006, and repeatedly since then (search this site for Xbox IPTV).

Engadget has the details. WSJ reports here.

It is abundantly clear that the center of power in video content distribution is moving from Cablecos to next generation set top boxes using high speed broadband connections.

In the absence of incumbent Cablecos unbundling the content, new providers of set top boxes will.

This is fundamentally why cable companies are over valued, and operators of content platforms (like Microsoft, Sony (SNE), Apple (AAPL) and Tivo (TIVO) ) superbly positioned.

It is the basis for why I think Cisco (CSCO) overpaid for Scientific Atlanta, an operator of legacy hardware tied to the fortunes of the incumbents. From January 2006:

As each day goes by, the Scientific Atlanta (SFA) shareholders who complain $6.9BB wasn’t enough for their commodity box company should shut up and cash their checks. What would you rather provide to subscribers as a cable operator- an Xbox 360 or a glorified radio tuner for video?

Apple will need to ensure their platform supports HDTV, as I postulated earlier.

First impression of the Apple iTV media extender– what marketing guy cooked up the term ‘near-DVD’ quality? What does that mean?

If I am going to go through the trouble of buying and provisioning a media extender for my TV, it better do HD. The venn diagram of people who will go through the trouble to install a media extender and don’t care about picture quality is a null set.

Their silly “near-DVD” marketing description will no longer fly.

Tivo, among other problems, has now completely lost their potential first mover advantage. It will be interesting to see what tricks Sony has up it’s sleeve with the PS3.

If you thought the loss of fixed line voice was giving Telcos a hard time, wait until you see what these new platforms do to Cableco revenue streams.

More later. This was such a big piece of news it needed immediate comment and distribution.

Photo Courtesy of Engadget

Discussion

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  1. I’ll wait to see what I’m going to get from the Xbox and MSFT. If it works anything like Windows, it should be still evolving when the CableCos are out of business.

    Posted by DC | November 7, 2006, 4:52 PM
  2. time for a high speed connection
    at 1.5 Mbps it will take 6.6 hours to download the 4.5 GB HD version. Step up to 5 Mbps and it is not bad, probably just a short time to buffer and you would be good to go since total download time should be similar to the length of the movie at that point. This is one of many coming killer apps for FTTP / FTTP.

    As I understand it, Tivo specializes in predicting what you would want to watch based on previous viewing. (Is that correct? I am too cheap to buy one.) If so, that would allow them to do a good job of caching the first few minutes of the movies you are likely to watch, thereby eliminating the buffering time for reasonably fast connections.

    Posted by Paul Warner | November 8, 2006, 2:21 AM
  3. Yes, I have had the same thoughts about Tivo. Amazon does a good job too. I’ve given up on Tivo mgmt as they appear to be directing the company upmarket, a move I disagree with.

    Posted by Andrew Schmitt | November 8, 2006, 8:11 AM
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