Time Warner’s Bring Your Own Device TV

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If there’s an insurgency against the traditional set-top box (STB), Time Warner Cable could stake a plausible claim to being the movement’s leader. The cable operator has enabled STB-free viewing on Samsung Smart TVs and has offered an app for the Roku retail streaming box and Xbox 360 game console that delivers Time Warner programming to secondary screens in the home.

Now, they’ve made the insurrection even more explicit. Speaking at a Bank of America Merrill Lynch conference last month, the company’s Chief Operating Officer Robert Marcus said that the operator was close to circumventing the traditional STB altogether.

“Over the course of the next year or so, we will be knocking down some of the current obstacles that are in the way of not just having the TWC TV experience be a complementary service to the delivery of video via the leased set-top box but also a replacement service so that customers can have nothing but a Roku device or an Xbox and get their video experience,” Marcus was quoted as saying.

Much like many corporate IT networks promote “bring your own device” (BYOD) policies that let workers access corporate resources on their personal phones and tablets, Time Warner is floating the pay TV equivalent: the consumer buys the retail hardware they like and, provided they’re both Time Warner TV and internet subscribers, authenticate that hardware to access the services they’ve paid for in the home (they’ll likely still need a headless gateway from Time Warner).

However, Marcus also suggested that this was not a prelude to Time Warner becoming a virtual MSO, reaching beyond their current footprint to court consumers nationwide. “At this point, we don’t really aspire to delivering an over-the-top service,” he said.

Nevertheless, even if Time Warner does not go the “full Netflix” and try to liberate its video offering beyond its current service footprint, the move to further sideline the traditional STB is likely to have major ramifications.

Specifically, the industry will undoubtedly be watching to see whether the costs of developing and maintaining an app-based video delivery infrastructure are offset by the savings inherent in not having to stock, install and service as many STBs (presumably the company will always offer a rental box for those unwilling to supply their own hardware). How Time Warner aims to support less tech-savvy customers who may struggle with installing a retail device or downloading apps on their Smart TV remains to be seen.

At a minimum, the experiment could mark the beginning of a slow but inexorable decline in traditional (i.e. operator-provisioned) STB demand in the U.S. and later in Europe as more operators mimic the Time Warner model. The developing world will still fuel demand for STBs, as will late adopters in the developed world who are uncomfortable with a do-it-yourself home hardware set up. But if Time Warner proves that bring your own device is truly applicable to the pay TV world, retail boxes like the Roku and Apple TV would be well-positioned to profit.

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