Digital Hubbub – IEEE Spectrum
Whose box is it, anyway?
The battle for positioning among the would-be hub makers also has crucial implications for the financial, marketing, and legal battles that are likely in the nascent industry. Consider TiVo as a harbinger: consumers buy the current box for $400 (with prices coming down) but then they pay $12.95 a month for the program guide, without which the recorder is useless.
Moxi proposes an even more extreme version: cable and satellite companies would give its digital hub away for free and recoup the cost through monthly fees (much as they now do with set-top boxes). According to Toby Farrand, Moxi’s chief technology officer, one hub plus one wireless extension would cost about $500, roughly the cost of the pair of digital cable or satellite boxes now installed gratis in a typical new subscriber’s home.
Cable and satellite companies would profit from premium services—such as pay-per-view programs that benefit from a video recorder to store shows for later viewing, or from such services as Internet access or music downloading sold on top of the regular TV bundle. The merger of Moxi and Digeo will undoubtedly provide an excellent test bed for this business model since Paul Allen, who controls 75 percent of Digeo, is also chairman of Charter Communications. Charter, a cable company with seven million subscribers, has already installed Digeo software in half a million homes.
Cable and satellite companies who install digital hubs will also gain by having less customer turnover, asserts Orin Whatley, director of sales for middleware manufacturer Metro Link. Why would anyone switch from one cable company to another when returning their leased set-top box might mean losing not only their stored shows and recording preferences, but also the music, videos, and photo albums stored on the box’s hard disk?
As cable TV companies, burglar-alarm suppliers, and even power companies negotiate for space inside digital hubs, Whatley foresees a sort of free-for-all to control a raft of functions also tied into the hub. An electric utility could, for example, manage loads more effectively, even turning off an air conditioner during peak periods. The system would also know when homeowners returned from work, so it could bring the house back to a comfortable temperature by the time they walked in the door.
With networked appliances, a digital hub would also offer new marketing opportunities, continues Whatley. For example, when your new stove registers its presence in your house with the hub and (through the Internet) with the manufacturer, it would be simple to send offers to your TV for an extended warranty or special accessories.
Will consumers be willing to rely on a single box owned by someone else for all their digital entertainment and home networking? Advocates of PC-based hubs, including Microsoft, are betting against it. Instead, software companies like SnapStream and Home Media Networks hope that customers will be willing to dedicate a cheap PC as their entertainment center. Millions of people already have those old oddball PCs in a closet or spare room that can digitize and play back video in real time. And new machines that can do this cost less than $500.
According to Colin Tinto, chief technical officer for Home Media’s ShowShifter software, PCs with clocks of only 600 MHz can store raw video at a rate of about 4 GB/h and play it back in real time. (To save disk space, such a machine could compress video when nothing is being recorded, taking about three hours to process each hour of raw video.) Today’s top-end machines could compress digital video as it comes in.
Media software from Microsoft, for example, can control the video hardware and encode and decode the video. Built-in file-sharing protocols make it easy to record and store video or sound on one computer and play it on another.