Xbox Live Challenges Cable Box
From The New York Times - Monday, December 05, 2011
By NICK WINGFIELD and BRIAN STELTER
The old-fashioned cable television set-top box — long the hub of living-room entertainment for most people — is about to become less relevant.
Beginning on Tuesday and continuing through the month, Microsoft will give a face-lift to its Xbox Live online entertainment service that will allow subscribers to watch a wide array of mainstream television programming from the Xbox 360 console.
In addition, rather than fumbling with traditional remote controls and the primitive program guides of cable boxes, Xbox Live users will be able to search for shows using voice commands and hand gestures, if they also have the popular Kinect peripheral for the Xbox.
Later this month, Microsoft will begin adding dozens of other sources of programming to the service, including Verizon FiOS, Comcast’s Xfinity and HBO. On Tuesday, the few online video services that have been on Xbox Live for some time, including Netflix and Hulu Plus, will be able to be retrieved using voice searching and other methods.
Microsoft’s deal with cable and content providers stops short of making it possible for people to ditch their traditional pay-television packages; people will still need to pay the cable providers to get channels through the Xbox. They will also have to pay the roughly $60 a year Microsoft typically charges for a premier membership to Xbox Live.
And the Xbox won’t be a true substitute for everything viewers can get through their cable boxes because content rights will have to be negotiated for some shows before they can be watched through the console.
But the agreement is nonetheless significant because there are more than 35 million worldwide subscribers to Xbox Live, making the Xbox one of the most common Internet-connected boxes in living rooms. And it is part of a growing effort by media companies to bring some 21st-century pizazz to the experience of navigating and watching television, a medium that is largely watched using traditional remote controls and set-top boxes that have changed little in the past 10 years.
Most cable boxes require viewers to navigate through primitive on-screen program guides, pressing buttons on their remotes to scroll through the vast lists of shows. The process is especially jarring for a generation of people who are accustomed to the slick graphics and responsiveness of more modern devices, like the Xbox and the iPad.
“The user experience through traditional cable set-top boxes hasn’t kept pace with the kind of user experience people get from all these other devices they use throughout the day,” Tom Rogers, chief executive of TiVo, said.
With the update coming this week to the Xbox, all of the video available to users over the Xbox Live service from all of Microsoft’s media partners will be indexed, so people can search for programs using their voices and the company’s Bing search engine, instead of awkwardly tapping out search terms through remote controls pointed at cable set-top boxes.
In a demonstration of the technology last week at Microsoft’s headquarters in Redmond, Wash., Michael Suraci, director of marketing for Xbox Live, told an Xbox to “Bing Sandra Bullock,” which promptly found “The Blind Side,” “Crash” and several other movies starring the actress that were available through various sources of video on Xbox Live.
Mr. Suraci also used a sequence of voice commands to switch to an app for Verizon’s FiOS TV, within which he could flip among live channels by using more voice commands or a swiping motion with his hands.
“I think it’s a much, much better experience to use voice than typing,” said Marc Whitten, corporate vice president of Xbox Live.
Mark Greenberg, chief executive of Epix, a company that streams films from Paramount, Lionsgate and MGM, raved about the voice search and hand-gesture capabilities of the Xbox. Epix will stream a library of about 3,000 films through the Xbox.
“Maybe it’s the beginning part of the process toward eliminating the set-top box,” Mr. Greenberg said, while adding that he did not expect the traditional box to go away completely.
Cable executives have conflicting attitudes about the set-top boxes. Many acknowledge that they seem outdated compared with other forms of consumer electronics, and realize that consumers have trouble using them, especially as more video becomes available. “It can be frustrating to consumers to be entitled to content and have difficulty finding it,” said Samuel M. Schwartz, an executive vice president of Comcast who oversees emerging Internet businesses.
The Xbox, Mr. Greenberg said, “is an opportunity for the cable industry to experiment.”
Executives would also love to get rid of the cost of buying and deploying the devices, even though their customers typically pay an extra monthly fee to lease the boxes. Among the most vocal about getting out of the set-top-box business is Glenn Britt, the chief executive of Time Warner Cable, the country’s second-biggest cable company.
“We’d rather not be in the set-top box business, believe me,” Mr. Britt said in an interview this year, calling the boxes cumbersome. “A world without them is a much better consumer experience.”
And yet the devices are an important link in the relationship between cable companies and their customers. That link could begin to weaken though, if the Xbox overshadows FiOS and Comcast as a source of videos. Microsoft, Apple and other online distributors of video could try to start to sell bundles of channels over the Internet, disrupting the traditional cable company model
This fall, channel owners like NBC Universal and Discovery Communications have held talks with would-be Internet distributors like Dish Network and Sony about so-called over-the-top bundles that could allow people to buy packages of shows over high-speed Internet connections. It is unclear how far the talks have progressed, and none of the companies have acknowledged the talks on the record.
For now, the TV apps on the Xbox are not functional enough to fully replace set-top boxes. In the upgrade, which was announced in October, Comcast will offer only on-demand videos, not live channels. The FiOS TV app on the Xbox will have only 26 channels at the outset, a fraction of the hundreds that are available through a set-top box.
That is because “content rights are explicit,” said Joseph Ambeault, a director of product management at Verizon. If an existing contract with channels “doesn’t say you can put the content on an Xbox, you have to go and secure those additional rights.”
The Xbox is just one of many devices, including iPads and smartphones, on which cable operators and channels are making their content accessible. TiVo, for one, has announced a string of partnerships with cable operators to make its digital video recorder available to their customers. Unlike the Xbox, TiVo users get full access to all of the offerings of TiVo’s cable partners, Mr. Rogers, TiVo’s chief executive, said.
He added that consumers were hungry for an easier way to find programs.
“The television is the biggest screen in the house, the most-watched screen,” he said.
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