Thursday, October 25, 2007

The Second Box

As I go around the autumn speaking circuit predicting the demise of the set top box, I think it's still worth reflecting on the concept of the second box.

The majority of TV viewers use an STB of some kind, so incumbency is strong and IPTV companies only seem to have made inroads in places where the current STB service was expensive or poor (Southern Europe, US).

So, is there scope for a second box ? Players like ITVN have struggled in the market despite being brave pioneers, Tivo have never made any money despite their profile and Slingbox had an interesting twist on the second box functionality before being snapped up by EchoStar.

The latest kid on the block is Vudu, who are taking on the likes of Blockbuster, plus the cable and satellite companies with their box giving access to 5,000 movies. The trouble is, as services like Netflix, Lovefilm and even Amazon would, I'm sure, confirm being caught between the studio minimums and royalties and the cost of promoting and attracting users to the service, this is one tough business to get into.

Another twist on this model is the narrowcast second box - a box dedicated to a single subject and enhancing the capability of the main box.

In any case, the market for the second box is a transitory one and the ability to make money from it is limited,

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