Internet Set-Top Boxes: What Do Users Want?
Reed Hastings, the CEO of Netflix, recently described his company in the following words: "By every measure, we are now primarily a streaming company that also offers DVD-by-mail." It's a statement that shows the shifting way in which Americans choose to get their entertainment. To support that trend, this holiday season will see a wide range of options for bringing the Internet into our living rooms.
Some of these products are new, some have been around for a while but never gained mass appeal. Some are very narrowly focused, like the new iteration of the Apple TV, while others are practically computers in their own right. In fact these differences can almost be narrowed down to three general philosophies, each of which will appeal to a different segment of the population. (See also Google TV vs. Apple TV vs. Roku: Set-Top Box Smackdown.)
Just deliver the content please -- First up are devices like the Apple TV and Roku's line of streaming media players. These devices are focused on accomplishing a single task: delivering content to your TV. That content may come from a handful of sources (Netflix, Amazon on Demand, iTunes, YouTube, last.fm, Flickr, and even your own PC or Mac), but that's all their designed to do. This may seem limited, but it results in a device is both affordable ($99 for an Apple TV and Roku devices starting as low as $59) and easy to use (a basic remote and easy-to-navigate interface). For those that just want media content and nothing more (no apps, web content, or even recommendations) and don't want to spend that much, these devices are perfect.
I want it all -- At the opposite end of the spectrum are creations like the new Google TV platform (like Android, the devices are made by other companies) and the new Boxee Box. Devices like this assume that you want access not just to streaming rental and subscription services but to the Internet as a whole -- complete with the web, access to a range of free video and music, to RSS feeds, Twitter, Facebook, program listings, and apps that extend the capabilities even further. The result are devices that are more expensive (the Logitech Revue with Google TV costs $299 and the Boxee Box $199) and more complex to manage (remotes for both include a QWERTY keyboard) - but with a much broader range of entertainment options from the every-day to the esoterically geeky.
Add the Internet to something else - Somewhere in the middle are devices like TiVo, Xbox, and LG's range of Netcast TVs and Blu-ray players. These devices have their own primary purpose (advanced DVR features, gaming, Blu-ray movies), but add access to Internet content along the way. They're generally a bit less broadly focused than the Apple TV or Roku boxes, but they stop short of full-on computer-like capabilities. But rather than simply being a middle-of-the-road solution, they have a unique appeal to them because they integrate multiple function. After all, if you're going to buy a Blu-ray player anyway, why not get one that offers access to online content like Netflix? It's likely cheaper than two separate devices and if it isn't, it'll only use on set of inputs on the TV and sound system rather than two.
It's too early to see if any one of these approaches will dominate the market and force the rest into obscurity or obsolescence. My bet is that they'll all do well because they appeal to different mindsets of consumers. If you're in the market to expand your home entertainment options, however, it makes sense to really determine which mindset you have and what it is you want from the outset.