Cable’s Future Includes Set-Top Boxes, Comcast Executives Say

The cable set-top box isn’t going to disappear anytime soon, Comcast executives told investors Wednesday after the company reported Q3 financial results. “I think there will be set-top boxes for a long time,” said Comcast Chairman Brian Roberts. Though certain aspects of the industry are starting to move away from set-top boxes, “the most exciting products we're working on, that allow you to have tremendous functionality right on the TV, do have set-top boxes involved with them,” he said.

The boxes will persist because they're the best way for cable operators to manage intellectual property rights associated with content they distribute, said Neil Smit, president of Comcast’s cable business. As operators deploy interactive TV technology such as Enhanced Binary Interchange Format, the user-interface found on set-top boxes will be more aligned with that of other devices, he said. “We can work more across platforms, whether it’s the TV, DVR or VOD, and we can have a consistent user interface,” Smit said. The role of set-top boxes may one day diminish, but “I don’t think that’s a binary event that will happen any time soon,” Roberts said.

Comcast lost 275,000 video subscribers during the quarter, which was worse than some analysts had predicted. The still-high number of vacant homes and persistent unemployment, along with many customers leaving Comcast who signed up for promotional rates during the DTV transition, are to blame for the results, executives said. Customers aren’t quitting cable and replacing pay-TV service with online video, executive said. “All our exit surveys have seen almost no impact,” by competitors Smit said. However, a group of customers have left Comcast without signing up for a pay-TV competitor, he said. “That small number appears to be going [to] over-the-air,” he said.

Comcast is confident it can get the rights to distribute cable programming online through its Xfinity TV platform, executives said. “We had this experience when we did free VOD,” said Stephen Burke, Comcast COO. Acquiring the rights was slow at first but eventually it took off, he said. “We think the same thing will happen with TV Everywhere,” he said. “And one of the nice things about the NBCU deal is that it will allow us to speed that up a bit,” he said. “It’s in everyone’s interest to set up an online distribution model based on authentication because the alternative is piracy,” Roberts said. “Everybody is trying to pull in the same direction because of piracy."

It makes sense for broadcast networks to put their shows online free, Roberts said. “The broadcasters would like as many eyeballs as possible for their shows,” he said. But it will be up to each company to decide exactly when and what it will make available online, he said. With its acquisition of NBC Universal, “we have an ability to be a constructive force and ultimately give consumers more access” with new release windows and on more devices, he said. “That’s the strategy we're trying to pursue.”