By Lydia Loizides, Emmy Advanced Media Vice Chair – Research
Imagine if you will capex of $200 million for every 5 million cable subscribers every two years. Internalize that hard-disc storage, while inexpensive to purchase is expensive to deploy and maintain. Think about this statement, “DVR is a training ground for an head-end driven, on-demand content world.” Now, just for a moment, think about the spiral of CE over the last 10 years. And then think about the next most powerful device in the home, after the PC: the game console.
Why? Because I am going to ask you to exercise the suspension of disbelief and consider for a moment that the following is true:
hardware/set-top boxes are too expensive for cable operators to maintain; on-demand is the wave of the future; game consoles are a window to an interim solution to a costly platform problem; technology hurdles for combining networks can be overcome.
Assertion: Comcast should partner with Sony and make the PlayStation 3 an extension of the STB. Sacrilege? No. Pragmatic. Why? Follow the logic:
1. Comcast wants to amortize the STB as long as possible. As with all cable operators, they are going down the rabbit hole of hard-disc space and upgrading boxes – expensive.
2. Sony needs to create value beyond the 13-24 year old male – the need for organic growth is obvious.
3. Comcast needs incremental revenue streams, like games which have proven themselves in the iTV world. The simple stuff that can be generated for the current STBs resonate with consumers – take it to the next level.
4. Sony has a deep and robust library of game titles but limited platform distribution- meaning console and PC only.
5. Sony has experience at retail. Comcast does not.
6. Comcast needs to combat churn. Sony needs new customers beyond their current demo.
So now imagine a world wherein a connection exists between the STB and console and there is broadband connectivity feeding one or both boxes.
See the Sony Games Channel where you can play, on-demand, Sony titles on your PlayStation 3 for $5 a play, or maybe even $30 to “own”. Next, see the advertising spots that come up pre/prost game play and are even part of the landscape. See mom playing Who Wants To Be A Millionaire, 3rd Edition and dad playing NFL Game Day 2004. See all the ROW titles that members of the household have access to? See how Sony saves on physical manufacturing through digital distribution? See how the STB is tethered to the console and can take overage of stored content and act as the central DVR? See how well HD content plays? See how Comcast makes its digital subscribers happy and gives the analog fellows a reason to switch? See the incremental revenue streams being split?
Then again, I could be wrong. But then again, what happens if I’m not?