Why You Still Can’t Ditch Your Cable Box

Today, the vast majority of customers still need to rent a box to get full service from cable providers, and often-promised box-replacing apps remain elusive. Here's what happened.

NEW YORK (AP) — Not that long ago, the clunky cable box looked like it was on its way out. The federal government was pressuring cable companies to open up their near-monopoly on boxes to more competition, and industry leader Comcast promised apps that could render some boxes obsolete.

That was then. Today, the vast majority of customers still need to rent a box to get full service from cable providers, and those box-replacing apps remain elusive. Here’s what happened.

DITCHING THE BOX

In 2015, tech companies and consumer advocates were pushing the Federal Communications Commission to open up the cable-box market. The goal was to let you buy a cable box the way you’d pick up a new smartphone, sparing you the expense of leasing them from cable companies for about $6 and up a month.

The cable industry and Hollywood hated the FCC’s February 2016 plan to “unlock the box.” They pointed out that TV-watching apps were already available – more on that below – and laid out an industry proposal for new apps that could replace cable boxes.

Amid industry pushback, the FCC’s proposed rules languished ahead of the 2016 election. Afterward, President Donald Trump’s new FCC chairman, Ajit Pai, shelved them permanently.

BRAND CONNECTIONS

The industry is no longer pushing its app proposal with the FCC, said Brian Dietz, a spokesman for the cable lobby group NCTA. And he noted that some cable and satellite companies have launched apps that let customers watch video without a cable box.

WHERE, OH WHERE, ARE THOSE APPS?

But most cable TV customers still need a box. The industry has little motivation to get rid of rented cable boxes or to keep its promises without pressure from regulators, said John Bergmayer, senior counsel of the public advocacy group Public Knowledge, in a filing to the FCC.

In 2015, Comcast launched a box-free cable service in Boston called Stream, designed for phones, tablets and computers. At the time, the company said it would roll out to all users by early 2016.

Stream, however, remains limited to Boston and Chicago, although Comcast reportedly intends to relaunch it as a broader “Instant” service before the end of September. The company says net neutrality rules and regulators under the Obama administration hindered Stream’s rollout. It wants the FCC to spike these rules , which bar internet providers from favoring their own content.

Comcast also said in April 2016 that it was working with Roku and Samsung to develop apps that, later that year, could replace cable boxes. And it did start testing a Roku app in January, although customers still need a cable box while the service is in “beta.” One more drawback: Using the Roku app won’t be free if customers want it to work with more than one TV.

The Samsung app, meanwhile, remains under development. Comcast wouldn’t comment beyond blaming net neutrality for the delays.

In 2015, Charter and Time Warner Cable started offering apps that could replace cable boxes in some markets. Nearly two years later, Charter says it’s now “testing” a cable-replacement app, Spectrum Stream. (Charter bought Time Warner Cable in 2016.) The app is available in New York City upon request; during a recent inquiry, a customer service rep pushed a more expensive traditional “triple play” TV, internet and phone package instead.

CABLE-BOX FREE TV GALORE

The cable lobby is right to point out that there are plenty of box-free TV apps available. They’re just not really aimed at the 94 million traditional cable and satellite customers.

“Cord cutters” have lots of options for internet video beyond Netflix. Online-cable services from Dish, Sony, Hulu and YouTube let you watch live TV and record it for later. (AT&T’s DirecTV Now’s DVR hasn’t launched yet.)

These services don’t fully replace traditional cable service. Major channels aren’t always available, there have been some service quality glitches, and they’ve only attracted an estimated few million subscribers.

To watch internet-based TV on a TV, you probably need a gadget like a Roku, a Chromecast stick or Apple TV. These don’t have monthly fees like cable boxes do.

COMCAST: THE BUNDLE EFFECT

Even without these consumer-friendly apps, Comcast has been able to draw video customers via its upgraded cable-box system, X1, which has integrated Netflix and is expected to add YouTube. It is also a master at getting customers to pay for more than one service.

In the second quarter, Comcast lost 34,000 video customers, a deeper loss than last year. It added customers for the full year in 2016, its first annual increase in a decade. Overall, cable and satellite TV have lost 4 million customers over the past two years, says research firm SNL Kagan.

Comcast’s internet customers rose 175,000. Revenue from the internet arm could get a further boost if Trump’s FCC rolls back net neutrality rules, as expected. Comcast is also opening new lines of business, such as a new cellphone service that started in May.

The film and theme park businesses in the NBCUniversal arm also grew sharply during the quarter.

Net income rose 24 percent to $2.51 billion, or 52 cents per share. Revenue increased 9.8 percent to $21.17 billion.


Comments (7)

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Julien Devereux says:

July 27, 2017 at 11:07 am

I ditched my cable box YEARS ago. I got an antenna and told Comcrap to f off.

Scott Cote says:

July 27, 2017 at 1:29 pm

Thanks for providing us with that terribly pertinent information.

Veronica Serrano Padilla says:

July 27, 2017 at 3:34 pm

The real issue has been competition in the set top box market (or the lack thereof). Traditionally, two companies have monopolized the set top box market, keeping prices higher. While that has changed somewhat, many cable operators still only have few choices of technology providers.

Ellen Samrock says:

July 27, 2017 at 6:12 pm

This article makes little sense given the current state of technology. An antenna and a Roku device are all that is needed to get any and all desired programming–even in rural areas. I haven’t had a “cable box” in six years. The day will soon come when cable companies will be nothing more then a wire into the house and a modem. The real losers will be the satcasters unless they bought spectrum at auction. Their current business model is rapidly heading south without them.

    Veronica Serrano Padilla says:

    July 27, 2017 at 7:15 pm

    Fair points. But people like their channels in a comfortable, well-designed guide and increasingly want to record shows found on their linear channel lineups. While ATSC 1.0 addressed show descriptions and channel guide well, Roku is an absolute disaster at this. The interface – despite recent improvements – is clunky and natively can’t do a simple information overlay graphics telling what show is currently playing. And there is no “TV Gude” type grid of program listings (**some developers have done this through coding on their own apps, but it is not implemented across multiple apps – say if you subscribe to different OTT packages). Additionally, recording isn’t natively possible on the Roku (**some apps may use cloud recording, but only in that particular app). Modern cable set top boxes do have all of these features and more — most notably recording of shows which are available for viewing throughout the household using client set top boxes. And nowadays modern set top boxes are including apps like Netflix directly in the interface — no need to switch sources, power on (let along buy) another streaming device. Some set top boxes can even stream live programming to smart phones and tablets within the home (**all channels, not just sparse TV Everywhere fare). The point is, consumers like a comfortable, well thought out interface, and even though consumers complain about what they pay monthly for a set top box, the majority still find the functionality useful.

    Ellen Samrock says:

    July 27, 2017 at 8:33 pm

    Since Roku is VOD, it pretty much eliminates the need to record anything. On those very rare occasions that a show being broadcast live needs recording, a DVR such as the one from Channel Master does an excellent job.

Cheryl Thorne says:

July 28, 2017 at 7:18 am

THis guy writing this must have been in a cave the last 10 years..Oh right he works for the AP ..that explains it!!!
they still use Fax machines


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