Among all MVPDs, Comcast (NASDAQ: CMCSA) will be most impacted by HBO's decision to launch an over-the-top service.
So says media analyst Alan Wolk, now writing for The Diffusion Group.
In a memo sent out last week, Wolk said most pay-TV operators are becoming strategically adverse to supporting set-top boxes and are okay with any service that migrates out of STB confines.
"Most MVPDs want the STB to go away," he wrote. "They are dated, difficult (if not impossible) to update, unreliable, and the primary reason so many people complain about their pay-TV operator. Worse still, an MVPD spends $200 or more to roll a truck every time the STB goes on the fritz or when a new box needs to be installed. Installers are unreliable, customers get angry, and the MVPD ends up looking bad--it's a no-win proposition for the operator and mess-in-waiting for the subscriber."
But while other operators are okay with a "BYOD" (bring your own device) scenario, in which customers buy a Roku, Apple TV (NASDAQ: AAPL) or Amazon (NASDAQ: AMZN) streaming device and the operator merely supplies an app, Comcast is not, the analyst explained.
"Comcast wants to control the interface for everything, preferably using its X1 and X2 set-top boxes," Wolk wrote. "It wants to create a standard for the industry and sell X1 and X2 to its peers, creating a Comcast-centric universe that gives it control over the box and all the data that comes with it. If need be, the STB can also incorporate streaming services like Netflix and Amazon (having to constantly switch inputs to watch those services is a key consumer pain point), though it will undoubtedly remain the center of a tightly-controlled universe that Comcast has to manage and maintain."
Wolk, however, might be jumping ahead a little in terms of pay-TV's attitude regarding set-tops. While other MVPDs, namely Dish Network (NASDAQ: DISH), are experimenting with app-based delivery of pay-TV services, most operators are still battling programmers for the so-called "network effect" via proprietary devices.
Meanwhile, Comcast competitors like Charter Communications (NASDAQ: CHTR) are adopting strategies based on lower-cost STBs, but those strategies don't seem to imply the actual ditching of the STB anytime soon.
- read this TDG Research report
Bewkes: HBO Now exclusive to Apple because of tech giant's marketing savvy
HBO Now to launch exclusively on Apple TV, iOS devices in April
Apple-HBO deal challenges Amazon, Roku... for now