Slingbox and re-defining economics of subscription services

It is not very often that a new gadget comes along that promises to change the way existing services are viewed. Tivo already had this impact on TV viewership. Slingbox is promising to be another disruptive technology, but for very different reasons.  It is also ahead of its time: unlike the DVR which would become an instant winner in the marketplace, limited only by the usual reluctance in adoption of new technologies, Slingbox has fewer applications today.  But it does fundamentally change the way one views their cable subscription.

This becomes clear for those of us with multiple residences or who end up racking up frequently flyer miles for business. It used to be that if one wanted to watch TV in a new place, they needed a subscription associated with that new physical address. That meant your new location, whether it is another home, friend’s place or the hotel room had better have its own subscription via cable or satellite. Slingbox changes that equation: once you have a subscription, the right to watch that content effectively roams with you. If Tivo enabled time-shifting as the contemporary digital successor to the analog BetaMax revolution, Slingbox enables space-shifting in real time. Short of carrying around those bulky tapes, there was no good analog for that in the analog world.

For now this comes in handy in a few unique circumstances: if your hometown team is playing the Yankees and you are travelling on business, chances are the local TV will not carry that game. (Strangely enough the MLB does have a paid online subscription offer for watching games in streaming 350K  video, but it includes black-out provisions based on region for billing address.) Another example involves maintaining multiple residences in different cities. Until recently it was a foregone conclusion that each needed its own cable service, in the same way each one unit has independent electricity and water. But the Slingbox creates an alternative: provided both places have high bandwidth lines, all the content in one location becomes available at the other one. In fact SlingMedia even includes a mobile client for Windows CE based smart-phones. This worked remarkably well on a Motorola Q device, coupled to a Verizon data subscription.

Granted there are significant obstacles. First this requires broadband, which is particularly scarce on the source side. Residential net service in the US has developed on the assumption that consumers need a lot of downstream bandwidth to download those big multimedia files, but very little upstream bandwidth for pushing anything out. It’s debatable if that asymmetry is technical limitation or relic of the mass-media mindset where subscribers sit glued to their TV screens, as the all-knowing broadcasters pipe hand-picked message through their channels. Either way, service providers are not going be too happy about this usage of bandwidth any more than they welcomes P2P swamping their network. Image quality is highly dependent on the available bandwidth during streaming. SlingMedia uses a proprietary streaming protocol, which by itself is not a good thing– using an existing format such as MP2 would help interop and allow for greater choice of applications to use on either side. But the custom protocol has smarts to optimize video quality based on bandwidth use, its redeeming virtue. On the remote side, you still need a computer running the SlingPlayer client connected to a display. Huddling around a desktop PC will do but this is far from approximating the original TV watching experience. Making it one step closer  to couch-potato ideal requires either a full time media-center PC permanently sitting in the living room or a more temporary arrangement  that involves conneting a laptop to the TV– assuming the television is a recent vintage unit with VGA or DVI input.

Biggest unknown may be the content owners themselves. There were rubmlings from MPAA about seeking legal action, but these appear to have calmed, down for the moment. In the near future legal concerns will be the dark cloud on the horizon for this fledgling technology. It may have been a good idea for SlingMedia to have sponsored the EFF Pioneer Awards ceremony at the CFP 2006 conference after all.


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