No Hulu Plus for Your Cable DVR
Hulu Plus is slated to come to TiVo's Premiere DVR soon — but don't expect it to show up on any TiVo devices supplied by cable companies like Suddenlink, Cox or RCN. Rights holders are resisting subscription-based streaming content being placed next …
Context & Ripple Effects
TiVo has been positioning the Premiere DVR, launched in March 2010 at $300 and $500, as a hub that blends broadcast TV with broadband video, and reporting from December 2009 flagged that the company urgently needs cable operators to survive as it reinvents itself. The Hulu Plus app slated for the Premiere is the flagship piece of that broadband strategy.
The catch reported here is that rights holders are resisting subscription streaming being placed next to traditional cable programming — so TiVos supplied by operators like Suddenlink, Cox and RCN will not get Hulu Plus, while retail-bought Premieres will. That splits TiVo's installed base exactly along the fault line its survival strategy depends on.
First-order effects
- Retail Premiere buyers get subscription streaming while Suddenlink, Cox and RCN subscribers on operator-supplied boxes do not, turning one DVR product line into a two-tier offering differentiated purely by who sold the hardware.
- TiVo's feature roadmap now runs through content licensors rather than through its engineering cycle, since each streaming service added to the box needs rights-holder sign-off that varies by distribution channel.
Second-order effects
- Cable operators lose a selling point for their leased DVRs against the cheaper-feeling retail box, giving them an incentive to push their own TV Everywhere-style offerings or press TiVo for compensation on features their subscribers cannot access.
- Rival streaming services negotiating cable-box placement will price off this impasse — rights holders holding the line on Hulu sets the opening position for Netflix, Vudu and others seeking the same shelf space.
Third-order effects
- If rights holders keep separating subscription streaming from pay-TV distribution, operators drift toward being commodity pipes while services like Hulu own the subscriber relationship — a structural threat to the set-top box as a bundle.
- Resolving the standoff likely requires either rights holders accepting operator-mediated streaming or operators accepting third-party apps wholesale; which side blinks first will shape how pay TV and over-the-top video converge.
The trend: Streaming rights licensing is cleaving the set-top market into retail devices and operator-supplied hardware, forcing rights holders to decide whether subscription video rides existing pay-TV infrastructure.