Fail Alert: Over the Top Winners and Losers

Updated: My, how much things change in just a few days.  Since writing this, Boxee announced their ship date, November 10th, and the price, $200, which is substantially less than the $300 I’d assumed it would cost.

Boxee has also totally revamped the interface, and will roll out the new look at a gala event in New York that day. The company insists that their product will pass the babysitter test, the essential ease-of-use bar that requires living-room technology to be easily understood by a hormonally challenged teenage girl – without more than a cursory explanation.

The price and the new interface would seem to position Boxee well against Google (NSDQ: GOOG) TV, which is now shipping.  I spent a half-hour with the new Google TV over the weekend, and left disappointed in the interface, the integration and the overall experience. The remote is a mess, chock-a-block with confusing keys, mysterious functions and unnatural pointing surfaces.
It definitely does not pass the babysitter test, and its quirks and high price could turn the first generation into a “hobby” (or a daily Woot! special) more quickly than Sony, Google or Logitech imagine.

It’s a great time to be a TV consumer, especially with so many cool new over-the-top services launching this fall, and into next year. There are many new ways to get TV, but they differ in many ways – both good and bad. I’ve tried most of them, and have strong opinions on which ones will succeed and which ones will fail. Here’s my handicapping guide – which you could take to Vegas if only they let you bet on these services.

Content and Software Services

Netflix:  A clear winner, Netflix (NSDQ: NFLX) is running on just about every platform imaginable.  The company has a strong content focus, and by lining up distribution deals with Paramount and Lionsgate (NYSE: LGF) through Epix, and Relativity Media, it has great momentum. In addition, it is beginning to offer TV shows on demand, often the day after they air on traditional outlets.  A clear winner.

Hulu Plus:  For $10 a month you get access to shows that you can already access everywhere else around the net – along with Bit Torrent. Sure, the company has access to a strong content lineup, but there are too many negatives for me to be bullish here. Hulu’s content partners hate it, Americans are trying to pare down expensive TV services, not add to them, and a straight-up comparison with Netflix leaves the equivalently priced Hulu severely wanting. I’m not bullish on this one

IVI: These guys are a total darkhorse. They’ve built an internet-streamed retransmission of over-the-air networks including PBS, NBC (NYSE: GE), ABC (NYSE: DIS) and Fox, and are attempting to draft off of the landmark retransmission court ruling that let satellite service Dish bring those networks to its far-flung customers. Predictably, the big networks are up in arms, and their lawyers are up in briefs.  Free for 30 days, this one will either go down in flames quickly, or rewrite the television landscape forever. At $5 a month, it is definitely a bargain for many.  But I fear the legal system will shut them down.  Still, this one’s too close to call.

Play On:  This service brings internet video to big screen TVs via a PC, home network and video-gaming console. Given Microsoft’s inability to craft a winning over-the-top strategy with its Xbox, this solution works for many. But in the end it’s too limiting to become a huge success. Still, with an open architecture that lets anyone build channels to support a wide range of video service (including porn), it’s worth a look for many. A niche winner, but a winner nevertheless.

Yahoo (NSDQ: YHOO) Connected TV Platform: it’s been more than two years, and partner Intel (NSDQ: INTC) seems to have dropped out—yet more and more manufacturers keep signing up. The promise here is that content creators can build one application, and then have it work seamlessly across a wide range of flat-screen TVs, including those from Vizio, Toshiba, LG (SEO: 066570) and Sony (NYSE: SNE). It’s a great concept, but could be doomed by its own success. Unfortunately, these days TV vendors are searching for any scrap of differentiation they can grasp – to make their TVs stand out in what has become a fairly commoditized market. I had one industry exec – albeit one pushing a competitive service—tell me last week that the platform would be dead by Comdex, as TV vendors opt to go their own way.  I like the idea, and our Revision3 app looks pretty darn good on those TVs, but this one also is too close to call.

Windows Media Center: If, If, If.  If cable card had become successful, instead of weighed down by Cable Labs’ intransigence. If it were easier to integrate these boxes into your home infrastructure. If Vista had been better overall. It’s a great niche product, but not likely to break through.

Hardware

Roku: The clear price leader, Roku’s tiny box gives you access to MLB, NBA, Revision3, Netflix, Amazon (NSDQ: AMZN) on demand and a long tail of quirky channels. It’s cheap, easy to set up, and simple to use. It faces some formidable competitors in Apple (NSDQ: AAPL), Boxee and Google, but I still think it’s got great potential and a two year lead. 

Xbox 360: It’s a great gaming platform, but the lack of content depth makes this an unfortunate loser in the over-the-top space. Because Microsoft (NSDQ: MSFT) exerts such draconian control over which shows and services can play on the platform (where’s YouTube? Where’s the Zune Podcast library?), it’s never going to be as successful as it might be. And Microsoft’s trademark hubris is on display whenever you talk with the Xbox team – surprising, given how the company is losing on so many fronts to Google, Facebook and (dare I say it), Playstation.

PS3:  Sony’s Playstation has crawled back from the dead to become a real competitor here. The company has great plans to implement a wide variety of services that should make it far more open, and far more accessible than either the 360 or the Wii. I didn’t think I’d ever say this a few years ago, but Sony gets it today, unlike Microsoft or Nintendo.

Boxee: $300 $200 is a lot of money. But the box is super-cool looking, the functionality amazing, and the company behind it chock-full of passionate believers in an open video world. I expect it to sell quite a few over the next year, but in the end expect someone like LG, Samsung or Visio to snap the company up – to add differentiation to their flat-panel lineup.

Sony Bravia: This platform lives on Sony TVs and Blu-Ray players, but seems ready to be overtaken by GoogleTV. That’s smart, by the way, particularly if it can maintain some exclusivity, at least for the short term.

GoogleTV: $300 for GoogleTV seems like a stretch, given that Boxee can do so much more, and the Roku is a third of the price.  Still, we are talking Google here, and after the app store opens up next year, the landscape could shift again. I expect Dish to integrate the GoogleTV technology into its next-generation set-top boxes, and expect at least one more TV vendor to join Sony by mid-next year. It is over-engineered for today’s low-cost hardware, and Moore’s law will make this the platform to beat. But not until late 2011 at the earliest.

AppleTV:  Jobs and Ive (the creative genius behind Apple) missed the boat here, proving that Apple stills think of this space as a “hobby.” The inability to run custom apps, the lack of an app store, and the lack of 1080p support will cripple the long-term success of Apple in this market. Sure, the Apple faithful will buy them in droves, but like the first AppleTV, they will remain mostly unused in basements and bedrooms.  Apple could own the entire chain, from phone to tablet to laptop and TV. But it’s got to “think different” if it wants to succeed here.

Popbox:  It supposedly shipped in July, but the current version is buggy, limited and not ready for prime time. Its competitors are leaving it in the dust. Too bad for what once looked to be a promising platform.

Sezmi: I can’t figure these guys out. The company’s reliance on Over the Air technology makes it less of a pure-play over-the-top service, but the company at least can claim to want web content integrated in as well. I like the audacity of the vision, but since I haven’t tried one out yet, I can’t speak to their potential. They could either win big or go down in a huge flameball. I’ll be watching this one closely!