Can Google Fix the Cable Box?

Don’t bet on it.

A set-top box

I’ve never met a cable box I didn’t hate. I’m not alone in this—hating cable companies is as cliché as hating lawyers—and, in truth, there’s nothing very interesting about my loathing. Like you, I’ve spent too many hours wrangling with the ugly device that sits between the cable company and my TV, and I’ve found every one I’ve ever used to be slow, buggy, and beset by a terrible user interface.

Worse, I’ve had to shell out a lot of money for the privilege of using these awful things. Back when I was in college, I remember paying Time Warner Cable around $5 a month to rent a cable box—a terrible deal, given that the box looked to have been manufactured during the Eisenhower years. But what could I do? I wasn’t allowed to purchase one, so renting from the cable company was my only option. Cable and satellite companies have slowly, grudgingly added more features to their boxes—they now offer high-definition DVR recording—and they’ve raised their prices accordingly. I pay AT&T U-verse $15 each month to rent a DVR. After about a year of service, this monthly fee is pure profit for the provider. The manufacturers are cagey about how much cable and satellite companies like AT&T and Comcast pay for these boxes, but it’s likely around $200 (after all, a TiVo DVR, which is far better than your cable box, sells for $250 retail). In other words: ka-ching!

And don’t forget the cost of the electricity your box is sucking up. Last year, the Natural Resources Defense Council and Ecos, an environmental consulting firm, examined the energy usage of 58 set-top boxes deployed by cable and satellite companies in the United States. They found that on average, a high-definition DVR set-top box consumed about 275 kilowatt hours of electricity per year. That’s two-thirds the power consumption of a 21-cubic-foot refrigerator. The NRDC found that most boxes operate at nearly full power even when you’re not watching TV; European TV providers have managed to reduce the power consumption of their boxes during these hours, but American firms haven’t bothered to use more efficient equipment. At the average national electricity rate, each box will cost you $30 a year to operate.

Is this ever going to change? When Google announced its plan to purchase Motorola Mobility this week, the news sparked a flurry of excitement among my fellow set-top-box haters. Motorola Mobility is best known for its phones, but it’s also one of the nation’s biggest suppliers of set-top boxes. Through Motorola Mobility, Google’s army of software engineers and user-interface experts could potentially redesign the set-top box from top to bottom—making them smaller, cheaper, and connecting them to the Internet, where they can pull in content from YouTube, Netflix, and Hulu Plus. This would be a very Googley move. TV service is monopolistic, expensive, and hostile to consumers. It’s the exact sort of legacy business that Google prides itself on disrupting.

It’s a nice fantasy. But don’t bet on it happening anytime soon. For one thing, there’s no evidence that Google would be very good at remaking the set-top box; its own effort, Google TV, launched this year with a thud. Bringing online services to television is a notoriously difficult user-interface challenge, and Google hasn’t shown that it can surmount the problems that have felled everyone else. But there’s an even bigger challenge here. Even if Google does manage to improve set-top boxes, why would cable and satellite companies buy these better, more user-friendly devices? Answer: They won’t.

To get back to fantasy land for a moment, let me describe my ideal cable box. First, I want it to be really fast, so that I don’t have to wait a lifetime while it’s switching channels, searching for programs, or scrolling up and down the guide. I’d like it to access other sources of content—it should be able to switch between TV and Netflix, my photos, and my music. Physically, it should be so small as to be nearly invisible. And it should be drop-dead simple to use, with an interface that most people would grasp in a few minutes.

I know this sounds too demanding. Actually, though, I have a device in my living room that can do all of these things already: my television. It’s not a particularly fancy or expensive TV (it’s a Vizio that’s nearly two years old), and many other mid-market sets these days match its capabilities—it can access most popular Web services, it can play music and photos, and it has a great, fast user interface. I was able to choose it from among many other competing models. And best of all, I don’t have to pay a monthly fee to use it.

Do you see what I’m getting at? I don’t need an extra set-top box in my living room, and the only reason I use one is because my TV provider (AT&T uVerse) demands that I rent one to unscramble its content. There’s no technical reason why my television (or any of my other devices—like my Xbox, say) couldn’t handle this unscrambling duty. But cable companies have fought every effort to let third-party equipment, like television sets, access their content. Over the last decade the Federal Communications Commission pushed a technical standard called CableCARD which was meant to force TV companies to make their programming compatible with standard consumer-electronic devices; the cable industry has shunned that effort, and there are very few CableCARD-enabled devices on the market.

There are some obvious reasons why cable and satellite companies don’t want other devices to be able to decode their programming. First, they’d lose all those cable-box rental fees. More importantly, they’d lose a key grip on the living room—by controlling the main entertainment device in most homes, cable companies can slow or stymie any competing sources for entertainment. And TV providers would have to be especially wary of Google’s attempt to invade the living room. Google, like the cable companies, makes money from ads—and if it sneaks into your living room through Motorola boxes, it’s going to have a great platform for targeting ads to millions of people. If you’re watching ads from Google, you’re not watching ads from your cable company.

Sure, Google could think of a way to get around the cable firms. For instance, it could start selling souped-up, Internet-enabled Motorola set-top boxes at retail stores—you’d pay a one-time cost of $200 or so and get a device that could unscramble your TV shows and manage the rest of your entertainment (and never have to rent a box from your cable company again). But I suspect that if Motorola did something that dramatic, it’d quickly see its existing, lucrative contracts with cable giants dry up—they’d go with a friendlier set-top-box maker, like Cisco. And I don’t know if Google wants that headache. There’s already some speculation that Google could get several billion dollars for the Motorola Mobility’s set-top-box division if it tried to sell it off after the merger closes. That would provide a much surer payday than taking on the cable companies.