Comment Talked with the CTO - They'll go bankrupt w/in 24m (Score 2, Interesting) 57
Here is a very informative article about this industry:
http://www.washingtonpost.com/wp-dyn/articles/A216 5-2004Oct27.html
Last week I talked with the CTO Tom Hammer about a business partnership. This company will be bankrupt in 24 months.
Their decision to go with Windows CE was based on cost. The WinCE license is only $3 per box. IMHO their choice of WinCE shows a lack of imagination and a lack of vision. They probably did it because they wanted the partnership with Microsoft. But they also intend to generate a lot of their own content. With this the case they could go with the new DivX VOD codec and be completely independent from MS.
Microsoft is not have the best reputation in Hollywood. They have had a LOT of resistance from the content providers because Hollywood is scared Bill Gates will come down to Hollywood and own them.
The CTO said if they were inclined to change the platform they would move to a dedicated Mpeg4 decoder and bypass the expensive CPU. When I aksed about the ability to change the encoding algorythm in the future his response was that in the consumer industry people only keep these devices for 3 years (my last cable box was older than 3 years - STB is not a consumer product). The guy sounded like he knew NOTHING about the embedded TV box market and the technology out there already.
According to Hammer right now they are only paying around $180 for the hardware. So in their business model they are trying to make money off the hardware AND the service.
IMHO for this kind of business model to really take off they need to loan out the boxes like the cable companies do.
Even more importantly, they have to figure out some way to get the broadband providers (cable companies or the ADSL companies) to bundle their product with their distribution. Since they are competing with the cable companies the prospect of partnering with them is dim, so they are left with one sector to partner with, ADSL companies. If their box provided some other value to the consumer (like games, router, hub, PVR) maybe some ADSL customers would opt in and rent it, but with their content right now there is little compelling reason to get this box. Even more compelling reason to get rid of it if the user doesn't like the service. It's not an integral part of their home network like it would be if it had a router built into the device.
After talking with the Hammer my only thoughts were "How arrogant this guy is!" If you look at the rest of the team on their website you will see that they are really not that top notch. The VC's that invested in this company are going to get burned big time!
http://www.washingtonpost.com/wp-dyn/articles/A21
Last week I talked with the CTO Tom Hammer about a business partnership. This company will be bankrupt in 24 months.
Their decision to go with Windows CE was based on cost. The WinCE license is only $3 per box. IMHO their choice of WinCE shows a lack of imagination and a lack of vision. They probably did it because they wanted the partnership with Microsoft. But they also intend to generate a lot of their own content. With this the case they could go with the new DivX VOD codec and be completely independent from MS.
Microsoft is not have the best reputation in Hollywood. They have had a LOT of resistance from the content providers because Hollywood is scared Bill Gates will come down to Hollywood and own them.
The CTO said if they were inclined to change the platform they would move to a dedicated Mpeg4 decoder and bypass the expensive CPU. When I aksed about the ability to change the encoding algorythm in the future his response was that in the consumer industry people only keep these devices for 3 years (my last cable box was older than 3 years - STB is not a consumer product). The guy sounded like he knew NOTHING about the embedded TV box market and the technology out there already.
According to Hammer right now they are only paying around $180 for the hardware. So in their business model they are trying to make money off the hardware AND the service.
IMHO for this kind of business model to really take off they need to loan out the boxes like the cable companies do.
Even more importantly, they have to figure out some way to get the broadband providers (cable companies or the ADSL companies) to bundle their product with their distribution. Since they are competing with the cable companies the prospect of partnering with them is dim, so they are left with one sector to partner with, ADSL companies. If their box provided some other value to the consumer (like games, router, hub, PVR) maybe some ADSL customers would opt in and rent it, but with their content right now there is little compelling reason to get this box. Even more compelling reason to get rid of it if the user doesn't like the service. It's not an integral part of their home network like it would be if it had a router built into the device.
After talking with the Hammer my only thoughts were "How arrogant this guy is!" If you look at the rest of the team on their website you will see that they are really not that top notch. The VC's that invested in this company are going to get burned big time!
