Unlock the Box: Consumers vs. Cable Industry

By the end of the year, our nation’s leaders could be voting on a groundbreaking resolution that will forever change the way Americans view pay-TV media.

A recent Federal Communications Commission (FCC) proposal to “unlock the box” is pushing to allow cable TV subscribers to ditch company-owned set-top boxes for any third-party equipment like a Google Chromecast, Apple TV, or Amazon Fire TV. This would eliminate the  in rental fees for their cable boxes.

But what does #UnlockTheBox really mean for the cable industry and its consumers? Here’s a quick rundown of the drawbacks and benefits for the parties on both sides of the box.

 

What the Ruling Could Mean for the Cable Industry

Lost Revenue and Stalled Development Initiatives

Given that the set-top box market currently pulls in around $20 billion for the industry, pay-TV companies are understandably upset over possibly losing such substantial revenue. On top of that, cable providers make extra money by promoting pay-per-view options and packaging channels in their system interface — money they might lose to new box designers.

Another issue for the pay-TV industry is that most big providers have spent a lot of resources developing applications for content distribution. The Future of TV Coalition — a group of pay-TV advocates in opposition to the FCC’s proposal — has already pointed this out, arguing that . If approved, the FCC’s rules will strongly pull the market away from where cable providers are currently devoting a lot of resources.

 

Customer Retention and Conversion

Despite the outcry against the proposal, however, #UnlockTheBox wouldn’t necessarily spell the end for pay-TV companies. The option for consumers to use their own cable boxes has actually been available since the ’90s, with no apparent detriment to the cable industry. The technology that makes this possible is called a CableCARD, and it’s been largely ignored for most of its existence. All a subscriber has to do is install a third-party, CableCARD-compatible box, then rent a CableCARD from their provider to connect to the network. But despite the availability,  stick with their rented set-top boxes. So while this new proposal does give consumers another option to buy their own cable box, users don’t have to change anything — and history has shown that many probably won’t.

Further, this move toward unlocked boxes might even boost cable subscriptions. Many cord-cutters have cut off cable because of the high bills and hidden fees, but with an elimination of set-top box costs and , plenty of those lost subscribers might find their way back.

 

What the Ruling Could Mean for the Consumer

Lost Support and Potentially Higher Bills

Making the change to third-party set-top boxes won’t be completely free for consumers. In today’s traditional cable market, when users have a problem with their cable or set-top box, they call the cable company to send out a representative to fix the issue. But if third-party manufacturers control a subscriber’s box, it’s unlikely Apple or Amazon will send a technician to fix the device, and the cable provider likely won’t take responsibility for troubleshooting hardware they don’t manufacture or own.

Users who opt out of cable box rentals may also find themselves faced with higher subscription rates as pay-TV providers work to make up for lost rental revenue, though the rate of increase is purely speculative at this point.

 

Big Savings and Personalized Viewing

The most obvious concrete boon for consumers in the FCC ruling is the elimination of mandatory rental fees. Without cable box rentals, customers’ bills could be lowered by $20 a month. This spells huge savings for average cable TV subscribers, especially for those with numerous boxes.

Another huge potential benefit for consumers is the hardware. Current cable boxes are in need of major improvements — they’re often outdated, bulky, and far from energy efficient. With an open cable box market, cable companies will have to give their TV content and information to third-party manufacturers, pushing the industry towards innovation. Device development also means that if viewers want new programming options, they can pair traditional cable distribution with streaming content like Netflix or Hulu. This movement toward smoother integration, streamlined box designs, personalized menus, and interactive interfaces should all contribute to better viewing.

With the ever-changing landscape of media accessibility, it was inevitable that the cable television landscape would be forced to adjust eventually. And if the #UnlockTheBox proposal is approved at the end of the year, those adjustments will come a bit faster than previously anticipated. But whether subscribers opt to stick with their old cable boxes or invest in a new ones, this decision will hopefully prove to be a win for consumer choice and the overall cable experience.