Comcast, Time Warner, And The Future Of The Cable Box

Time Warner Cable and Comcast had different visions of the future of cable boxes. How will it all play out for consumers?

Comcast, Time Warner, And The Future Of The Cable Box
[Image: Flickr user Caden Crawford]

Comcast‘s acquisition of Time Warner Cable (TWC) is well underway. The $45 billion deal cements Comcast’s position as the country’s largest cable provider and the First Among Equals of our national cable cartel. The Philadelphia-based media giant previously acquired NBC Universal in 2009 (as memorably satirized on 30 Rock), which gave them control of valuable networks like Telemundo, Bravo, and CNBC, along with the NBC broadcast network.


In acquiring Time Warner, Comcast is obtaining a media company with a much different view of the cable box’s future and the interplay between broadband Internet and cable television. While Time Warner has been willing to work with partners like Apple TV and Roku to provide cable television programming that doesn’t go through actual cable boxes, Comcast’s view is different. Rather than a Roku or smart television future, it seems as though Comcast wants to essentially turn customer’s cable boxes into smart devices.

Time Warner’s Non-Cable Box Gambit

When Comcast announced their plans for Time Warner, they interrupted what industry watchers believed would be a major partnership for Apple TV and TWC. It’s been an open secret in Silicon Valley and in the television industry that TWC and Apple were in high-level negotiations to stream cable content through Apple TV set-top boxes, which would allow TWC users to bypass using their cable boxes with a $99 Apple TV purchase. TWC signed a similar agreement last year with Roku, which lets users watch cable programming through their Roku boxes.

The Roku and rumored Apple TV agreements weren’t just the result of altruism and a desire for viewers to experience more convenient services: they helped TWC mitigate the costs of upgrading their archaic user interface and digital backend platform. Although TWC announced a next-generation cloud UI in 2013, rollout was delayed for unspecified reasons.

In the meantime, TWC customers were able to enjoy a better viewing experience through Roku. After TWC became one of the only American cable providers to allow viewing via Roku, they delivered an app with a streamlined interface that many people find easier to use than a cable box. There’s no slow fumbling through confusing cable channel listings that make locating a specific network or station difficult, and no having to wade through multiple On Demand channels to find interesting programming. The Roku TWC app is a top-down reimagining of the digital cable interface with networks listed in alphabetical order and a vastly simplified browsing experience for finding the on-demand program a viewer seeks. Everything is quick, neat, and intuitive–the exact opposite of TWC’s cable box experience.

Time Warner also supports HBO Go on Roku, allowing HBO subscribers (and, well, others) to watch HBO programming through their Roku box. It’s important to note that Comcast does not support HBO Go on Roku.

Comcast And Netflix


After they acquired NBC Universal in 2009, Comcast had a massive portfolio of television networks and even became one of Hulu’s three stakeholders alongside Fox Entertainment Group and Disney/ABC. Comcast has a major lobbying presence on Capitol Hill, and CEO Brian Roberts golfs with President Obama and regularly attends White House social functions. In short, Comcast is more than just a cable television giant–it’s one of a handful of entertainment and communications megaorganizations that have an outside influence on Wall Street and Capitol Hill.

But even giants have business worries. For Comcast, the worry is that customers are switching to broadband-only services, and watching their television programs through computers, Apple TV, Roku boxes, and Xbox Ones. While TWC was making nice with Roku and Apple TV, Comcast wanted to rebuild the cable box to compete with those services. Comcast neither offers a Roku app nor allows HBO Go viewers to watch their content on Roku. Their support of Apple TV and Google Chromecast is equally poor; Microsoft’s Xbox one, through Comcast’s Xfinity service (more on that in a bit), is the only non-cable box watching device that isn’t a computer which the cable giant really embraces. Comcast views non-Comcast services as rivals, not as possible partners–as their recent agreement with Netflix demonstrates.

Ten days after the TWC-Comcast merger was announced, Comcast and Netflix entered into a streaming agreement, with Netflix paying Comcast unspecified annual fees (believed by the New York Times to be several million annually) in exchange for… well, what Comcast called “excellent user experience” in their press release. That ambiguous wording very likely refers to the fact that Netflix appears to be giving up stiff annual fees to Comcast in exchange for their service not being slowed.

Early this year, Netflix viewers reported a sudden slip in Comcast viewing speeds, and relations between the companies have been strained–Comcast has even threatened to block Netflix altogether in the past. Comcast has only promised to adhere to net neutrality rules until 2018 (a condition of their NBC Universal merger); after that, the cable giant could well try to push through new FCC rules allowing slower connection speeds for non-Comcast video content viewed through their infrastructure.

Back in 2012, Fast Company predicted that Comcast would try to crush Netflix. The recent Netflix-Comcast agreement appears to be an attempt to create a modus vivendi, albeit one that’s a nightmare for net neutrality activists and streaming content providers.

From Here To Xfinity

Unlike Time Warner, Comcast has been investing heavily in their cable boxes and remote controls. In 2013, Comcast rolled out their Xfinity 1 platform to the bulk of their cable subscribers. Xfinity 1 allows users to change channels using their iPhones or Androids, allows for smooth Netflix-style searching of On Demand content, and is generally light years beyond the awkward digital cable box UIs that have dominated American cable for the past decade.


Comcast already wants Xfinity 1 to soon be a thing of the past. They have been aggressively pushing their successor platform, Xfinity X2, to cable industry stakeholders. Although the company has been secretive about where and who is actually test marketing the product, limited rollouts have taken place. X2 lets users stream live television through any of their devices and, crucially, allows users to DVR programs and then replay them later on any platform they want. This functionality is layered on top of a smooth UI that resembles Roku or Apple TV’s platform, and is considered a key part of their future strategy.

More Devices, More Data

Comcast’s investment in watching content on multiple devices indicates they’re worried about Aereo, which lets subscribers watch broadcast television through multiple devices in limited markets. However, there has been some talk about Comcast turning Aereo into an ally.

Much like other industry stakeholders like Twitter, Comcast is well aware that cable customers are outgrowing their cable boxes and remote controls–and that new successor devices, like Xfinity sets and smartphone remote control apps, can capture all sorts of additional data that can then be monetized. The smart television revolution, of which Xfinity is very much a part, isn’t just about offering a better viewing experience–it’s also about leveraging as much data about viewers as possible for advertisers and other parties. While companies like Amazon use every click a visitor makes to serve them with products and specialized services, cable providers haven’t leveraged the data revolution to serve television viewers with customized ads yet.

Comcast knows that the future belongs to the parties who can find out exactly how many seconds viewers pause their channel flipping when a show interests them–and they want to make sure it’s them obtaining the data, not Roku, Google, or Apple.