Roger Entner
Slingbox will expose mobile operators' video strategies
Today, Slingbox launches its software for Windows Mobile 4 and 5, which is threatening to seriously wound the US mobile network operators' (MNOs') mobile video services, even before they have launched. A Slingbox lets you place-shift your home TV service, just like a VCR or DVR lets you time-shift your TV service. By purchasing a $200-250 Slingbox, users can watch their home television on any device with a broadband connection, with a very similar user experience. Comment: The mobile Slingbox software lets you connect to any high-speed PDA using Windows Mobile 4 or 5. At least for TV enthusiasts, it poses the question: if you have this, why would you subscribe to a mobile video service, when you would probably have to buy a new phone to watch the video content anyway?MNOs in the US have tried very hard to become value-added providers, and therefore capture a greater share of revenues and control from customers. The most logical, suitable and profitable content segment for high-speed data networks is video. With this announcement, Slingbox is basically stabbing deep into the soft underbelly of the MNOs' high-speed data strategy, and attempting to relegate the MNO to a mere bitpipe.The biggest weakness of the mobile Slingbox software is that it is restricted to high-speed Microsoft Mobile 4 and 5 devices, a rather limited market. While enthusiasts will flock to these devices, they are hardly mass consumer products. It will be very interesting to see how mobile video does without, or at least with a severely curtailed group of, critical early adopters. The moment Windows Mobile expands into consumer units or the Slingviewer is available on Series 60 or any other standardised phone OS, the carriers are in serious trouble.In the long run, the MNO hardest hit by this announcement is probably Sprint's cable joint venture that was basically built in large part on what Slingbox is now providing for free. Sprint and the cable companies now have to work on differentiating and integrating the joint offer even more by extending it and providing much greater value through feature integration.What can cable companies do against this? Absolutely nothing. By allowing only one concurrent Slingbox user to access the box, it complies with the fair-use provisions in the various copyright laws. And as it is positioned between the cable box and the television, nobody can scramble the signal.What can MNOs do against this? Absolutely nothing. The carriers have to focus their offerings on the mainstream customers who do not want a PDA-type device, but are interested in a relatively-limited number of programmes. The moment they block the Slingbox service or throttle it down to make it unviewable, they put themselves in the position of companies and organisations that block or impede consumer choice - and that has never been a good place for US companies to be. The only other alternative is to stop using standardised, open operating systems such as Windows Mobile, but that means giving up all the benefits more powerful devices and standardised software bring to the productivity of wireless users.What should wireless carriers around the world do? They need to double check their already battered 3G business cases once again and see how they work without the early-adopter video enthusiasts. This is a global issue, with the expected concurrent announcement of a PAL Slingbox. However, due to the prevalence of metered services in Europe for wireless data and the flat-rate nature of mobile TV services, the European carriers should be affected considerably less. Microsoft critics out there can rejoice that Bill Gates and Steve Ballmer may have unwittingly undermined the 3G wireless video business model, as well as making the fight over the remote control a potentially global conflict - with one spouse changing the channels in the living room and the other doing so from an airport in a different part of the world!
