If TV’s Dying, Xbox One’s Crown Jewel Is in Big Trouble

Is buying an Xbox One to watch cable/satellite TV a sound investment?

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Former X-Play host Adam Sessler (a former colleague when I wrote for G4TV in the mid-2000s) made an excellent point in his video review of the Xbox One: What if cable/satellite TV withers on the vine?

What if, despite shows like Breaking Bad and Mad Men and Game of Thrones, TV’s in its final throes? What if one of the top, if not the topmost, selling points of Microsoft‘s new console — its multimedia passthrough ability to assimilate your cable or satellite box — turns out to be superfluous, as droves of viewers cut the proverbial cord and shift to online video-watching vis-a-vis Netflix, Amazon, Hulu and beyond?

Business Insider doesn’t ponder the question so much as resoundingly answer it: Yes, says the site, TV is dying, and it just had one of its worst years ever. “Audience ratings have collapsed: Aside from a brief respite during the Olympics, there has been only negative ratings growth on broadcast and cable TV since September 2011, according to Citi Research,” writes BI’s Jim Edwards at the outset of a devastating numbers-based breakdown of TV’s plight.

By contrast, says Edwards, “mobile video is booming.” Tablets are repurposing primetime watching, the people leaving TV are doing so because they’re shifting to mobile and “money is following the eyeballs” in that shift. In the process, ad revenue is up — as, counterintuitively, is cable subscriber revenue. But that’s because companies are charging more for ads, and charging cable customers more for subscriptions, which Edwards says is “masking the macro decline” of television.

An intriguing sidenote, because it impacts both TV (in the shift away from) and broadband service providers (in the shift toward streaming video) alike: people are increasingly pulling their streaming video content across “free” wireless networks, from coffee shops to hotels to municipally-provided Wi-Fi.

What the numbers don’t tell us, is how stretched out the decline curve is, and whether — assuming we agree it’s inexorable, and TV’s eventual demise total — it’ll happen fast enough to make services like the Xbox One’s new TV passthrough feature or the Wii U’s TVii component obsolete. If TV hangs around in sufficient numbers for three or four or five years, that might be enough of an argument to sustain Microsoft’s “one love” view of the Xbox One as a cable-slash-streaming multiverse through this latest (and perhaps last) console cycle, a reason to pick one up and enjoy wielding its IR blaster to navigate your cable/satellite box’s byzantine framework in these final golden years.

But if that curve drops out more quickly, or, more importantly, the predominantly games-playing demographic further decamps to streaming as its preferred modus operandi, the appeal of the Xbox One as a cable/satellite assimilation engine could vanish. All of the game consoles today, old and new alike, offer the same core streaming services, so you’d be back to less obvious differentiation metrics, say the Xbox One’s voice command nuances contrasted with the PS4′s (if you pick up a PlayStation Camera for $60), the systems’ respective game libraries and future promises, their interfaces and input mechanisms and — topping the list if you’re a gamer with social contacts in the bank — their respective social network platforms.

Microsoft caught a lot of flak earlier this year when it seemed to pitch the Xbox One as a multimedia hub first and a games system second. I’d argue it’s made good on the Xbox One as a competitive next-gen games console, as much so as Sony’s PS4, but for better or worse, it’s that original TV-obsessed pitch that’s forged the lens through which popular culture now views the system. When I hear cable news anchors devote a few seconds to the new systems or read newspaper or magazine stories offering perfunctory overviews, they differentiate the PS4 and Xbox One as “the games system” versus “the multimedia TV system.”

Once the buying field’s cleared of early-comers and we’ve burned through these early high sales figures — and mark my words, we will burn through them — I can’t tell you whether that curve’s a gentle slope or the edge of the precipice. But grab a bowl of popcorn and pull up a seat, because it’s going to be fascinating to watch it take shape.

(MORE: Watch TIME’s behind the scenes coverage of the Xbox One Launch Event)

MORE: The History of Video Game Consoles – Full

4 comments
mark1
mark1

The Xbox actually facilitates the migration away from TV by offering the single interface. It is that much easier to purchase and then to access your alternative content all through a similar interface to your broadcast channels. This reduces the psychological barrier to migration.

The biggest coup for MS is that they are really getting the consumer used to the fact that MS is their content provider, not Comcast, not Roku, not Netflix. MS already has some media properties and similar to Google and Yahoo has to grow that business. 

So they know what you watch and when. They know your gaming preferences. It should be easy for MS to source good content and give great personal recommendations a la Netflix

The only thing left is for MS to actually execute in a manner that consumers actually find appealing. 

tony.ornelas
tony.ornelas

If TV dies as quickly as some suspect, MS will find some other use for the HDMI In (connecting Rokus and such). The software that compliments your broadcast TV experience is, after all, just software.

And don't discount the console itself as a means to replace broadcast TV. I buy all of the shows and movies I want from Xbox Video and watch the rest on Netflix and Hulu.   

Dave81j6
Dave81j6

Eyes have shifted to mobile because mobile has the tv-viewing-experience right.

TV providers are largely entrenched in the old broadcast model, whereas mobile was born to the advent of iTunes. Single serve consumption when I want it, and if its not free, then I'll pay for only what I want.

It will be with the same quickness and magnitude that TV content providers shift their model, that TV rating will grow again. I've stopped wathcing TV a long time ago, and sans live sports, I may never go back.