It looks as though the cable guys are out to cut both Cisco Systems Inc. and any of the private equity players bidding for set-top-box maker Thomson SA out of their lives with a new digital video recording service that bypasses the set-top-boxes completely, according to this article from Reuters. The article says Cablevision Systems Corp., which pioneered the technology has gained interest from major U.S. cable providers Comcast Corp. and Time Warner Cable.
The idea is that cable customers would be able to record their TV shows on the cable companies' networks instead of onto a hard drive in the set top box. For Cisco, which just purchased No. 2 set-top-box maker Scientific-Atlanta for $7 billion, a move to eliminate the boxes would be unwelcome at the very least. Yes, the most exciting aspect of the deal is actually tying the set top box to television over Internet Protocol and also bringing internet content to the TV, but that will take a while. In the meantime, the cable companies drive the revenue.
For French consumer electronics giant Thomson, which is rumored to be attracting a $6 billion private equity bid, the elimination of the U.S. market would be a blow, but not a fatal one. — Stacey Higginbotham
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