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ANDREA FIGLER
Sony's long awaited set-top box allowing Cablevision Systems subscribers to access video-on-demand, the Internet and e-commerce opportunities turned out to big, black and bulky.
"I'll say one thing about it: it's ugly," says Gary Arlen, president of interactive research firm Arlen Communications, who was there for the box's unveiling at last week's Consumer Electronic Show in Las Vegas.
It turned him off so much that he didn't even pay attention to what was inside. If others react the same way, Arlen wonders how either Cablevision or Sony will succeed in the retail market with this product.
Marketing the box, however, may not be that difficult since Cablevision will provide it for free at its retail subsidiary The Wiz, Cablevision spokeswoman Victoria Rodriguez says.
Cablevision customers can swap their old analog boxes for the new digital ones, she adds.
Last month, Cablevision began distributing the set-top on a free pilot program to a few thousand clients in Long Island, N.Y. The operator plans to roll out about 500,000 throughout the year, with deployment beginning in June.
Cablevision will absorb the losses on the box at first.
The boxes cost Cablevision about $300 for the primary set-top and $200 for the secondary ones, sources said. With an order for 3 million boxes placed to Sony in 1999, Cablevision will shell out an estimated $1 billion to deploy the digital box.
The short-term return on investment will come from VOD rentals and reduced cable theft, Cablevision and Sony executives said at the CES show.
The projected long-term payback will come within four years through new revenue streams coming from advanced applications and services in games, e-commerce and advertising, the executives added.
At a Kagan Seminars conference last year, Cablevision CEO James Dolan predicted the company could eventually earn $500 a month from the advanced set-tops.
The new set-top box faces competition from emerging markets everywhere, even from Sony itself.
Sony of America plans to launch a Web site this spring that will provide movies from Hollywood studios for Internet browsers to digitally download to their personal computers.
A company spokesman would not disclose whether it has sealed any deals with studios or what price these movies will be sold. But, he confirmed, "it will be Internet-based, rather than cable-based."
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