Why $100 is the sweet spot for the right set-top box

Don Reisinger - Oct 23, 2010, 10:30 am CDT
Why $100 is the sweet spot for the right set-top box

The set-top box market is heating up. Currently, the Apple TV is on store shelves, along with the new Logitech Revue, several Roku boxes, and many more products that are vying for your wallet. The only issue is, there isn’t a single device on the market right now that delivers everything consumers are really looking for. And the reason why is quite simple: they’re all overpriced.

Next time you go to Best Buy or surf around Amazon, do me a favor and examine the Logitech Revue.

That device, which runs Google TV, has quickly become the benchmark by which all the other products in the set-top box market are judged. To some extent, that makes sense. After all, it features some of the most advanced functionality of any device in the space. And it’s the first Google TV-equipped product to hit store shelves. It would only make sense that it would garner so much attention.

The only issue is, the Logitech Revue is ridiculously expensive, sporting a price tag of $300.

Now, Google fans would say that it’s the right price. After all, they say, it allows you to search and surf the Web, access Netflix content, and enjoy all kinds of other content from the device. Plus, they say, it has full DVR integration.

But they don’t tell you the whole story. The Logitech Revue does let you surf and search the Web. And you can access far more content because of that. But developers won’t be able to offer apps for Google TV until next year. And that heralded DVR integration, which allows users to search cable programming and set shows to record, is currently only available on Dish DVRs. Yes, you can control your Comcast DVR with the set-top box, but you can’t get all the functionality it offers just yet.

So, the Logitech Revue seems to be more of a proof-of-concept than a set-top box winner. It has potential, but it’s not there yet. And for $300, it’s hard to see why many folks would invest so much in just potential.

Now, let’s go to the other side of the spectrum: Roku set-top boxes.

Those devices are simple, they bundle quite a bit of content into such a small box, and they’re quite cheap. In fact, they start at just $59.99. But the top-of-the-line model, the XD|S, is far and away the most viable device in the lineup.

Although the XD|S delivers 1080p video, Netflix streaming, and several outstanding channels, its software design is spotty, it won’t allow users to control DVRs, and it lacks the game-changing app store that Google is promising. Simply put, it’s great and it works well, but it’s lacking. And for $100, it seems rather overpriced.

But it’s not alone at $100.

The recently released Apple TV also sports a $100 price tag. For that amount, consumers get the ability to play their iTunes music, stream Netflix, and rent movies and television shows. However, the device lacks storage, the ability to buy tracks from the product, and the DVR integration so many had been hoping for.

But there is something to be said about the Apple TV’s and the XD|S’ price points — $100 is the ideal price for a set-top box.

The only issue is, the ideal set-top box would be more Google TV-like than Apple TV-like. Yes, that might be a dream at this point. But it’s one that I want to realize.

The future of the set-top box market relies upon a well-equipped $100 device. Charging $300 for the Revue is too much. And charging $100 for an Apple TV is too much. The sweet spot combines outstanding functionality with that $100 price tag. No more, no less.

And until vendors realize that, start throwing the kitchen sink into their products, and get the price point down to $100, they will continue to fight over a significantly smaller market than what it could be with the right product at the right price.

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