How the next Xbox can win the cable TV war

The battle for the future of television is just beginning, but it looks to be a long one. One of the key players is Microsoft, which has spent the past several years morphing its Xbox 360 from a straight-up gaming console into one of the best video-streaming boxes you can buy.

Of course, the current Xbox 360 is getting long in the tooth, and the next-generation model is expected to be announced soon, and to be available as early as the end of 2013. And TV services look to be just as central to the core of that device as gaming.

Last week, The Verge reported that Microsoft plans to enable live TV access on the upcoming console:

The functionality will work by taking a cable box signal and passing it through to the Xbox via HDMI, allowing Microsoft's console to overlay a UI [user interface] and features on top of an existing TV channel or set-top box.

That story would seem to confirm earlier rumors that the next Xbox would have support for live TV input, among other upgraded entertainment options, including Blu-ray.

So, the "Xbox 720" is taking a page from Google TV. But is that wise? Gigaom's Janko Roettgers asks, "Really, Microsoft? Your vision for the future of TV is...an HDMI cable?" He makes some solid points, ending his argument with "HDMI pass-through is the ultimate admission of defeat."

Maybe so. Google TV, after all, was hardly the sort of game-changer we've seen from Google's search engine or Android OS. But, ironically, Google TV-style HDMI pass-through -- in which media from your existing cable box or DVR is viewed through your Xbox -- might be a necessary, and even genius, short-term move on the way to owning the doorway to the future of home entertainment.

Here's why.

The future of cable TV is apps...but that future's not here yet

Yes, video apps are beautiful. They're fun. They're becoming ubiquitous. But they're not cable-box or DVR replacments yet. HBO Go is the reigning example of the shining future of apps, but most other cable TV networks don't have anything like it. Cable providers themselves have a cluttered hit-and-miss landscape of apps. The result: most wannabe cord-cutters can only go halfway.

Using an Xbox 360 for video is an awesome experience, but it's a cable TV accessory, not a cable replacement. The Xbox 360 currently boasts a huge assortment of video services, including Netflix, Vudu, Hulu Plus, Amazon Video, and HBO Go, as well as apps for Fios and Comcast. Those cable apps are nice, but they fall short of the "cable TV as an app" experience that many are looking for. Channel selection is limited: the Fios app offers 75 live channels; Comcast's Xfinity app offers only on-demand programs (no live TV). There's also no integration with programs you've recorded on your DVR.

And that's the problem. The current TV experience on Xbox seems to be an either-or proposition: on-demand or live, but not both. And that's hardly limited to the Xbox -- even Roku's promising Time Warner Cable app lacks on-demand content, at least for now.

An HDMI input lets the Xbox get full access to all of your cable content -- both live and recorded -- without having to wait for cable and satellite companies to improve their apps. The future of pay TV is undoubtedly streaming, but Microsoft can use an HDMI input as a bridge until the industry catches up. Given the cable industry's tortoiselike pace of innovation, it makes sense not to wait.

Google TV's main failing: Not clever enough about HDMI-in

If all this sounds familiar, that's because it's precisely the same pitch made for Google TV when it was introduced more than two years ago. And we know how that went.

Still, Google TV's problem has always been the execution, rather than the concept. Aggregating and searching among all the content providers you pay for is still a good idea, it just needs to be done in a way that doesn't involve a 70-button remote.

With the Xbox 360, Microsoft has proven it "gets" the living-room experience, much more than Google has so far. Everything about the Xbox 360's video offerings is geared toward the "lean back" experience, whereas Google TV tried to bring Google's Chrome to your TV, a la Web TV. Voice search via the Kinect remains one of the fastest ways to find content and one of the few times it's worth using voice commands. It feels like the future. All it's missing is your cable and DVR data.

The real challenge will be working with cable and satellite providers to get the "hooks" needed to interact with their set-top boxes in a meaningful way. (Many cable and satellite providers already offer apps that permit smartphones to double as remote controls via Wi-Fi, for instance -- much more reliable and faster than relying on IR blasters.) Google TV only integrates well with Dish Network; Nintendo's TVii (the TV control scheme built into the Wii U controller) is similarly limited to TiVo. In other words, if you're using another company's DVR -- Comcast, Time Warner, DirecTV, Cox, whatever -- you need to fire up your box's EPG and find the program yourself, defeating the purpose of aggregating the content in the first place.

Microsoft's UI > cable box UI

The biggest problems with most cable boxes? An antiquated user interface, and sluggishness. Microsoft's Xbox ecosystem is cleaner, faster, and extremely easy to use. There's no contest.

Nintendo tried to pull off a software coup with TVii on the Wii U, with a similar idea: to clean up the presentation of cable-box data. But Microsoft has way more video-streaming app partners, and Nintendo's TV integration basically stops at cable listings, using an IR blaster built into the GamePad to switch back to regular TV. It can't pipe live cable TV through the Wii U, it just programs your remote. The Wii U software is slow to load, and not very elegantly laid out.

Odds are that Microsoft will be more successful at connecting to cable boxes than Nintendo was, and make a much more useful and fun system. The opportunity's there to build on the idea Nintendo was trying to get at, but to do it far better.

Cable-in can be the bridge while the industry transitions

How many years did we have to wait for the iPhone to hit any cell provider other than AT&T? How long did it take HDTVs to finally catch on in U.S. homes? Sometimes it takes a long time for technology to make transitions. Who knows, really, how long it'll take the cable TV industry to finally ditch the cable box-and-DVR approach, and when app-based alternatives will finally arrive.

In the meantime, Microsoft can use HDMI-in like a Band-Aid. The last generation of consoles lasted a long time and evolved tremendously via hardware and software. What you'll see at the next Xbox's launch isn't what you'll see four years in, and that's a good thing. If all goes according to plan, hopefully the next Xbox will become an HDMI-in-free device down the road. It's easier to eventually remove a feature than add one.

You may laugh at HDMI-in as a pundit, but you might love it as a user. At least until the cable industry finally jumps into the streaming revolution with both feet.