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Time Warner Cable Will Market Startup’s Fan TV as a Great New Way to Watch TV

Hate your cable set-top? Time Warner Cable will soon be suggesting customers go out and buy a cool new $99 device that provides access to live TV and Internet-streaming services — with a sleek new menu that outshines TW Cable’s own guide.

Fanhattan’s Fan TV, to be available either next month or in June, will let Time Warner Cable video subscribers access TV and video-on-demand, along with a handful of other services: Redbox Instant by Verizon, Crackle, Target Ticket and the Rhapsody streaming music service.

Time Warner Cable is not investing in Fanhattan under the deal. TWC TV service is also available through Roku set-tops, Microsoft Xbox 360 game consoles and Samsung Smart TVs.

To Mike Angus, senior VP and g.m. of video for Time Warner Cable, Fan TV is a leap forward for the cable industry, providing a content-driven guide to access not just TV but other content as well. “It’s really a paradigm shift from what’s in the market today,” he said. “It provides new ways for our customers to discover the content we have.”

But that raises the question: Why can’t Time Warner Cable develop something as compelling for customers through its own set-tops? According to Angus, the cable operator is looking to extend its service to new platforms, and provide more choices to customers. “Fan TV’s user interface is pretty brilliant,” he said.

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TW Cable maintains that Fan TV is not a replacement for the set-tops it provides to customers: For one thing, Fan TV does not include DVR capabilities. In addition, the TWC TV service accessible through Fan TV delivers up to 300 live channels and 5,000 VOD options, which is not the full complement of programming available through Time Warner Cable-supplied equipment.

However, the Fan TV project with Time Warner Cable could be short-lived. Time Warner Cable is the target of Comcast’s $45 billion acquisition bid — and the larger operator has already discussed the prospect of bringing its own Xfinity X1 next-generation set-top and user interface to TW Cable markets.

Meanwhile, it’s questionable if Fan TV’s features will be enough for the startup to claw market share in the competitive Internet set-top space, which includes Apple TV, Roku, Google’s Chromecast and now Amazon’s Fire TV. The addressable market for Fan TV for now is really limited to Time Warner Cable subscribers, and initially, the box will not have support for Netflix, Amazon Instant Video or Hulu.

Fanhattan CEO Gilles BianRosa is counting on the device’s advanced content-discovery engine and touch-based remote to turn heads. The difference between Fan TV and other boxes is its focus on live TV and “content-first discovery,” complete with recommendations, across multiple services. “We have built the best TV experience to surface all the content in your subscriptions,” he said. Additional services like Netflix will eventually be added to Fan TV, according to BianRosa.

Current Time Warner Cable customers can add Fan TV with no additional subscription contracts or fees beyond the one-time Fan TV purchase. However, the MSO requires video customers to rent at least one set-top box (regardless of whether they use it). The TWC TV service also requires customers to have Time Warner Cable broadband service or an operator-provided video-only modem.

Cox Communications last year launched Fan TV as part of a broadband-delivered subscription TV service trial in Southern California. But the operator ultimately decided to not launch the service commercially.

The first product from Fanhattan, founded in 2010, was a video-discovery app for finding movies and TV shows from multiple sources. BianRosa said the iPad app has about 2 million users — and his hope is that those with Time Warner Cable service will purchase the Fan TV box.

The San Francisco-based startup is backed by investors including NEA, Redpoint Ventures, BV Capital and Greycroft Partners.

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