Dec 09

Waiting for the real Apple TV

apple_tvHaving already upended two industries beyond computers (music and smartphones), Apple is now preparing to do battle with a classic bad guy: the cable industry.

Just yesterday the WSJ reported that Apple was in discussions with CBS and Disney. The story started rippling around the web, accompanied by images of Apple’s famous “hobby,” the Apple TV device. That’s a knee-jerk reflex to the words Apple and TV, but one that misses the point. The giant, industry-altering story here is not Apple TV — it’s simply iTunes TV.

Apple will follow its classic playbook. They’ll swoop into a new market and do a dramatically better job of making people happy. In this case, they will combine customization and accessibility to create something that makes way too much sense not to work.

Remember when you had to buy a whole album to get the two songs you really wanted? The iTunes Store fundamentally changed things — to the point where musicians had to rethink the way they make albums.

Apple will do the same thing for broadcast. Think of all the crappy shows you pay for, but never watch. Imagine subscribing only to the shows or networks that interest you, with some innovative ways to explore and sample new content — all while paying less than you currently do.

That would be tremendously cool in your living room (yes, using Apple TV). But the idea of an iTunes TV is a hundred times bigger. Because when you subscribe to TV via iTunes, you can access your favorite shows from anywhere — by computer, iPhone or the speculatively spectacular iTablet. You will be freed from the shackles of your cable box.

Look for iTunes TV to start with just a couple of names (like Disney and CBS), then branch out from there. Just as it did with the movie studios. And look for the cable companies to start looking extremely nervous.

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  • I for one am ready.

    But, I keep wondering whether my family can make the mental transition and if indeed it’s more efficient than the $89/mo we pay Comcast.

    By the way, any word whether Apple will be part of the DLNA movement or will they stay All Apple All The Time?

  • a problem with subscriber based internet TV is all the happy accident discoveries you won’t stumble upon… and let’s face it, you might want to watch Dexter on Showtime, but the majority of their other offerings are way below that standard and there you are again paying for a bunch of stuff you’ll never watch… ditto that with all the networks…

    sometimes having more choice actually means just that… i pay a fair amount to Optimum for my service and in return, they provide a ton of HD broadcasts and new offerings…

    another issue that might arise is one of service and what do you have in your area that can support a pipe that large? if you’re out in the Catskills or out on the Cape for holidays, vacation, get-away, etc, you’re at the mercy of the local providers, so this might be a service for the more cosmopolitan unlike the iPod or iPhone: one needs no local network the pother relies on a national network outside Apple’s control…

  • I’ve been bullish on this idea for years, and I will be cheering the loudest when it comes true.

    The main (long term) drawback is going to be live TV. Even after adding every network, streaming the Superbowl via iTunes is a long way away.

    In the short term, web pundits are going to make the same predictions as before: the content is too limited, no one can compete against free bittorrent, it’s too expensive, do you really want Apple controlling everything, etc.

    But Apple won’t hear them because they’ll be too busy thrilling an increasing base of users and counting their money.

  • This is the most coherent and convincing argument I’ve read so far, Ken. Put this way it really looks like this is inevitable.

    But the real big deal will lie in making this service available outside the U.S. Then it will also make sense to buy an Apple TV in say Europe, where most countries still don’t have the possibility to download movies or series via the local iTunes store. And then and only then us Dexter- and Lost-starved Euro fans might just refrain from torrenting the latest episode.

  • rd

    I doubt Apple can do better than Netflix.
    Cable started out well only because
    they were trying hook people into the service
    and then slowly increase the price.
    Sports channel being the main culprit.
    They save reason Cable can’t offer A-la-cart
    because then most cable channels and their shows
    would die a quick death.
    So there is nothing Apple can do to improve the situation because big 5 media company don’t think anything is wrong,
    to them it just another distribution channel with the same profit margin.
    If BBC can’t bring shows outside britain what chance
    is there for other companies to do the same.

  • @Edw3rd: how’d you get your picture in there?????

  • ken segall

    There’s definitely a long way to go before we realize the full vision — but it’s going to have to start somewhere. I just think Apple is super-well-positioned to push this forward and be the company that represents the big change. Marino’s point about missing “happy accident discoveries” is interesting, but I think it will become less relevant as the new model takes root. Just as iTunes offers free music, deals and special promos to get you into new things, the TV channels will do the same. I’d also expect iTunes TV to come with a “genius” feature — the more you watch, the more it will be able to suggest programming that fits your interests. Cable can’t do that. It will be a far more personal version of TV, one that better fits the way we live today.

    The fact that the big media companies don’t think anything is wrong is exactly why Apple will succeed. The big phone companies didn’t think anything was wrong either — now they’re all scurrying to catch up with the guy who showed them exactly what was wrong.

  • ken, i might agree that Apple will succeed with this IF they didn’t have to rely on the other companies that don’t think anything is wrong… the iPod is amazing testament to their ability to make a stand-alone product, like their computers and the once dead, soon to be revived Newton… the fact that they have to rely on the media companies for everything else EXCEPT their box makes me pause…

    the bandwidth is not under their control, like the content, the scheduling, the reruns, the commercials … and the list goes on…

    compared to the iPod, this is a train wreck in the waiting: take CD, yours or a friends, put it in the CD drive, import into iTunes and your iPod, repeat as often as you have drive space to accommodate… no middle men…

    look at what the iPhone is going through because their chosen service carrier, AT&T, has terrible service? the complaints have not stopped flying into their offices, there was a threat of disruption via overload last week, and people have actually been switching carriers… yes, the number of owned iPhones is still up there (like Twitter, they still count you even if you haven’t tweeted in a year), but the number of IN USE iPhones is dropping…

    i’m on my way to a Verizon store to talk about service plans, costs, etc, because i’m tired of getting texts, calls and emails much later than they were sent… NOT Apple’s fault, but the problem with the carrier… now multiply that by, oh, say 20 service providers for content for entertainment…

  • ken segall

    I hear ya. But I think the most relevant analogy is the current iTunes Store, pre-TV. There is a ton of content there from the different record companies, a bunch of movie studios, some TV shows, etc. Apple is simply the middle man taking a cut — and making money on the players and the content. I’m not saying there won’t be challenges getting the TV thing going, but there are challenges in any new endeavor. It will probably take a couple of years to really get it humming, and to beef up the content. The broadcast companies need someone to slap them around a bit, to make them “suffer” for their own good, just like the record companies who initially resisted. In the end, they will likely discover that the new model makes them even more money, because distribution is so much easier. And it’s not like they don’t already buy into the idea. They’ve all been trying to avoid the fate of the music companies by making their content available digitally already. It’s just that individually, they don’t have quite the clout, and things get too confusing. The iTunes Store is ubiquitous. It makes things easy. It’s a natural place for them all to end up.

  • Shehan

    I’d like to see how this plays.. especially once Apple gains the market it needs.. and also the media attention.. then only would it become a real ball game as I know the likes of Comcast and Charter will have alot to say about it!

    But internet TV is the future.. No Doubt about It!