Topic Page: Apple and TV

I try to use categories fairly extensively on this blog to allow readers to easily browse other blog posts on a particular topic. But because I write elsewhere too (notably at Techpinions) and because some topics transcend a single category, and also because a long linear list of posts isn’t always the easiest to navigate, I’ve decided to create some topic pages. These pages will bring together what I’ve written on certain topics across sites, and summarize my main views on the topic, with links to all the posts where the ideas are fleshed out in more details. This topic page deals with all the posts I’ve written that relate to Apple and the TV space, both Apple TV hardware and potential TV services.

Summary

My view on Apple TV is that an Apple TV service, offering something of a substitute for a traditional US pay TV service, is critical to the success of the Apple TV box. The Apple TV service must be comprehensive enough for the box to effectively become the only input the customer needs to plug into their television, which means it has to have very broad content rights including local and sports content. However, there are significant challenges to all this, not least securing those rights. In addition, the challenge of competing with the cable companies and telcos, who also control the broadband pipe and associated pricing, is significant. However, Apple does have some key advantages over existing players in terms of user interfaces, data capture and ad-based monetization, and attractiveness of its user base.  I also believe that the new Apple TV box Apple is introducing in September 2015 will be successful on the basis of the App Store, gaming, and content opportunities it will create. But for Apple to truly take Apple TV beyond a hobby will take the Apple TV service, which I now expect to launch early next year.

Details and links

I have long believed that Apple has the greatest potential of perhaps any player to overcome what I see as the fragmentation of the television experience, something I first talked about in this piece on Techpinions in March 2014, in which I said:

Consumers want single-input, single-interface access to all their video content, and instead are presented with having to switch devices, inputs and apps to get from one show to the next… [W]hat has to be the end game for Apple in this space [is] offering a full-service TV subscription offering that would combine traditional live linear broadcasting with on-demand viewing of both recent and back-catalog TV shows and movies.

Launching such a service, I said at the time, was key to taking the Apple TV hardware from a hobby to something more – essentially, taking over the sole input on the TV. That continues to be my long-term thesis on Apple and TV – while the box is important, it’s the service that’s truly going to be critical to Apple’s success in this space, though the adding of an SDK and gaming with the new hardware announced in September 2015 will be important too (see the last piece linked below).

For the next year or so after I wrote this piece, there wasn’t much more to say. But then two things happened in quick succession: Apple’s deal with HBO around HBO Now, and the Wall Street Journal’s report that Apple was indeed working on something very like what I had described. I wrote a piece on Techpinions about the HBO Now deal and how it reinforced my perception that Apple could do something more, and as a response to the WSJ report, I wrote another piece on this site outlining the challenges Apple faced in getting this done. Not the least of these, I wrote, was the fact that anyone ending their television relationship with the cable company (or other pay TV provider) would still be stuck buying broadband from them, and likely at a higher price than before. To my mind, this is still one of the biggest bear arguments against a really mass-market Apple TV service:

The cable company will still play a role in many cases as the broadband provider, and with the loss of valuable TV revenue it’ll be tempted to compensate by raising broadband prices. If cable operators then also offer comparable over-the-top TV services as a retention strategy, the appeal and impact of Apple’s TV service may be further blunted. Apple’s differentiation will be greatest in the areas it specializes in – creating great user experiences across devices. Apple can apply some of what it’s acquired through Beats to develop recommendation features, and surely has plenty else up its sleeve. The effectiveness of this differentiation is ultimately what will drive Apple’s success or failure as a truly disruptive TV offering.

Over the next few months, I provided more detail about these challenges and others, as well as potential ways Apple might differentiate itself with a TV service, both here and on Techpinions:

  • Apple, TV, Data and Ads (Techpinions) – this piece talked about the role Apple could play in helping content owners better monetize their content through advertising, especially on content watched other than live, without compromising user privacy.
  •  The Last Piece of Apple’s TV Puzzle: Local and Sports (also Techpinions) – this piece talked about the challenges associated with content rights, and especially the complexity of acquiring rights to local content across the US for a national launch, as well as the fragmented world of sports rights, which are spread over many different network and cable channels. I outlined several possible approaches Apple could take to all this.
  • Along the way, I also wrote a piece on this site about why an actual television set really doesn’t make sense for Apple (and also covered some reasons why it might make sense.
  • Following WWDC, I wrote a piece on Techpinions about Apple getting back into content with the announcements of Apple Music and the News app, and wondered what this might mean for the TV service.

Over the last few months, I’ve also shared quite a bit by way of context, with several pieces on the evolution of the TV industry in general (particularly in the US):

  • TV’s Detour (Techpinions): an analysis of what I describe as TV’s detour away from the television set and onto other devices, only to come back to the TV again in recent years.
  • Television’s Advertising Addiction (Techpinions): the other half of my analysis on trends in the TV market, focusing on the role of advertising and the damage it was doing to major players to rely so heavily on this revenue stream.
  • A Primer on TV Economics (Techpinions Insiders): some basics on pay TV economics, including the true price of service, growing programming costs, and the importance of advertising revenue to pay TV providers.
  • The Four Big Questions for the TV Industry (Techpinions): I outlined four important questions the TV industry would need to answer for itself in order to understand the disruption it faces and the best responses to it
  • An Update on Cord-Cutting (Beyond Devices): an analysis of the numbers I regularly collect each quarter on the pay TV industry, and the increasingly obvious trend of cord cutting that’s emerging.

In August, the Beyond Devices Podcast covered the Apple TV in Episode 13, with my co-host Aaron Miller talking through the potential of the Apple TV as a gaming console, and on the same day I covered both the gaming and content opportunities associated with the new Apple TV in a post on Techpinions.

Listing of posts on this site in the “Apple TV” category:

Listing of posts on this site in the “Apple” category:

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