Apple's TV Strategy
blog.shelby.tv
blog.shelby.tv
Right now, content creators have created an environment that is 10 times more complex and legally difficult to penetrate than anything the music industry did - and they're successfully defending this position against everyone, including Apple.
Television should be an experience where I can watch exactly what I want to watch, exactly when I want to watch it. No commercial interruptions, no content I feel 'meh' about. When I know what I want to watch, I should be able to select it and watch it on my terms. This should apply to new content in the same way Netflix is currently doing reruns.
Furthermore, when I don't know exactly what I want to watch, there should be a Pandora like system that creates a channel for me that will give me something I am probably going to like.
I should be able to know what my friends and people I find interesting think about what I'm watching. This should not, in any way, intrude on the watching experience, but it should never be more than glance or a remote tap away.
Finally, this entire experience should cost less than a cable subscription.
The technology is there. I could build this experience for myself using BDs, iTunes, DVR, a media server, and by programming a bunch of TV apps for something like Vizio, Samsung, or GoogleTV.
However, without the backing of content providers, something like this will never make it mass market because they are holding all the cards until a giant, like Apple, decides to take them on - and it'll be far more bloody than the battle for music.
An episode of a TV show can cost several million dollars to make. Reality shows cost much less, obviously. ER, for example, cost 13 million per episode [1]. Do you think they can recoup that at $0.99 per episode? I don't. Can they recoup that at $9.99 per month for some subscription? No way. The only way they can pay for that is by drilling into your brain brand recognition.
http://wiki.answers.com/Q/How_much_does_a_cable_television_s...
Firstly, making the service I am describing available to customers like me doesn't mean that everyone is going to abandon the traditional delivery methods. Such a service would likely require some level of technical sophistication (i.e. plugging in an ethernet cable) where most TV users just want to turn on the TV. Traditional delivery methods, and revenue streams, would not be immediately damaged by such a solution.
Secondly, using your example of ER, there is marginal revenue per viewer. For every viewer that the new service draws from the old service, it becomes necessary to make a certain amount of money per viewer. ER's lowest rating was about 9 million viewers. At 13 million an episode, the marginal revenue per viewer (again, on the low end) would need to be around $3/viewer/episode to earn $14 million in net income per episode (that's 9M viewers x $3.00 = $27mm - $13mm cost per ep = $14mm). At 22 episodes a season, that's $66/yr for each viewer. Compare that to a digital cable service that can cost you well over $1200 dollars a year. You could buy 18 shows on the magnitude of ER for that price, and who could possibly have the emotional fortitude for that? Let alone the free time.
http://en.wikipedia.org/wiki/ER_%28TV_series%29#Ratings http://money.cnn.com/2010/01/06/news/companies/cable_bill_co...
The cable television business model is a value suck. Albeit, a value suck that's not going anywhere, but I sure as heck am not going to pay for it. I'll stick to free TV, Netflix, and my BD player.
The numbers work for the sort of service I want, and I would bet that Reed Hastings would love to give it to me for $30.00/mo if he could get around the content providers who are clinging to their 20th century business model.
I'd also like a Boeing 747 for $5.
The iPod had a simple selling point - all your songs in your pocket - and it only had to displace cassette/CD Walkmen that wore out in a year anyway. Ditto for the iPhone - internet in your pocket, but this instead of your next phone upgrade.
TV is harder. What's the selling point for an Apple-branded TV, and is it enough to make me buy a new TV now instead of 5-10 years when mine wears out?
iPod, iPhone, and iPad are all portable products that can be used in a wide variety of contexts, but a TV is only used in a single location. Unless Apple can come up with some revolutionary new ways to use a TV to consume media, I'd be surprised if consumers are willing to pay a premium for an Apple TV product that has limited utility compared with the portable product lines.
It is already happening, but it will take some years, bandwidth has to be cheaper and the economic models have to be tested.
Remember Apple App Store learned a lot from Lindows-Linspire click and run, apt-get, yum and other experiments that tested software distribution in the millions of users way before Apple did.
and brand is just so strong
Apple products are great in part because Steve Jobs and other executives use them and so they make sure they are top tier.
Apple TV is a "hobby" because the people signing off on them don't have the same deep understanding of the TV watching experience that they do the phone experience or the desktop/laptop computer experience.
For example, for the longest time the Apple TV was where you could watch YouTube and movies you download from Apple. No DVD drive, no Netflix, no Hulu, no DVR, no game console. YouTube and iTunes purchases. That is not what a couch potato would design.
A couch potato would design something like a cross between the current Apple TV and the Wii or something. Streaming content + downloadable music/movies + casual games all running iOS. Make the Apple TV interface with the iPod Touch, iPhone, or Wiimote and you're basically there.
Again, if Steve Jobs were a TV junkie this might seem obvious to him, but I don't think he is so it probably isn't going to happen.
Even if he doesnt have time to watch TV, or isnt a couch potato, he will surely be interested in creating a TV that he would want to use.
I deliberately placed the word "use" here, because Apple is intent on creating highly interactive and/or immersive devices.
Apple is sure to use its learned experience from the success of the iPhone, iPad and Macbook to bring something revolutionary to the largest mainstay screen in our homes.
"Smart TV's" have the potential to cannibalize some of the PC market, as all of our data moves to the cloud and all we need is a good interface to compute...
Apple didn't make a tablet, they made an iPad. they won't make a TV, they'll make an iTV and differentiate themselves entirely.
Note that Apple is going that way with AirPlay Mirroring. As a reminder, AirPlay Mirroring allows you to wirelessly use the AppleTV as a second display for any app that supports it. (and it's very easy for a developer to support) In particular, that includes games (see Real Racing HD for example). Though it will only work with the iPad2 at first, this has a lot of potential.
I'm not sure that this would be the ideal way to get into people's living-rooms (they would still need to buy an AppleTV on top of an iPad), but it's pretty close to what you're describing.
he wants to put a dent in the universe... what better way than revolutionizing TV?
he wants to put a dent in the universe... what better way than revolutionizing TV/computing?
leave it to the naysayers to say "it's impossible."
Jobs will dominate and prove them wrong.