

Apple's TV Strategy - ckurdziel
http://blog.shelby.tv/post/7617649688/apples-tv-strategy

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padobson
The problem with the TV is not the user experience, it's the content.

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.

~~~
MatthewPhillips
Commercials are an essential part of the television experience and the main
reason why the transition to online is taking so long. Getting advertisers on
board is difficult for a variety of reasons (namely that's it's a completely
different model).

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...](http://wiki.answers.com/Q/How_much_does_a_cable_television_show_cost_to_produce)

~~~
padobson
I'm not so sure about that.

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...](http://money.cnn.com/2010/01/06/news/companies/cable_bill_cost_increase/index.htm)

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.

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xsmasher
TV programming is ripe for an iPod/iTunes style disruption - Netflix is doing
it now with streaming - but it'll be hard to get people to buy a whole new TV.

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?

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mcphilip
All I got from this article was that Apple has enough cash on hand to enter
the market if it wants to. Nothing much about strategy...

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.

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forgottenpaswrd
I believe there is a tremendous potential for disruption on TV, the same way
anybody can make a living selling software using Internet, anybody should be
able to sell their documentary, films, or TV episodes using it without too
much middlemen.

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.

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protomyth
If Apple TV gets its own app store, then it will be interesting to see all the
channels (apps) that will result. I think that is more likely than an actual
TV (unless you are willing to call a big iMac a TV). I think the biggest limit
on Apple TV is the bandwidth caps.

~~~
reecepacheco
if/when Apple makes a TV, there will definitely be an app store with it.

~~~
protomyth
I just don't see them having a need to make the TV part, unless we are talking
a big iMac. It just seems like such a crowded field that doesn't really have
an upside beyond what the Apple TV is currently able to provide.

~~~
reecepacheco
one less device = simplicity

and brand is just so strong

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programminggeek
I think the reason the Apple TV isn't as disruptive or genius is that I don't
believe that Steve Jobs watches much if any TV. He is a busy man running a
Fortune 500 company. Do you think he spends a bunch of free time on his couch
watching TV?

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.

~~~
padmanabhan01
The idea that a ~350 Billion dollar company runs on the hunches of a single
man might sound interesting, but it just can not be true. And again, the idea
that Steve Jobs can not understand what constitutes a good TV, just because he
is not a TV junkie doesn't sound convincing to me. If it is a 100 Billion
dollar market and if it is something a majority use even for a few hours a day
and if improving that can make their daily life even 3% better, they are going
to go for it.

~~~
jonknee
Steve Jobs is not the average CEO. He's famous for micromanaging and very
directly being responsible for new products. It doesn't sound too far fetched
to me.

~~~
padmanabhan01
Yes, but I dont think it would be too hard for him to understand what a good
TV should be, even if he is not a TV junkie himself.

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reecepacheco
yeah... Dixon is dead on.

leave it to the naysayers to say "it's impossible."

Jobs will dominate and prove them wrong.

