Apple’s New TV Plan: Same TV, Different Box
The latest from my corporate cousins at The Wall Street Journal: Tim Cook is now more interested in a TV box than a TV set. Certainly plausible — just ask Time Warner’s Jeff Bewkes, who was predicting this a month ago.
But the bottom line hasn’t changed. Apple keeps poking at the TV industrial complex, and keeps concluding that it’s better off playing along than playing a new game.
To spell that out: If Apple really wanted to change the way people watched TV, it would change the way people paid for TV. And that would involve setting up new arrangements with the people who make TV content.
But Apple can’t do that — either because the content guys don’t want to change the way their business works, or Apple isn’t willing to pay enough to make them change. Or both.
The result is the same: If you want to use a theoretical Apple TV of the future, you’re still going to end up paying someone a monthly fee for a bundle of channels, the majority of which you don’t watch.
Depending on how the deal works out, you may end up paying a pay-TV provider, or paying a broadband provider plus a programming provider. But the results will effectively be the same — and your checks will probably end up getting cashed by the same people, regardless, since there’s little to no competition for the pipe that goes into your living room.
You can argue that this is terrible for consumers (because they subsidize waste), or that it’s great for consumers (because all the other consumers subsidize their favorite programs). But it’s a model that has proven very hard to dislodge.
If Apple — or anyone else — wants to blow it up, they’re going to have to find a way to get people the stuff they want without paying for everything else.
There are a couple ways of going about that:
- You could drive very big trucks full of cash up to the existing content guys, and pay them a ginormous amount of money to sell their stuff — say, pro football — directly to your new TV business, with the understanding that they might lose their existing deals with everyone else. Apple, Google and a handful of other big tech companies could afford to do this, but they have yet to do so.
- Or you could build up a whole lot of stuff that people end up valuing as much or more than the stuff they’re already paying for, and deliver that to your customers directly. Google and YouTube are playing with this, but the $200-million-plus they’re betting on “channels” isn’t an all-in bet. It’s just a test.
Meanwhile, if you want to play by the TV industrial complex’s rules, those guys are happy to play along. See: Google, which is in the process of competing directly with the established cable providers, but is still able to get cable TV programming — even from from Viacom, which is still suing Google — because it is acting just like any other pay-TV provider.
It’s fun to imagine a world where Apple helps get you your TV, and it’s very likely that an Apple TV experience would be much better than the cable TV experience you have now. Imagine ditching that craptastic TV guide for a sleek one designed by Jony Ive!
But unless Apple TV is going to offer something fundamentally different than the choice consumers have today, it’s hard to get riled up about this stuff.
For the record: So what does Tim Cook have to say about all this? Here’s the most specific answer he gave about Apple TV’s answer at the D10 conference in May — which is to say, a very oblique answer:
Walt Mossberg: As you think about improving the television experience, because you just said you’re thinking about that, can it be done with a box and leave the kind of big panel and everything to other people, and just really build a lot of smarts and software and other things into a box and not build the whole thing?
Tim Cook: Here’s the way, Walt, we would look at that is —
Mossberg: Whether it’s you or anybody.
Cook: We would look not just at this area but other areas and ask: can we control the key technology? Can we make a significant contribution, far beyond what others have done in this area? Can we make a product that we all want, because we think we’re reasonably good proxies for others? And so, those are all the things that we would ask about any new product category. It’s the ones we ask about products within families that we’re already announced. And so this is sort of how we think about it and how we look at it.