Posted on 08/16/2012 10:00:23 AM PDT by Swordmaker
It looks like Apple’s mysterious ‘AppleTV’ project may not be so revolutionary — or disruptive — after all.
After months of speculation that Apple will upend the TV business, allowing consumers to ‘cut the cord’ and buy TV channels a la carte, the latest word is that Apple will not threaten cable operators and their media giant partners. (Related Link: Ready for Apple TV?)
The Wall Street Journal reports the tech giant is in talks with cable operators to use its device as a set top box. If this is true, cable and media moguls must be breathing a huge sigh of relief. (Related Link: Apple in Talks With Cable TV Networks - Report.)
The Journal says that talks are about using “an Apple device as a set-top box for live television and other content.” Though nothing has been settled, Apple would offer a service from the cable operators, likely charging them a fee — it takes 30 percent of much of the content it sells. Ultimately Apple would offer a cool interface to seamlessly navigate TV and web content.
(If this is true) Bottom line: Apple is focusing on the box and not the delivery system because the content creation and delivery companies are just far too entrenched to be disrupted. The largest media company and the largest distribution company Comcast struck a ten year distribution deal earlier this year. That means it’s going to be virtually impossible for Apple to offer channels a la carte. These two giants (and their rivals) are committed to maintaining the status quo — selling huge bundles of channels. Even if Apple offered a huge amount of money for, say, just Disney Channel, or ESPN, they would be unlikely to break the model. Selling individual channels would mean a huge hit to both companies’ bottom lines.
The media giants and distribution companies say it’s not just in their best interest — it’s also in customers best interest — to maintain bundles. By paying for channels they don’t watch customers are subsidizing the smaller channels that not everyone would select. Disney CEO Bob Iger has explained to me, if everyone only paid for the 10 channels they thought they wanted, smaller channels wouldn’t have the financial support survive, and no one would get all the channels they wanted. Both Iger and Time Warner [TWX 42.60 -0.09 (-0.21%) ] CEO Jeff Bewkes have stressed to me that customers really want the choice of dozens or hundreds of channels and don’t realize just how narrow choices would become without bundles supporting the system.
Yes, an Apple TV could eat into cable carriers business — people could buy more video-on-demand through Apple, and perhaps less VOD from Comcast, DirecTV or Time Warner Cable. But media companies are wary of giving too much control to Apple — look at the disaster that befell the music industry when Steve Jobs controlled all transactions.
So we can expect media companies to drive a hard bargain with Apple, to prevent it from securing a monopoly on video on demand, and to protect their lucrative relationship with cable carriers.
Fair points. The only riposte I can think of is that their existing relationship with the Disney folks might make a buyout more like a merger, where Apple would leave most of the Disney/ABC folks in place (at least at first), but set general direction from Cupertino rather than Anaheim.
APPLE TV has never made any sense to me.. I’m honestly suprised the product hasn’t been killed yet.
Ala Cart purchasing would have given it a reason to exist, but honestly I just don’t get it.
I can BUY/RENT a movie from Apple Itunes, at far higher prices than Netflix or even my local cable provider... What’s the point?
We buy shows from iTunes for the Apple TV. The shows have no commercials. Do Netflix shows have no commercials. Hulu shows commercials and doesn’t show the tv shows sometimes for a whole month after airing.
I decided to cancel my cable too. About the only station I watched was Fox news, and when they went the way of screaming heads, I decided it was a waste of time.
Talk radio and the internet (FR) give me all the news I need, and there are always clips of the really good stuff. Someone puts them up on YouTube.
And, important hearings from C -Span are always available on the net.
Time to send a signal to the coastal “mediots” shoving their agendas in our eyeballs.
How about a FReeper boycott of cable/satellite? Maybe many thousands of letters, all canceling on a certain date would get their attention
Maybe you didn’t know - I get netflix on my Apple TV, and pay a set fee each month (8 or 9$) if I remember right.
I can watch without commercials, all the better TV series I can handle. And, there are really good shows from England available...
I’m hearing that Disney attendance is down; the tix are EXpensive and the economy is starting to get to them.
If so, I wouldn’t buy their stock. Apple may be thinking the same thing.
Apple builds hardware.
That’s what they do.
Everything else is provided just to facilitate selling hardware. They may make a sizable profit on non-hardware sales (iTunes), or sink a lot of money into services (iCloud), but it’s all just to feed back into promoting more hardware sales.
Apple doesn’t want to move into large-scale content creation. It’s just not what they do. There’s too much distracting overhead to make it happen, effort which doesn’t translate well into more hardware sales.
Better to build an Apple TV ecosystem which will have content creators beating down the door. iOS 6 may very well have an Apple TV App Store; give users the choice of app “channels”, and you’ll see Disney & Viacom & NBC & near everyone else rolling onto the platform almost overnight. Better to create a “build it and they will come” environment than to pay billions to force them to; you start paying and they’ll hold out for more, but give users a choice and providers will climb over each other to get there.
Disney is so dated, they just renamed “Tomorrowland” to “Yesterdayland”.
I expect Google to try to become a player eventually.
Google TV crashed and burned.
Google _is_ getting into the “Cable TV” market, starting in Kansas City with gigabit Ethernet and a big TV-content push. I expect the fast internet part will do well, but the “TV” part will give way to streaming services (Netflix, Hulu, etc.).
Google’s “thing” is ads. Whatever they can do to deliver maximum-value ads, mostly via data mining, they will. They don’t care _what_ that data is, just that they can get at it and mine it; if viewers want NBC shows Google will find a way to deliver & monitor ‘em, and if viewers drift away from that toward Netflix-type sourcing then that’s OK too. If getting data means developing self-driving cars so Google can watch where they’re going and give them more time to look at ads, so be it.
Buying into the content creation market requires dedication to content creation. Apple and Google don’t care about that; Apple just wants to sell you hardware and Google wants to put ads in your field of view ... _how_ that happens, neither wants to get locked into.
Netflix has no commercials. $8/month all-you-can-watch. Only caveat is their library, albeit huge, tends to not have the latest still-high-value content (there’s iTunes and RedBox for that), and some of the titles come and go (and come, and go) depending on licensing status. There’s more than enough to watch - commercial free.
The theme parks are an insignificant percentage of the Disney money making factory. They just produced the 3rd highest grossing film in US history (The Avengers), financially they’re doing fine.
I think that ATV is, at present, a foot in the door sort of thing. And even at $99, they’re probably still making money off it.
Apple plays the long game.
It wasn't really necessary with Jobs on the Disney board and being the largest single private shareholder by far, and with his Pixar folks running much of the Disney empire.
What is great about the apple is you can mirror iPod , iPhone and iPad . And now the apple Mac computer in the living room to the back bedroom . It's very good. So technically it does anything that the Internet does on any of those devices and computer. It is awesome at the end of the night.
Cheers !
My Apple TV gets Netflix. Plus it’s the best device I’ve tried so far to stream my ripped DVD collection to the TV. It streams better than the XBox or PS3, and does it while making a lot less noise (actually, none) and using much less power.
Funny thing about keeping those bundles because you won’t make as much money via a la carte...when the dish/cable gets cut they get $0. I just ditched the dish because I was sick of paying for 98% of the channels that I didn’t want, or have time to watch. Got new TV specifically so I could get an Apple TV for the HD Netflix, iTunes, Hulu and anything else that comes down the pipe. Don’t miss it at all.
Thanks for the link!
I just bought the ATv.
Link Bookmarked...Thanks!
welcome...All of the apple functions are there. I use the netflix app since I have an account, but the XBMC with NAVI-X platform/program makes netflix not really needed. It Rocks. Just research it a little.
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