Why the TV industry is vulnerable to Apple

While the TV industry is “starting to embrace the Internet as a vehicle for distribution, they are doing so reluctantly. If they had their way, they would keep total control of this distribution for themselves and drive their viewers only to their dedicated sites for viewing their shows,” Tim Bajarin writes for Tech.pinions. “But the Internet has forced them to open up a bit and little by little they are doling out their top shows to dedicated partners who they trust to help them keep some semblance of control so that they can maximize their earning potential and if possible try to keep their customers within their network family as much as they can.”

“However, in this world of digital content, they are now realizing that while they ruled the roost in the world of broadcast television, they are just another channel among thousands of channels that consumers can choose from for viewing video content. But what they don’t seem to get is that in this world of digital, they will need new distribution partners and that they will not have as much control over them as in the past,” Bajarin writes. “And I also don’t think they really understand the idea that people want to have access to that content anytime, anywhere and on any device they own.”

Bajarin writes, “Now, I don’t know what type of deal Apple is offering the networks, if any at all. But I do know one thing. Apple could become one of the most powerful video network distribution companies in the future and to not embrace what Apple is doing could be very painful for them… Now enter Apple TV. While many people think of this idea of being a physical TV, they miss the real point of what I believe Apple is doing. At the core, I believe they are moving towards becoming a powerful distribution network for video. And while I do think they will have a cool TV someday in their product mix, the reality is that every iOS device and every Mac will become an ‘Apple TV.'”

Read more in the full article – recommended – here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

27 Comments

  1. I detest the fact that my access to television broadcast entertainment, news, and sports is limited to a eiher a local cable monopoly or a satellite monopoly. If Apple was to provide me with the same choices via wireless I would be exceedingly grateful. Apple’s entry into television would likely reduce costs overall and improve service. Gotta love competition as a consumer.

    1. Your access to broadcast entertainment is limited to your antenna’s abilities in the area you are in. Your access to cable or satellite entertainment is limited to the vendor you’ve chosen and paid for, and the distributors _they’ve_ chosen and paid for. It’s a very complex jungle of rights and issues, and even Apple ain’t able to make it simple without massive licensing and distribution contracts, along with hired reception farms and infrastructure. Making it simpler in the home is about the only choice, and this still requires access to a lot of information that is, as of right now, available, but painstakingly so. I.E.- for me to learn what I can access via broadcast and/or cable, I need to check not only something like TitanTV and my cable’s website, but usually have to actually scan the channels, because what is on may or may not be what is listed in any of the places I can look. Messy? You bet. Add that into the myriad of remote devices needed to do all this, and the computer alongside, and the time involved, it’s a wonder we bother with TV at all, and some of us grow nostalgic about having only four or so choices in the ‘Golden Age’ of TV, namely the VHF progenitors, CBS, NBC, ABC, and PBS, with a smattering of UHF upstarts.

  2. TL;DR edition.

    Apple has a lot of customers in its iTunes user base.
    Networks could leverage this as a means to distribute content, but they have to think outside their current ad model.

    Don’t know how this is new information to anyone.

    1. At the eleventh hour, even tired stories about the breathlessly anticipated new products will generate page hits. Also, any story that pillories the television honcho gets my attention, as they just as hated as the telco thieves.

      1. The “why” has become self-evident; it’s the “how” that I’d like to see get more attention.

        Wouldn’t it be nice if the setup for iOS 6 included all the services from pay outlets like HBO’s Go, Cinemax, Movie Channel, etc. as checkboxes that could be centralized under an Apple-created iOS app and synced through iCloud? Why not capture the attempts by Cablevision, DirecTV, DISH, et al?

        C’mon Eddie (Cue): I know you live for this stuff – surprise/delight us!

  3. Finally a point of view that I have been holding for a long time. It is about the video and not the ‘channel’. We want content when we want it on our schedule and we want very very well targeted ads to pay for it. We should not have to suffer through ads that have no relevance to our lives and be given an easy way to choose how to pay for the videos with either ads, auto credit system or something else not yet imagined.

    1. Every television program is paid through advertising. How do you expect Apple to fund programming without advertising? Will you be willing to pay hundreds of dollars per month for the privilege of not having to endure advertising?

      1. The networks don’t get paid hundreds of dollars each month for each subscriber from advertisers. The amount we pay for cable covers the infrastructure and some of the programming costs. The programs only cost them pennies each per subscriber and that cost is covered by advertising. If Apple wants to change the paradigm then it won’t be status quo charges of ‘hundreds of dollars’ that you imagine.

        1. Cable companies don’t create content. They license it from networks. Your cable bill pays for those licenses, infrastructure, etc. The advertising money goes to each network, like NBC, ESPN, Discovery, Disney, etc.

        2. You said it! The programs cost “pennies” only because of the advertising that distributors are obligated to broadcast with the programming. Of course, the distributors could broadcast the same programming without advertising, but then they would have to have to pay the full cost of production AND pass along the expense to you.

          1. Who do you think pays for the advertising? We do when we buy stuff. I’d prefer to have some control over what content my money pays for, than to have the decision made by some coke-snorting pervert in an ad department.

            The more of this useless baggage we can cut out, the better for all of us.

            1. You are completely delusional if you think that you have the ability to control businesses that employ thousands and you are excluded. Then again, you may have trillions of dollars stuffed in your mattress and a convincing argument, but I doubt that you have either.

            2. Fortunately for me I don’t think those things, thus I am not delusional. I would prefer to live in a world where I do have control over what things I pay for, and to choose not to pay for things I do not want. would you not prefer that?

    2. If you don’t want to see ads, then you’re going to pay quite a bit for your programming. As an example, the NFL just signed a 9 year TV rights deal with NBC, FOX and CBS for $1.93 billion for the first couple of years, and increasing to $3.1 billion per year at the end. That doesn’t include the $5 billion deal signed by DirecTV last year or the $1.9 billion per year ESPN deal which runs through 2021.

      Without advertising revenue for these events, you will pay the bill. It won’t be priced like some UFC or boxing pay-per-view event — think MUCH more. And don’t think for a minute that either the networks or the NFL is about to give up that kind of revenue.

      Everybody whines and complains about ads, but advertisers pay for your favorite shows. Just DVR them and fast forward.

      Or get out your credit card.

        1. Your ability not to comprehend the obvious is astounding. You are so fixated on your own delusional perceptions how the real world functions that you are incapable of understanding simple facts when they are clearly presented.

  4. Please – Please – Please, Apple, come up with another way to buy TV shows. I spent an hour on the phone yesterday with DirectTV to have them extend my six month credit of $46 per month. Dish states they’ll sell me similar service for $50 less per month. You must be prepared to state you will cancel the service before you can get credits. I watch a max of 29 channels, and pay for at least 200. Get on it Apple.

  5. With over a hundred billion dollars in their war chest and more on the way, (a lot more), and with their recent history with Disney and Pixar, should Apple ever decide to set up a content source to provide Apple exclusive content, they certainly have the means to do so. Apple likes to be the hardware and has been the channel for music only, but for movies, that need not be the case. They could easily produce their own content. Sooner or later the others would have to acknowledge it. A couple of hundred million dollars in production cost to make a block buster would not even put a dent in their war chest.

    1. The problem with setting up exclusive content is that you either have to pay more for it, or you have to create it yourself. Apple wants nothing to do with creating content. Delivering content is a service Apple provides to help it sell its hardware products. Having exclusive content could help sell hardware, but it’s a question of how much and under what circumstances, otherwise you spend too much money.

  6. From what I have read the TV industry is not being measurably affected by the web. Viewership is up, not down, as is revenue.
    IF Apple is in fact planning to introduce a new way of consuming video content it must surely be distinguished by the UI (Siri?) and not the actual content itself.
    TV is not like music, as ‘opsono’ pointed out so eloquently it’s a jungle. My thought is that SJ was talking about the UI when he said he’d “nailed it”, and I for one hope that this is the case. I have AppleTV (both) – to shut down after watching a movie on Netflix takes no less than 15 operations.
    But perhaps I’m wrong and they have some new paradigm to offer. Whatever it is it’ll be in my living room before you can say ‘Tom Sawyer’.

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