Tuesday, February 7, 2012 at 8:14 pm.
Why Apple Would Dare Partner With Those Evil Cable/Telco TV Providers
Why would Apple want to partner with these horrible monopolies when it is supposed to be a disruptor?
Because the reality is that they already have the dozens of content deals, millions of customer relationships, and high-capacity pipes into living rooms necessary for hi-def television, which Americans still enjoy watching for many hours every night.
Sure, Apple could try to piece parts of this together, but not for any cheaper than what cable will cost you — actually, probably for more money, which is supposedly why Microsoft stopped trying. And then there’s the bandwidth problem: If the ISPs start charging by the gigabyte, any cost savings of cutting the cable cord will probably go away.
Apple’s best bet right now is to offer you an amazing TV that has the best access possible to the full cable content lineup — over IP, without a set-top box — and then maybe compete with that via other forms of entertainment, such as iTunes, Netflix and other streaming video services, apps, games, AirPlay, etc. (Heck, how awesome would it be if the Apple TV just had a DVR that actually worked? Or a reliable, suitable replacement?)
For now, Apple can make its profits selling high-end TV hardware, just as it does with the rest of its business. And maybe the cable/telco providers — happy to keep their TV subscription revenue streams, happy to be gradually sliding out of the costly set-top-box-buying business, and happy to have a beautiful example of the real smart TV-of-the-future for everyone else to drool over — will even give Apple a cut, the way AT&T originally paid Apple a share of iPhone monthly service revenue.
Look, I’m with you: The coolest thing possible would be for Apple to rid your requirement for cable, bundles, horrible customer service, 6-hour “truck roll” home-visit windows, and all that stuff forever. I would love to buy HBO from HBO, baseball games from MLB, and Anthony Bourdain shows straight from his production company. Heck, I’d love to make and sell TV shows directly to Apple TV owners. And hey, maybe someday in the future, that will actually happen.
But it’s as unlikely now as it would have been for the iPhone to launch without a major cellular carrier. And who will ever forget then-Cingular Wireless exec Stan Sigman’s 5-act speech at the iPhone launch keynote? It’s true, carriers don’t sell and distribute TVs the way they do phones. But they still have a very tight grip on bandwidth and video service.
Anyway, start small, dream big. The TV industry is going to take a lot longer to disrupt than you’d like. But the joy of owning an Apple TV can start much sooner.