2013 will be a big year for the Apple TV platform. I think it is likely that there will be the release of both the next generation AppleTV stand-alone box and also a first foray into an actual, integrated “iTV.” The big news will be the incorporation of a TV App Store into the iOS ecosystem.
The “iTV” has been a much hyped unicorn for years, but Apple’s competitors, particularly Samsung, are getting closer to what we imagine as the “Apple TV” experience, that Cupertino would be foolish to not plant their flag in the ground for the territory that consumers have already granted it, at least conceptually.
The big, obvious idea that will enable this is the fact that Apple does not have to figure everything out—does not have to rewrite the economics of the television business—in order to deliver a truly satisfying experience to its customers. Navigating the contemporary TV environment with it’s 1,200 channels, some premium, some pay-per-view, on top of the “over the top” (OTT) options like Netflix, Amazon and Hulu—not to mention Apple’s own offerings is so cumbersome compared to the experience users have on their iPhones and iPads. Just achieving parity with users’ everyday experience with Apple’s mobile devices would be a huge step forward.
AppleTV
In a post on the Brightcove blog, CEO Jeremy Allaire described the next AppleTV box as having, “a new A7 quad-core CPU, [with] enough horsepower to deliver 1080p HD video and the most demanding gaming graphics; built-in front-facing sensors and camera; and enough storage for loads of games, apps, content, and recorded live TV. The device offers HDMI and digital audio output, a gigabit Ethernet port and built-in WiFi, as well as a two lightning ports — one for power, another for the included “coax dongle,” which connects directly to most existing cable TV hookups to replace your existing cable set-top box.” And they created a mockup (see below) with “ a sleek and slim form-factor that sits easily on top of or under any existing TV.”
Will this make it in time for the next version of the “puck”? I’m not sure, but it is a compelling concept. As to when the next AppleTV unit will be released, the two strong possibilities are either in March (with the next iPhones and iPads) or in June (with the next iOS release.) I think the June iOS slot is the most promising, because it is the App Store functionality of the next device that will be truly a departure from the existing product.
The “iTV”?
Although much of the functionality of an integrated Apple television can be achieved through an add-on AppleTV device and the iOS devices it interacts with, there is still a strong case for an actual “iTV.” Profit margins are thin and replacement cycles are long on living room TVs, but this Apple product could become a staple for schools, health care facilities, retail outlets as well as conference rooms for businesses of all kinds, as well. If such a product can interface seamlessly with the installed base of iOS products, it could be a “halo growing” innovation. If it can interface seamlessly with any mobile device, it’s a world-changer.
For Apple, it could herald a significantly larger share of all screens, and the economies of scale that go with it. The important distinction, and one that has taken the perfectionists at Cupertino a long time to see, is that Apple’s TV products can exist in parallel with existing cable services until the consumption of app based TV content changes the economics of the cable companies organically. There is no point trying to forcibly disrupt the business model of the content owners. Giving users the choice, side-by-side, of how to interact with their TVs should solve the problem for Apple without a shot being fired.
This does not mean that the cable companies will wither and go away. There are all manner of business models that can work for TV content, and an actual Apple style App Store environment is the best way to test them all.
The TV App Store
What has been started with the current AppleTV interface (see below), will become so much more powerful once developers can invent Apple TV apps and users can pick, choose and organize them like on any iOS device. The ideal would be for developers to gain programmatic API level control over the stream of content into your TV—both from the internet and from whatever cable provider you use.
As I wrote in one of my stories about Karen McGrane and her book Content Strategy for Mobile, what is required is true two-way APIs that can both direct revenues and usage data to content owners as well as granular access to that content to developers. Only then will we really be able to see how users really want to access and pay for TV content and what the shape of the new monetization landscape will be.
Credit: Forbes
