As the world breathlessly awaits the arrival of the Apple television this fall, (or doesn’t, depends on who you talk to), some pundits are saying it will be the final nail in the coffin of the cable companies. Forbes contributor Eric Jackson doesn’t think so. Let’s take a look at his argument.
People who believe in this scenario say Apple revolutionized the telecom industry with the iPhone introduced 5 years ago so why wouldn’t they revolutionize cable in the same way.
Jackson has some bullet points listed, showing why people believe Apple will revolutionize the industry:
- Everyone feels price gouged by their cable companies
- They want their ESPN but not their Disney Family Channel
- This bundled cable pricing is inefficient and Apple can make it more efficient
- Apple TV will launch a pure “a la carte” unbundled pricing model for video content like they did for musical songs on iTunes
- Apple is strong enough to force this change on the market
While we could be heading in this direction, Jackson says it could take 10-15 years to get there. And technology will change a lot over that timeframe.
Jackson feels that Apple is far more likely to partner with cable companies instead of killing them. He has his own bullet list for that.
- First the analogy is wrong. If Apple was going to kill the cable companies with TV, they would have also had to kill the carriers when they introduced the iPhone. They would have had to come up with their own wifi transmission system to bypass the carriers. They chose to partner with them. And they will choose to partner with the cable companies.
- Content rights make partnering a better strategy with TV – at first.
- Hollywood makes more money and produces more content with the status quo bundled model. Apple (through Pixar’s ownership by Disney and cross-board seats) is very sympathetic to these interests of content makers.
- Steve Jobs’ spouse is the biggest holder of Disney (DIS) stock and Bob Iger serves on the Apple Board. Do you think Tim Cook went in to a recent board meeting to discuss his strategy of how to let consumers buy ESPN on a purely a la carte basis?
Jackson’s thoughts of what Apple will do with the Apple TV fall along the line of Apple making a truly Internet connected TV, not the clunky and non-user friendly interfaces of competitors, Apple does the combo of hardware and software better than anyone, and that’s what will make the user experience “sing”.
Siri will be a part of it of course. She’s going to learn your viewing habits and start making suggestions. Get’s rid of all those damned buttons on the remotes too.
Apple will be on four screens in your home, not just the TV. There will be the Mac, the iPad, the iPhone, and the TV. All connected. All talking to each other. There are other manufacturers who make 3 of these 4 screens (e.g., Samsung and Google) but no other competitor who makes all 4. That’s huge. It’s a gigantic opportunity in front of Apple.
Jackson’s article goes into deeper detail than we have the space for here, and I highly recommend reading it. It’s an interesting point of view of the “Apple is Gonna Kill the Cable Companies” arguments.