Apple TV is The Solution to HDTV Industry Problems

| Hidden Dimensions

"My experience has been that creating a compelling new technology is so much harder than you think it will be that youire almost dead when you get to the other shore."

-- Steve Jobs

There is a strong sense in the industry that the Apple iPhone will become a wild success. The most insightful article Iive read on the matter comes from Time Magazine -- "Appleis New Calling: The iPhone." In the final paragraph of the article, Time quotes Jonathan Ive and provides one of the most profound and insightful conclusions about Apple that Iive seen since Macworld.


When our tools donit work, we tend to blame ourselves, for being
too stupid or not reading the manual or having too-fat fingers. "I
think thereis almost a belligerence -- people are frustrated with
their manufactured environment," says Ive. "We tend to assume the
problem is with us, and not with the products weire trying to
use." In other words, when our tools are broken, we feel broken.
And when somebody fixes one, we feel a tiny bit more whole.

And that, in a nutshell, is how the Apple TV will shatter the best hopes of Comcast, Time Warner, DIRECTV, and Dish Network, to name a few. To be sure, theyill all still be around in five years, but they will never achieve the growth and dominance they seek.

Allow me to explain.

The HDTV Industry In Denial

The HDTV industry in this country has some serious problems, problems that are similar to the mobile phone industry. Namely, some basic human needs have become both subverted and overwhelmed by technological greed and meddling.

In the case of mobile phones, the simple human need to communicate with another person has been turned into what amounts to, to put it politely, testosterone poisoned executives whose intention is to nickel and dime Americans to death. Each customer is a revenue stream to be entangled in an ever increasing need to push buttons. Perhaps text messaging your vote during an NFL game is the ultimate example of that kind of titillation, but the end result is a system thatis broken. The iPhone will succeed, to everyoneis eternal amazement, because it fixes something thatis dramatically broken.

The iPhone will make us feel more whole.

Similarly, in the case of HDTV, we have many symptoms of a movie and TV industry that is going to get a lot more broken before it gets whole again. Here are just a few examples.

  • Dish Network partners with Lionsgate films. Fragmentation.
  • DIRECTV wants to become your Apple TV substitute. Fear of Internet TV.
  • Disney has struck a side deal with Comcast. Covering their bets.
  • HD DVD may get the jump on Blu-ray because the adult film industry is embracing HD DVD. Sony is clueless.
  • Motorola hopes to do for home TV what Apple did for the mobile phone. Hope is not a strategy.
  • Netflix wants to deliver movies directly to your Web Browser. Fear of Internet TV -- and Blockbuster.

In other words, all the players are in a panic, everyone is circling the wagons, everyone wants to strike a deal that secures their position no matter what. No one has a vision, and if they did, they couldnit execute it because of the scratch-your-eyes-out competition.

Letis look at just a few of the problems Apple can address.

The cutoff date for analog TV transmissions in the U.S. is February 17th, 2009, a mere 24 months away. Yet the vast majority of consumers are still having a hard time understanding High Definition TV. I asked a salesman at a Best Buy store in Denver how much training they get on HDTV before they hit the floor. The answer: "Zero. Get out there and sell!" The general technical confusion, retail indifference, and carrier dirty tricks, in turn, demoralizes customers about the prospects for a happy experience in the management of their video library and viewing experience. If you doubt that, reflect on the Sears experience selling iMacs a few years ago.

Apple canit solve most of the industryis problems, but they can deliver on an easy-to-use system managed by Apple in all phases from purchasing through delivery to archiving and display. Apple can help their customers enjoy the content instead of struggling to deal with the pandemic in the industry. Customers are frustrated over their options, the quality of the equipment, and constraints that donit serve their needs. The biggest problems Apple can bypass are:

  • Both the software and the hardware of set top boxes that include a DVR, from any carrier, are widely criticized as crappy. The Ethernet ports, if they exist, are crippled (for now). And if you buy an external, high quality TiVo-like DVR, youire locked out of the integrated pre-program mode from the carrieris channel guide. So says Walt Mossberg.
  • The HD DVD, Blu-ray war has customers thinking about...neither. Combo players are maybe a year away and will be grotesquely expensive. Hard disks are cheap and can be backed up. As I understand it, if you scratch your Blu-ray disc, the industry wants you to buy a new one.
  • So far, the quality of the HD players and media have been generally unspectacular. So says Widescreen Review Magazine. HD discs are priced unrealistically.
  • Lots of vendors would have you pay for and watch TV and movies on your computer, but most customers want to watch them in the living room on a big screen.

So where are we? Selecting an HDTV is hard, but the prospect of selecting a carrier and being subjected to their peculiar rules and constraints fills the bucket of frustration. Content providers abuse their customers with excessive DRM and the carriers mass produce the cheapest set-top DVRs for mass consumption possible. Thereis no funding or vision for something like Apple TVis software. Exclusive industry agreements make getting all the things you want impossible. You canit get the content you want on the display device you want, when you want it. Does that sound like a broken system? It does to me.

If Itis Broken, Apple Will Fix It

Right now, all the attention is on the iPhone because mobile phones are so badly broken, and theyire so tightly wired into our lives. So thatis where the biggest pain is right now. But after Apple fixes the mobile phone industry, the HDTV industry is next on their agenda.

There is no such thing as infinite choice. The movie and TV (and Internet video) industries are going down a rabbit hole of undisciplined and extravagant choice. Each company who is a player has intentions of dominating a niche and establishing themselves in the market. Each player has visions of glory, but only a few will succeed because thatis the way customers are. They tend to preferentially chose and that simplifies the market. And when the customers donit do it, mergers designed to eliminate irritating competition help things along.

The Macintosh, the iPod, and the iPhone form a coherent ecosystem. That ecosystem is stable and has a vision. As Jonathan Ive said of the iPhone, it fixes your problems and makes you whole. Apple will provide choice with coherence, DRM with grace, and content management thatis a joy instead of a nightmare. And theyill do it with Mac OS X, AirPort, and Apple TV.

There is no doubt in my mind that I would rather have a Mac Pro with a terabyte of storage under my desk with a consumer class 2 TB external RAID 5 (theyire coming) as my ultimate high-quality DVR. Iid rather transmit this content to an Apple TV, well engineered to drive my HDTV than be subjected to the lowest bidder, lowest common denominator, el cheapo set-top DVR that comes from the rusted racks in the Comcast warehouse. Or pay DIRECTV $300 for one and find out later, Oops!, if I want a great new feature, I have to buy a new one.

There is also no doubt in my mind that the collective minds of all the content providers and carriers will never be able to build a reliable content management system that is a joy to use. Intel Macs, Mac OS X and iTunes are better systems for managing personal video content than any software thatis going to appear on a set-top box. Period. Without Apple, the HDTV customer in 2007 will be relegated to selecting the least of many evils, and they wonit be very happy about their choices.

Apple TV is just the first of many products in that line. Like the iPod, it will get off to a slow start. There will be endless competing products and services that appear as if theyill relegate Apple TV to obscurity. Pundits will predict that Apple will never get a toehold in the industry. But in a few years, when the dust settles, the HDTV and video experience will greatly benefit from Appleis fix-the-problem skills in the same way they fixed the personal computer, its OS, the MP3 player, and the mobile phone.

The TV and movie delivery system in this country is now fragmented, fundamentally broken, and all too self-serving. Iim going to go with the company that makes me feel whole again. So will you. So will millions of others.

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