Apple is Figuring Out the TV Industry. Competition Beware

3 minute read
| Particle Debris
buy an apple tv 4k

Wonder Woman in 4K/Ultra HD with an Apple TV 4K

There are certain levels of infrastructure, expertise and consumer acceptance that are required to be a major player in the TV industry. Apple is now properly putting those pieces into place better than before.

The Particle Debris article of the week comes from the amazing Jonny Evans at Computerworld:

Not only are the initiatives in TV that Apple announced at WWDC 2018 likely overlooked by others, author Evans own take may also be overlooked. To punctuate his analysis, Evans cleverly uses Apple’s announcement of Dolby Atmos as an anchor to point out how much more is going on with Apple & TV.

By the way, here’s a great discussion of Dolby Atmos itself by the very astute David Katzmaier at CNET .

The Evans Thesis for Apple TV

The short version of his thesis is that things have changed quickly in the TV industry, and Apple is exploiting that change with technology and new partnerships. (And, I’ll add, its own content. More on that below.)

Apple was thought to be having conversations along these lines with cable TV firms some time ago. At that time, those conversations seemed to come to little, but time, customer need, and (indeed) the cable and broadcast industry are also undergoing vast change.

The best cable firms now understand that their role is one of content curation and customer support, and they recognize that as more agile competitors enter the space, building close customer relationships is no longer a sideline to their business, but has actually become their core business.

To put it another way, the legacy cable/satellite companies are starting to understand that they cannot keep up with highly technical companies like Amazon, Apple, Google, and Netflix who can, in addition, curate, create and deliver great TV content. Nor have they been able to become much admired along the way. Evans elaborates:

Apple’s commitment to regular software updates and its vast developer ecosystem means its offer stands out in contrast to the competition. Fire TV is popular, but what it provides is relatively limited. In the U.K., even the most diehard cable TV users now find themselves using Sky/Now TV and/or an Apple TV for their content choices.

Again, casting the argument from a different perspective, the cable/satellite companies have been solving the wrong market problem with the wrong business model and the wrong investment in technologies. Partnering with Apple makes much more sense—indeed and even has a sense of urgency. This is not the first time Apple has outmaneuvered competitors by the smart investment in specific, forward-looking technologies. (Otherwise all our iPhones would be built by IBM and Microsoft.)

Apple Strengths Emerging

As analyst Toni Sacconaghi Jr. (AllianceBernstein) recently pointed out:

YouTube TV remains a shockingly good deal. And remember, this is with no yearly contract, and no hidden fees.

Cable companies are not tech companies … Their apps never work quite right. The user interfaces lag. The streams don’t buffer properly. Cloud recordings mysteriously fail to record.

WWDC 2018: Zero sign-on announced.

Apple TV technology marches on. Must not be underestimated. (WWDC 2018)

Consider:

  1. The Apple TV 4K with support for Dolby Vision, Dolby Atmos, HDR10 and HLG is becoming a attractive box that can be substituted for awkward, hard-to-maintain, cable boxes. This wasn’t quite so obvious to cable companies two years ago (before the Apple TV 4K) when they thought they could out-muscle Apple technically. And didn’t need help.
  2. The Apple initiative to create its own compelling content comes into focus. I call it the “Netflix Effect.” It goes like this: “Why bother to subscribe to cable, with its awful customer support, contracts, penalties and expensive bundled subscription when one can watch a universe of great content on Netflix, commercial free?” Delivering content isn’t just a “me too” idea. It’s intrinsic to the business model. And, for those who elect to use an Apple TV, they watch with a highly secure, frequently updated tvOS.

Apple is staying with this game, putting desirable technology in place, and making its customers very happy. While there was a time when Apple approached the industry with a little too much arrogance, today, Apple is working bit-by-bit to undermine the legacy business model of cable that no longer works.

Apple TV 4K. Not just a TV box. A platform.

In addition, once Apple starts delivering its own great content, the handwriting will be on the wall for traditional cable/satellite subscriptions. The choice is to either fail technically or figure out how to ride on Apple’s coattails.

This analysis by author Evans, while UK/EU-oriented, brings the wholistic argument and Apple game plan home. Check it out.

[Note: Particle Debris is just one page this week.]


Particle Debris is a generally a mix of John Martellaro’s observations and opinions about a standout event or article of the week (preamble on page one) followed on page two by a discussion of articles that didn’t make the TMO headlines, the technical news debris. The column is published most every Friday except for holiday weeks.

2 Comments Add a comment

  1. techrules

    What bothers me about Apple approach is them willing to give up viewer data.

    ““Apple TV service will share viewing data with networks, report claims”

    Hope they can figure out a way to do it without doing that.

  2. wab95

    Interesting reads, John.

    Although I’m not much of a TV consumer (apart from the news), and confine most of my recreational use to the weekends, I am intrigued by these technological developments.

    I also concur with your assessment about the value of Apple working ‘bit by bit to undermine the legacy business model of cable…’ I think that this is shrewd, and not unlike the quiet subversion in which Apple are engaged in certain global markets governed by repressive regimes.

    Some of the most penetrating and sustained revolutions have had the most inauspicious beginnings. The key is to survive long enough, and make sufficient headway however modest, as to first become compelling and then resistless and inevitable.

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