Apple’s Move Into Original TV Programming Will Radically Change the Whole Company

spaceship on television leaving orbit

This article at Wired just before the holidays caught my attention.

It looks innocent enough. It’s only natural that Apple, being on the verge of launching a new 4K/UHD Apple TV and having committed so much new money to hiring studio executives to create original TV content, should suddenly wake up and discover the implications of (a loss of) Net Neutrality.

Apple CEO Tim Cook
Tim Cook will face a whole new set of challenges in the original TV content universe.

But now I believe the implications of Apple’s new interests are broader than even that.

Before iTunes, Apple had long been known for the company that mostly delivers us our content. In time, MacBooks, iPads, iPhones and Apple TVs emerged in what might be called the sleepy years of hardware. By that I mean that Apple made great devices for people to use and access information and entertainment created by others. Services were a side business, a hobby. Apple had no particular axe to grind except to make the very best, secure, integrated hardware and software.

I now suspect that Apple’s engagement in its own original TV content will create a new set of imperatives for the company. The Apple TV won’t be just a hobby. It will become a critical instrument in Apple’s quest to steer eyeballs its way. That means Apple will have to think about its delivery system in the context of the entire TV industry. New competitive frictions will arise.

Naturally, Apple will have to think about Net Neutrality and its corporate stance, as described above. Apple will have to think about transmission standards for video and audio and how to both play with the Big Players and also compete with them. It will have to think about how customers perceive its position in the TV electronics marketplace. It will have to think about how its reputation for building only the best products translates into standards for TV content. Like the Disney company. It will have to think about how the design and evolution of its own computers, tablets and phones support its own entertainment endeavors—perhaps in new ways.

spaceship on television leaving orbit
How far can Apple go?


Apple New Again

The sleepy years of hardware and iTunes will emerge into a company that thinks first about services and its self-created entertainment. It will still make the best hardware, but the company’s involvement in the business of entertainment will have a broad and deep influence in how the company interacts with the market as a whole.

The TV and movie industries have fought hard to make sure Apple didn’t do to them what it did to music. The question is, now, can Apple develop a new maturity, technical breadth and acumen, organizational structure and operational excellence to meet this new challenge?

And still remain true to its roots.

Next Page: The News Debris For The Week Of September 4th. Artificial intelligence at gunpoint.

3 thoughts on “Apple’s Move Into Original TV Programming Will Radically Change the Whole Company

  • There’s a level of ignorance about how content distribution networks work. Apple has always had a reputation for the best streaming experience, BECAUSE they’ve always had their content & servers duplicated all over the world, close to consumers. So has Netflix. Net Neutrality as often discussed – why should providers have to put servers all over the place? – while a financial issue for sure, is ultimately a technical issue. Things just work better that way, always have and always will. Netflix trying to claw back that investment is a straw man argument not based in any fact.

    Wouldn’t it be great if the entire iTunes movie and television library was available in Apple’s streaming service, not just original content? Apple has the capability to do this, and if they want people to pay for it, they will need to have a full catalogue. Eventually copyright owners will start their own services, like Disney and bundled services like Netflix will be left with only their original content. That’s why it makes no sense for Apple to buy Netflix, because whatever value and advantage it has now, will at some stage be reduced to just another original content channel. Makes no sense for Apple to pay service price for what will eventually be only a channel.

  • 8K huh?

    I’ve got the big flat panel smart(?) TV w/surround sound that can show the truly lame content in stunning resolution complete with even-more-lame commercials showing every 10 minutes or so. Rent or purchase a quality movie? Are there any (new ones?)

    I see Apple’s produced content thus far is “Carpool Karaoke” and “Planet of the Apps.” I’m not getting it, but then I’m sure I’m not the target audience.

    Android hardware is claimed to be the cat’s-ass but Apple fans (count me as one) opine that it’s the OS that is the differentiator. How is this any different?

  • John:

    As one who does not watch much TV, I have a hard time getting overly excited about either streaming services or hardware (4K, 8K, 16K? – wake me up when we get to the holodeck, then I’ll be all in); however, my role of as a husband and father keeps me in the game. I purchased Comcast and Netflix upon moving my family to the US, and at the behest of my wife, purchased a then state of the art flat screen TV with surround sound. Duty sorted. Were it up to me, my iPad Pro with an internet service would suffice.

    That said, I am concerned about net neutrality, or the lack thereof, for all the reasons that have been discussed at TMO and elsewhere over the past months. Despite all the market dynamics and ‘capitalism at work’ arguments in favour of disbanding it, many with which I concur to a point, the one incontrovertible argument against it for me as a consumer is cost. The costs of differential treatment and access, be it to Netflix, HBO or any content providing competitor, will be entropic – they will flow downhill to consumers, some of whom will eventually get priced out of at least some services. This is why governments institute either price regulations or regulate industry behaviours.

    Take rent. In most high income countries, governments institute policies that regulate rent, such that landlords are not free to charge whatever they wish or raise the rent, without warning to whatever they decide. I have lived (and do live) in countries where that is not the case, and where a landlord can charge one tenant one amount, and another a different amount, simply because he’s a foreigner and can presumably ‘afford it’. This is the argument many have made regarding Netflix and ISPs. Utilities are another example. The moment a company is come countries realise that a ‘rich’ foreigner is the customer, the bill mysteriously goes up several fold – even when I’m travelling and not using a single light bulb. Were I subletting my spare rooms abroad to others and charging them for the service, I would have little choice but to be entropic and pass those costs on to my tenants. This is what happens in a relatively non-regulated environment where market dynamics alone control the price of what many consider an essential service, like housing, utilities, fuel or, I would argue, internet access.

    At some point, the model becomes unsustainable for the current market, and forces compel a reversal (contraction), a collapse or a new market steps in to the rescue. In the case of unregulated rents, it is usually large corporations who pay exorbitant rents in the cities in LMICs, while the millions of ordinary citizens, formerly the critical mass of rent paying urbanites, are displaced to ‘informal housing’ also known as urban slums, squatter settlements and favellas. Before anyone celebrates these alternatives as ‘market forces at work’, those of us who live in LMICs can point out that both of the latter responses, market collapse and new markets, can create substantial social and political instability. These are not cost-neutral, benign alternatives to inclusive, sustainable markets. How this might play out in the context of content consumption in high income countries might be surprisingly costly, politically and socially.

    Non-paradoxically, the same driver that leads to displacement may restore balance and inclusivity, particularly if it interacts with greed and rapaciousness. If individual companies, like Disney, continue to follow the model of HBO and others to not only develop their own content but charge separately for it, at some point supply will exceeds demand, specifically sheer consumer purchasing power, at which point supply will contract. If it does so sufficiently, and becomes non-sustainable for the individual content creator model, the market might resort to the Netflix model or some derivative thereof.

    My thought for Apple is to leverage their content creation, should Apple go that route in earnest, to become a major player as an inclusive content platform or streaming service.

    Regarding AI, while I believe that Elon Musk is wrong about many, if not most, of his doomsday AI predictions, I concur with his assessment that at least some governments will seize top tier AI technologies at gunpoint on the pretext of national security if necessary, or no pretext at all where the rule of law does not apply. AI, not devices, including computers and other non-smart infrastructure, are the future of power and capability, and will markedly change not simply the human-technology interface, but the balance of power as well.

    Welcome to the post-PC era.

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