The TV Industry is Apple’s Gordian Knot

| Editorial

Apple makes an enormous amount of money by selling hardware, and hardware generally doesn't change over its lifetime. That's always been satisfying. However, in the TV industry, services come and go. Perhaps innovation by Apple consists of coping with change rather than eliminating it.


One of the most notable things about the world of TV and movie entertainment is the relatively short duration of contracts and licences for content. The reason for that, of course, is that the content holders want to be able to periodically review who they're working with and how much they're charging. Chaos ensues.

The impact of relatively short term agreements is all over the news nowadays. DIRECTV has dropped The Weather Channel thanks to the inability of the two companies to come to terms. Charlie Ergen, the CEO of Dish Network Corp, fought tooth and nail in the courts to preserve Ad Hopper, ostensibly for the good of his customers. That is, until Disney used its clout to put a stop to it for its own content. (Some argue that Mr. Ergen only introduced Ad Hopper as a weapon to keep carriage fees under control.)

Customers Suffer - What Else is New?

The lesson is that in this era of ephemeral TV services, new services and short term carriage agreements, it's risky and confusing for customers. I suspect there are some who just chuck it all, cut the cord, and live in Netflix. For others, it's good to have options, but having multiple sources or jumping between carriers (which could mean ISP) when annoyed is expensive and isn't a long-term solution. Are there innovative ways for Apple to reduce our risk instead of elevating it? Provide an overlay with a sense of coherence and permanence?

A lot of the analysis of the rumored Next generation TV project by Apple has focused on new ways of discovering and watching content, but the TV industry is so dynamic that encapsulating a lot of content in a more expansive form that the current Apple TV seems almost impossible. In my mind, the innovation would come from allowing the customer to better cope with all the changes in content availability rather than being victimized by them. How can that be done?

The foundations are being shaken, but the foundations are also fighting back. The loss of TV stations by carriers because of fee disputes, a broken advertising model that's being propped up by mangled copyright law, and new, disruptive technologies like Barry Diller's Aereo that instantly end up in court are a double edged sword.

Solving this giant puzzle without ending up in court while delivering something new, innovative and wonderfully satisfying is the challenge of the decade for Apple. I'm not surprised that we haven't seen anything yet.

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Lee Dronick

And Apple, like Alexander the Great, will take sword to it.


My wife and I are two of those who “chucked it all, cut the cord, and live in Netflix.” It’s been a year now, and we have no regrets. We have discovered so much quality programming that we could not get on cable, and we watch it when we want to. We also watch the occasional network program via antenna (the HD quality is noticeably better than the compressed cable signal.)

The fact that we really don’t miss cable programming ought to scare the cable companies, but they are so out of touch with what today’s customers want (as well as being inherently evil) that I doubt things will ever change for the good in my lifetime.

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