Here’s What Will Make The Apple TV Different

Apple CEO Tim Cook is interviewed by NBC News anchor Brian Williams tonight, and in a preview clip, he hints that Apple has something brewing in the TV space.

“When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years,” Cook told Williams. “It’s an area of intense interest. I can’t say more than that.”

As it happens, on Tuesday of this week, Les Moonves, the CEO of CBS, said that he met with Cook a few weeks ago, though he wouldn’t say about what. Last week, Time Warner CEO Jeff Bewkes insinuated that he also met with Cook recently. Apple is clearly working on a TV product, but given the current state of TV sets and cable boxes, what would make it different?

The two keys are software and content.

An Apple TV set will undoubtedly feature the software that the Apple TV product currently has. It makes it easy to watch videos from Netflix and iTunes on your existing TV set. That said, at this moment in time, Apple needs to give customers access to the shows that want to watch in order to have a succesful product, that is the content side of the equation.

There are two ways to do this: partner with a cable or satellite company, or partner with the content companies themselves.

In the cable/satellite model, Apple would essentially become the set-top box provider, while the cable company provides the feed of content. The problem with this is that unlike with the iPhone, there are no national cable companies (they are regional monopolies), and the two satellite companies aren’t big enough to partner with on their own. Too many potential customers would be left unable to take advantage of these limited partnerships, and the cable/satellite companies would be giving up too much control.

The more tempting model would be to partner with the content companies. Given the statement by Moonves, it sounds like talks have been happening there.  In that case, Apple would essentially become a cable company itself, selling viewers packages of content over the internet.  Apple would be able to control the software experience entirely, and still provide people with all the shows they want.

The problem with that is that it seems anathema to what Apple has done: disrupting business like the music business, or the phone market. Apple may want TV networks to sell themselves a la carte in the App Store, but if  bundling networks is what it takes to make a successful TV product, it is something the company would probably do.

It would be nice if Apple waltzed in and shook up TV’s business model, but that hasn’t been its modus operandi. Rather, Apple produces a product (a music player, a phone, a computer) that is better than its competition Once consumers realize how good it is, and buy it in droves, then Apple shakes things up. TV probably won’t be any different.

PS: As for the hardware, it will likely be extremely attractive, but given the current state of TVs, which are already just giant screens, hardly a giant leap forward. take a look at the new line of iMacs for a sense of what it will probably look like.

Publish date: December 6, 2012 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT