How Apple TV May Finally "Crack It"

I’d like to create an integrated television set that is completely easy to use. It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it.
— Steve Jobs

Based on this Steve Jobs quote from the Isaacson biography, there's long been speculation of an iTV, with rumors periodically emerging from China that Company X is working on it for Apple. Of course, Apple could introduce a TV tomorrow if it were interested in jumping into a mature, crowded, commoditized, low-margin business where differentiation is nearly impossible. Anyone who tracks the industry at all will tell you the hardware is trivial. The challenge is the content.

Jobs saved the music industry, but TV and movie moguls don't see the parallels with their businesses. They have reliable revenue sources and wield immense power. Why unilaterally cede your individual, corporate and industry control to Apple if you don't have to? Arguably, Jobs is the only person who could have stood a chance of convincing video owners to engage in a different business model, and he couldn't do it. Obviously, no one's been able to do it since.

So then what is the Apple solution to which Jobs alluded? It could be that Jobs was simply wrong or overly optimistic at that point in time. But I'd argue the solution, as always, is content and if you can't work with the system, you work around it.

The future of TV?

The future of TV?

In that light, Apple TV, that long-running "hobby", could prove to be the answer. Late last week, 9to5Mac posted a sourced rumor that a new Apple TV is coming the first half of this year, with beefed up internals and an operating system based on iOS. Games, an app store and new types of content are some of the rumors swirling. This could be what cracks the industry wide open.

The beauty of the Internet is that it enables niche interest areas to reach a critical mass that allows for meaningful interaction, content creation and revenue. TV and movies have to introduce product that appeals to the largest addressable markets possible to make the economics work. But while some niche that interests you may appeal to only five people in your city, on a global scale that interest group comprises hundreds of thousands or millions of like-minded folks. And a website or mobile app that caters to that niche has a very nice business opportunity, which is why we see such a multitude of apps and sites.

But what about TV? YouTube, Vimeo and others do a great job of housing all manner of niche content, but to watch it on my TV I have to stream it from my iPad or computer, or else use some janky television app. I want channels that offer exactly what interests me, not be at the whim of network producers or have to browse through thousands of inane videos. This is where a more open Apple TV could change the market.

Imagine if Apple released a robust SDK for content owners to create apps--each app essentially a "channel"--for the Apple TV, which are then available through an app store. (The current SDK is little more than guidelines.) Yes, Roku has private channels but they're generally low quality, not professionally produced and only quietly supported. While Roku could pursue this direct-to-app model, Apple has the reputation and power to make it successful. (Set aside for a moment that Apple desperately needs to fix discoverability in its app store.)

As an example, Motor Trend has a content creation team that is very sophisticated (although they seem to be slacking on the show frequency lately). You can watch their videos on their website or YouTube, but a Motor Trend app on Apple TV would take you directly to their expertly produced content in full HD glory. No AirPlay, no HDMI cables, no watching on a 5" screen. And for Motor Trend, no YouTube ads overlaying their videos, no revenue shares with Google, more control over the experience and less dilution of their brand.

Or what about sports leagues themselves? MotoGP sells a season-long video pass for all the practices, qualifying sessions and races, which is a blessing for anyone into motorcycle racing. But you have to watch on your computer or tablet, or connect said device to your TV. A MotoGP app on AppleTV is a race fan's dream and it keeps MotoGP closer to their customer base than via cable and satellite networks.

You don't have cable? You'd like to give us money directly for a sub? Tough cookies.

You don't have cable? You'd like to give us money directly for a sub? Tough cookies.

Does this work immediately for all content creators? Of course not. HBO already has HBO Go on Apple TV and in mobile app stores, which is limited to subscribers to HBO via cable or satellite providers. And it will be a long time before the NFL gives up its $4 billion a year TV revenue.

But the ease of directly accessing HBO's content via their app on Apple TV points the way to the future of television. A future that gives the viewer more options and the content creator more opportunity. A future of using whatever piece of glass you want to watch a show or movie, not what's dictated by the cable company. A future of direct relationships between the creators and consumers of content. A future with a simple user interface, a connection to the cloud. A future where the current video distribution model is well and truly cracked.