Here's How Apple Could Make A Great TV AND Screw The Cable Companies
by Matt Rosoff on Feb 8, 2012, 12:57 PM
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 Apple wants to revolutionize TV like it did mobile phones. But like mobile phones before the iPhone was introduced, somebody else's business is standing in the way. In the case of phones, it was the carriers, who wanted to control as much of the user experience as possible so they could sell extra services, like text messaging, music downloads, or video. Apple was able to get around this by creating an amazing product that was a generation ahead of every other phone, then giving AT&T an exclusive. In return, AT&T agreed not to install its own software on top and let Apple control all downloads. It worked out great for both parties — Apple made the right decisions about user experience, which made the iPhone the most desirable phone in the world, and AT&T got a lot of customers who might otherwise have gone elsewhere. With TV, the cable companies are in the same place as the cell carriers were in 2006. They want you to buy their add-on services. They want you to use their (mostly awful) on-screen TV guides so you'll see their on-demand offerings and advertisements. They want to bundle a bunch of channels you don't want with the channels you do want so they can justify the steep price differences between tiers. As MG Siegler wrote yesterday, Apple has a couple obvious choices here. It could strike an exclusive with one cable company — the iPhone strategy. But the problem there is that cable providers are split by geography, while phone carriers are not. Or, it could take the approach it took with the iPad and sign deals with all the major U.S. cable providers at once. But in either case, it would have to convince the cable companies to give Apple control over certain parts of the user experience like the TV guide and remote control. Otherwise, the famous Apple simplicity will be missing, and these (presumably) expensive and beautiful TVs will meet the same fate as every other effort to revolutionize TV over the last 30 years. And why would the cable companies agree to Apple's demands? What possible benefit would it get them — more customers? (Is anybody who doesn't pay for cable today going to drop $1,500 on a new TV? Doubtful.) But there's actually a third way. First, design a great, small digital antenna and build it into every TV box. Remember: beginning in 2009, every single TV station in the U.S. was required to send all its signals over the air in digital format. You might remember from the early 2000s that digital TV antenas used to be big and bulky, and you had to have line-of-sight connectivity to a TV tower. That's changed — there are now indoor amplified models — but most of them still aren't very good. But if any company can revolutionize this technology, Apple can do it. Just look at how clunky the touch screen experience was (stylus? ha!) before the first iPhone. Think this is totally crazy? It's actually very similar to the idea of making the iPhone use voice-over-IP and Wi-Fi to bypass phone carriers — an idea that Apple seriously considered before finally caving to AT&T to get the phone out fast. So that takes care of the networks and local stations. Then, sign content deals for the cable stations and -- more important -- shows that most cable viewers actually want, and deliver those stations over the Internet through a home Wi-Fi network. ESPN, HBO, Disney, Nickolodeon. Whatever. Apple would have to pay a lot of money for these deals, but it's got $100 billion in cash, and this is a heck of a lot better opportunity than paying a dividend. Just think of it: A TV that lets you get the content you want — and none of the crummy shopping channels that the cable companies bundle with the stuff you really want — without paying a dime to Comcast, Time-Warner, or any other cable company. That would be thinking different. Please follow SAI on Twitter and Facebook.
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