Apple execs not enthusiastic about 'unattractive' online print market
While rumors have suggested Apple is courting print publications to deliver content on its anticipated tablet device, company executives recently said they see problems with the current business model.
Analyst Mike Abramsky took part in a client event this week hosted by RBC Capital Markets. He spoke with numerous Apple executives: Peter Oppenheimer, chief financial officer; Eddy Cue, vice president of iTunes and Internet Services; and David Moody, vice president of Worldwide Mac Marketing. The three gave some insight into Apple's current direction, and their thoughts on the company's current status in the market.
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
A report earlier this week said that some publishers were not enthusiastic about the Amazon Kindle, because the hardware maker reportedly wanted to keep 70 percent of revenue from content sold on the device. That same report suggested that Apple would take a different direction and employ its current App Store business model, where it keeps only 30 percent of sales.
Apple in the past has been known to mislead just before a new product arrives. The company suggested it had no interest in the complex phone business model just before it debuted the iPhone, and it also said it could not create a sub-$1,000 Mac before the $400 Mac mini was unveiled.
Recent reports have stated that Apple has been courting print publications to make their content available on its forthcoming tablet. The 10-inch, 3G connected touchscreen device is expected to debut in the first quarter of 2010.
While officials said this week that while the Apple TV is still a "hobby," they believe it is well-positioned to benefit as people migrate to the Web for their video-watching needs. The Cupertino, Calif., company indicated it is looking to do for video what it did for music.
"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.
Apple on Thursday debuted the Apple TV 3.0 software update. It features a redesigned main menu that makes navigating content easier, and also allows users to view iTunes Extras and iTunes LP content on their TV.
Company officials are also reportedly unfazed by the recent launch of Windows 7. They see Microsoft's operating system upgrade as an opportunity for them to create Mac buying opportunities, for users who do not want to go through the Windows 7 upgrade process. Executives said they see plenty of opportunities for the Mac market share to grow, despite the lack of a sub-$1,000 laptop.
RBC Capital Markets has reiterated its $275 price target for AAPL stock.
Analyst Mike Abramsky took part in a client event this week hosted by RBC Capital Markets. He spoke with numerous Apple executives: Peter Oppenheimer, chief financial officer; Eddy Cue, vice president of iTunes and Internet Services; and David Moody, vice president of Worldwide Mac Marketing. The three gave some insight into Apple's current direction, and their thoughts on the company's current status in the market.
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
A report earlier this week said that some publishers were not enthusiastic about the Amazon Kindle, because the hardware maker reportedly wanted to keep 70 percent of revenue from content sold on the device. That same report suggested that Apple would take a different direction and employ its current App Store business model, where it keeps only 30 percent of sales.
Apple in the past has been known to mislead just before a new product arrives. The company suggested it had no interest in the complex phone business model just before it debuted the iPhone, and it also said it could not create a sub-$1,000 Mac before the $400 Mac mini was unveiled.
Recent reports have stated that Apple has been courting print publications to make their content available on its forthcoming tablet. The 10-inch, 3G connected touchscreen device is expected to debut in the first quarter of 2010.
While officials said this week that while the Apple TV is still a "hobby," they believe it is well-positioned to benefit as people migrate to the Web for their video-watching needs. The Cupertino, Calif., company indicated it is looking to do for video what it did for music.
"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.
Apple on Thursday debuted the Apple TV 3.0 software update. It features a redesigned main menu that makes navigating content easier, and also allows users to view iTunes Extras and iTunes LP content on their TV.
Company officials are also reportedly unfazed by the recent launch of Windows 7. They see Microsoft's operating system upgrade as an opportunity for them to create Mac buying opportunities, for users who do not want to go through the Windows 7 upgrade process. Executives said they see plenty of opportunities for the Mac market share to grow, despite the lack of a sub-$1,000 laptop.
RBC Capital Markets has reiterated its $275 price target for AAPL stock.
Comments
iTunes distribution of pre-recorded content may be an acceptable model for some aspects of TV viewing, but a big purpose of a DVR is to time shift live broadcasts, for which Apple currently has no good answer.
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
While Apple may not have been the first to release a news source, e-book reader, e-zine, e-newspaper & video capable tablet / slate type device to put side by side with the Kindle or Nook, when Apple does, the industry will then have a device with "panache" for the other companies to create their "Apple Killer" product!
Apple TV will continue to be stuck in 'hobby' status until they add a DVR. Apple showed a great concept for a DVR in a patent application some time back - where is it already??
iTunes distribution of pre-recorded content may be an acceptable model for some aspects of TV viewing, but a big purpose of a DVR is to time shift live broadcasts, for which Apple currently has no good answer.
While I agree that aTV doesn't serve the needs of live sports or news broadcast, I think DVR functionality is incompatible with the aTV mandate of pushing iTunes content.
In terms of purchased content I personally use aTV for movie rentals exclusively- and that's made it worthwhile for me. TV content won't be as attractive until it has either a rental price or subscription model. I'm less inclined to re-watch a TV show even more than a movie- so "purchasing" TV shows makes no sense for me. I'm sure this functionality has been held back by rights issues with cable providers.
If this type of approach is applied to a new publishing effort centered around an Apple tablet, that would yet again serve to set yet another complacent industry on its ear and result in yet another flood of new business and activity under the broadening Apple umbrella.
If the competition doesn't already see this happening, they soon will, and their desperate hands already weary from all the wringing and white knuckles, will have no rest for the foreseeable future.
The MacBook is $999 :-)
Picture: iTunes LP, really the starting point, the model, for whats to come. Magazines and "News" Publications will be able to design interactive interfaces that add more depth to the same content. Getting a new digital issue of "Magazine X Y & Z" will somehow be interesing, juicy, and fun. Every new issue will contain tons of new page styles, media, graphics....lots and lots of stuff to touch. And the advertising, OH the advertising. Ads don't get into your brain ANY FASTER than seeing and touching them.
Why the Apple TV is subservient to, and reliant on, a computer running iTunes elsewhere on the network is beyond me. When they re-envision the Apple TV as a stand-alone home media server, to which all other devices sync, they'll be serious.
you do not need an iTunes-enabled computer to run an aTV. If you want to sync your existing video collection from your computer, that's one thing. However, you're more than capable of downloading and storing content directly to the device.
Your welcome to be unhappy about it. But YOUR shareholders will scream if your not on it.
That article seemed to ramble all over the place. Why wasn't Apple enthusiastic about the online print market?
The same reason that they want to do to video what they did for music:
People don't read books anymore. ( Present company excluded)
Just like everything Apple touches, the online print media magazine thingamajig will be re-invented with new interest being generated.
Picture: iTunes LP, really the starting point, the model, for whats to come. Magazines and "News" Publications will be able to design interactive interfaces that add more depth to the same content. Getting a new digital issue of "Magazine X Y & Z" will somehow be interesing, juicy, and fun. Every new issue will contain tons of new page styles, media, graphics....lots and lots of stuff to touch. And the advertising, OH the advertising. Ads don't get into your brain ANY FASTER than seeing and touching them.
I think we have a name for that idea: web pages.
PDFs can be interactive and contain flash, including video and audio. Not going to be very power efficient for portable devices.
Wasn't the same thing said about iTunes... And what place does it currently hold for music distribution?
Your welcome to be unhappy about it. But YOUR shareholders will scream if your not on it.
I think all the big shareholders will understand, the little ones that might be less likely to understand how complex these businesses can be, they can sell to people that do understand. I personally think all this is a misdirection anyway, Apple will get into it when they think the time is right.
Apple TV will continue to be stuck in 'hobby' status until they add a DVR. Apple showed a great concept for a DVR in a patent application some time back - where is it already??
iTunes distribution of pre-recorded content may be an acceptable model for some aspects of TV viewing, but a big purpose of a DVR is to time shift live broadcasts, for which Apple currently has no good answer.
Adding a DVR to AppleTV would be an even bigger "bag of hurt" than adding blu-ray to Macs. There are so many different sources for programming, there is no way to make a single device that would work for everyone. And for many people (ie, satellite subcribers), there is no way to make a 3rd party DVR of any kind.
Recording over-the-air signals is fairly straight forward, but how many people use antennas? You could also create a device that captures the unencrypted basic cable channels. But those channels seldom include HD channels, and the cable companies are encrypting more and more of those channels every day. There are CableCards that will allow you to tune into the encrypted channels, but there are multiple versions of CableCards and getting them working properly is tricky.
The 2.0 CableCards (aka True2Way) may finally clean up that mess, but it's still to early to tell. And you'll always be at the whim of the cable companies who have complete control over that standard. Also, the last draft of True2Way I looked at included a requirement that you allow the cable companies to install their software on your 3rd party box to enable the card. Think Apple would ever allow that? And even if they did, would YOU want that?
And this still leaves satellite subscribers out in the cold, and we haven't even begun to talk about how all that would work outside of the US. You'd also have no way of transferring your recorded TV to your computer or iPod for portable viewing. All-in-all, adding a DVR to Apple TV would be a god-awful mess.
The only thing that would elevate the AppleTV out of hobby status is getting more online content, primarily via iTunes (because Apple would hesitate to add too many options that compete with iTunes sales). Subscription or rental TV shows (which are cheaper than the current for-purchase prices) would be a good start. Expanding the currently pathetic HD movie library is also desperately needed.
And I still maintain that adding an optical drive (even if it's only DVD, not blu-ray) would make purchasing an AppleTV a much more attractive option. The future of the iTunes movie business is in movie rentals, not movie sales. So letting me play my currently owned DVDs would be a value added feature with minimal impact to iTunes Store business.
Wait, what was this thread about? Oh, yes, the online print market...
In this day and age if you find yourself in a situation where you 'need' an attorney, you are already 'screwed.'
"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.
The most serious constraint with video is the quality and fatness of the pipes - cable, wireless, satellite, etc. Unless these get to the next level, there will be no 'explosion' other than for the Youtube/Hulu variety.
RBC Capital Markets has reiterated its $275 price target for AAPL stock.
I am an Apple optimist, but this is serious nosebleed territory, given growth opportunities already perhaps baked into the current price.
While I agree that aTV doesn't serve the needs of live sports or news broadcast, I think DVR functionality is incompatible with the aTV mandate of pushing iTunes content.
In terms of purchased content I personally use aTV for movie rentals exclusively- and that's made it worthwhile for me. TV content won't be as attractive until it has either a rental price or subscription model. I'm less inclined to re-watch a TV show even more than a movie- so "purchasing" TV shows makes no sense for me. I'm sure this functionality has been held back by rights issues with cable providers.
I agree about DVR functionality but for different reasons. I use my Apple TV in lieu of a cable TV subscription because it's cheaper. I believe that for non-channel surfers who have a list of programs they frequent, multiple season passes ends up saving a lot of money over $1200/year to Comcast... I still maintain a $14/month limited basic subscription for local news and network programming.
The most serious constraint with video is the quality and fatness of the pipes - cable, wireless, satellite, etc. Unless these get to the next level, there will be no 'explosion' other than for the Youtube/Hulu variety.
Don't forget the HUGE online video segment that Apple has chosen to not support...
(Not that it isn't hinted at in many of the 'explicit' offerings already being sold in the iTMS.)
Very interesting article there Neil. To actually listen to the executives themselves instead of the various commentators and speculators.
I'm not sure I understand you're comment... After rereading this article several times I don't see anything in it that could pass for substance...
While rumors have suggested Apple is courting print publications to deliver content on its anticipated tablet device, company executives recently said they see problems with the current business model.
Okay "company executives recently said they see problems with the current business model" this is one item that could pass for news since I don't remember too many instances where Apple employees have been directly sourced to have made any comments WRT the publication industry.
Analyst Mike Abramsky took part in a client event this week hosted by RBC Capital Markets. He spoke with numerous Apple executives: Peter Oppenheimer, chief financial officer; Eddy Cue, vice president of iTunes and Internet Services; and David Moody, vice president of Worldwide Mac Marketing. The three gave some insight into Apple's current direction, and their thoughts on the company's current status in the market.
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
Okay this is just saying what was already said in the introduction...
A report earlier this week said that some publishers were not enthusiastic about the Amazon Kindle, because the hardware maker reportedly wanted to keep 70 percent of revenue from content sold on the device.
While this has no real Apple related information a link to said report might have been helpful.
That same report suggested that Apple would take a different direction and employ its current App Store business model, where it keeps only 30 percent of sales.
Now this has some information that is related to Apple however this did not come from the Apple representatives interviewed but the mysterious report mentioned above.
Apple in the past has been known to mislead just before a new product arrives. The company suggested it had no interest in the complex phone business model just before it debuted the iPhone, and it also said it could not create a sub-$1,000 Mac before the $400 Mac mini was unveiled.
Where did this come from? Did I miss the part where one or all of the three Apple executives flat out denied the existence of a tablet that would act as an ebook reader?
Recent reports have stated that Apple has been courting print publications to make their content available on its forthcoming tablet. The 10-inch, 3G connected touchscreen device is expected to debut in the first quarter of 2010.
Old news randomly thrown in but okay...
While officials said this week that while the Apple TV is still a "hobby," they believe it is well-positioned to benefit as people migrate to the Web for their video-watching needs. The Cupertino, Calif., company indicated it is looking to do for video what it did for music.
Wait... was this intended to be included in a different story?!?! I though we were talking about the ebook oriented tablet and print media but somehow we've jumped the tracks and landed on AppleTV speculation.
"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.
Apple on Thursday debuted the Apple TV 3.0 software update. It features a redesigned main menu that makes navigating content easier, and also allows users to view iTunes Extras and iTunes LP content on their TV.
We're still on the AppleTV train-tracks, which is fine except it has nothing to do with the subject of this story.
Company officials are also reportedly unfazed by the recent launch of Windows 7. They see Microsoft's operating system upgrade as an opportunity for them to create Mac buying opportunities, for users who do not want to go through the Windows 7 upgrade process. Executives said they see plenty of opportunities for the Mac market share to grow, despite the lack of a sub-$1,000 laptop.
Windows 7?!?! Sub-grand laptops??! Now this is getting even stranger...
RBC Capital Markets has reiterated its $275 price target for AAPL stock.
[ View this article at AppleInsider.com ]
Ummm... what happened to the content of this story?!!? All we got that wasn't either old news or really random bit of Apple history thrown in was this:
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
However it's still not clear if someone at Apple said "unattractive industry structure" or some random analyst/reporter/man-on-the-street.
The rest was pure filler...