Steve Jobs isn't convinced new Apple TV will be a mainstream hit
Chief Executive Steve Jobs reportedly does not expect the forthcoming Apple TV refresh to be an instant overnight sensation like the iPad, because most consumers aren't ready to cancel their cable TV or stream content from iTunes.
Following up on his earlier report on Apple's alleged forthcoming Apple TV refresh on Sept. 7, Peter Burrows of Bloomberg revealed that the $99 device and 99 cent TV show rentals are not the "big video news" that the company hopes to get across. Instead, the focus will be that users can watch their favorite TV shows and movies on an iPad, iPhone and iPod touch. The new Apple TV, the report said, will be the "tail end" of Apple's video strategy.
"Even with the refresh, Jobs isn't convinced the new version will be a mainstream hit, says the person familiar with Apple's plans," Burrows wrote. "Most consumers aren't ready to cut the cord on their cable company, or put up with the tech-nastics required to stream content from the iTunes collection on their PC to their living room big-screen TV.
"In other words, it's a product that at best will delight some of the 'hobbyists' that have always been interested in the product."
He added: "My sense is that Apple doesn't want to overplay its hand, by making too much of this mobile TV opportunity. This isn't another 'revolution' in the making. Even if Apple wanted to try that, studios have all but nullified the possibility by refusing to let Apple sell subscriptions to your favorite shows, to be watched whenever and as many times as you like."
The report, and Jobs' alleged approach, is consistent with what the Apple co-founder said in June. In an interview at the All things D Conference, Jobs said Apple TV remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or for $10 per month.
"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they're willing to pay for it. And right now there's no way to do that."
But with a rumored $99 price and access to the App Store, the new Apple TV could also be a great value for consumers who want to do things other than rent TV shows and movies. Numerous reports have stated the device will run the iOS operating system, and one rumor has suggested it could access games and applications currently available in the App Store for the iPhone and iPad. Such an inclusion could represent Apple's entrance into the set top box gaming market.
Following up on his earlier report on Apple's alleged forthcoming Apple TV refresh on Sept. 7, Peter Burrows of Bloomberg revealed that the $99 device and 99 cent TV show rentals are not the "big video news" that the company hopes to get across. Instead, the focus will be that users can watch their favorite TV shows and movies on an iPad, iPhone and iPod touch. The new Apple TV, the report said, will be the "tail end" of Apple's video strategy.
"Even with the refresh, Jobs isn't convinced the new version will be a mainstream hit, says the person familiar with Apple's plans," Burrows wrote. "Most consumers aren't ready to cut the cord on their cable company, or put up with the tech-nastics required to stream content from the iTunes collection on their PC to their living room big-screen TV.
"In other words, it's a product that at best will delight some of the 'hobbyists' that have always been interested in the product."
He added: "My sense is that Apple doesn't want to overplay its hand, by making too much of this mobile TV opportunity. This isn't another 'revolution' in the making. Even if Apple wanted to try that, studios have all but nullified the possibility by refusing to let Apple sell subscriptions to your favorite shows, to be watched whenever and as many times as you like."
The report, and Jobs' alleged approach, is consistent with what the Apple co-founder said in June. In an interview at the All things D Conference, Jobs said Apple TV remains a hobby because it's hard to break in to a market where consumers are used to receiving a cable box for free or for $10 per month.
"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they're willing to pay for it. And right now there's no way to do that."
But with a rumored $99 price and access to the App Store, the new Apple TV could also be a great value for consumers who want to do things other than rent TV shows and movies. Numerous reports have stated the device will run the iOS operating system, and one rumor has suggested it could access games and applications currently available in the App Store for the iPhone and iPad. Such an inclusion could represent Apple's entrance into the set top box gaming market.
Comments
"The only way that's ever going to change," Jobs said, "is if you can really go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they're willing to pay for it. And right now there's no way to do that."
It is clear that Jobs "gets it" even if he doesn't have the leverage to fix it.
So, no revolution. Too bad. Maybe incremental change will still allow for improvement...
Make a $99 tiny set top box with wifi, Bluetooth, 16gb NAND, iOS + apps, USB for HDDs and iDevices and 720p or higher with $0.99 movie rentals..
and I can guarantee this will be an overnight success
EDIT: support for MacBook air SuperDrive over USB would be nice too.
It is clear that Jobs "gets it" even if he doesn't have the leverage to fix it.
So, no revolution. Too bad. Maybe incremental change will still allow for improvement...
This article and your post goes along with what I?ve been saying, Apple can?t just let the living room go. They need to least have a place holder.
Dear Mr jobs,
Make a $99 tiny set top box with wifi, Bluetooth, 16gb NAND, iOS + apps, USB for HDDs and iDevices and 720p or higher with $0.99 movie rentals..
and I can guarantee this will be an overnight success
EDIT: support for MacBook air SuperDrive over USB would be nice too.
It?s easy to have a successful product when you sell it at a loss.
"Most consumers aren't ready to cut the cord on their cable company, or put up with the tech-nastics required to stream content from the iTunes collection on their PC to their living room big-screen TV.
I don't care where the shows come from but if they are going to come from the internet, where is the the bandwidth coming from? Oh right, from the cable company. Sort of a Catch 22 there, no?
SJ has it right. Gotta break down the subsidized set-top box model. Get the studios on board with subscription plans. And do something about local sports. Then, it's bye-bye cable. Unfortunately for people (like me) in cities like Philadelphia, Comcast owns the Phillies, Sixers, and Flyers, and the TV networks which air most of their games. That's a tough nut to crack.
Agreed. In this case, it isn't a technological problem, or evan a business problem - it's a legal issue. Remember all those copyright notices you see during games? "This broadcast is the property of the National Football League"? It is that way because of a contract, and likely a pretty lengthy one to boot. If the owner of the "game" has given an exclusive contract for broadcast, iTV is sort of out of luck. But how many have? And how many will wish to go with another distribution method once this (and other similar systems) hit the consumer? And we do have some coming "games" to be played in London shortly. How interested will the IOC be in this? IIRC, the world cup soccer thing was real popular on non-traditional distribution (non-network TV).
If the rumors are correct, the new iTV is the proverbial elephant's nose under the tent flap.
Want.
It?s easy to have a successful product when you sell it at a loss.
Actualy, apple is in a good position with $40bn to sell the box at a loss and still make money off $0.99 TV/movies
Dear Mr jobs,
Make a $99 tiny set top box with wifi, Bluetooth, 16gb NAND, iOS + apps, USB for HDDs and iDevices and 720p or higher with $0.99 movie rentals..
and I can guarantee this will be an overnight success
EDIT: support for MacBook air SuperDrive over USB would be nice too.
No it won't because its not about the price of the hardware its about gaining control of the content which he can't do. Its all about gaining control or having agreements with shows that are running NOW. Now with services like epixhd where you can get ondemand and also stream from your computer at any time for 10.00 a month this just isn't going to happen for Apple on any large scale.
Actualy, apple is in a good position with $40bn to sell the box at a loss and still make money off $0.99 TV/movies
I don’t think having money in the bank is a good excuse to start losing money on a product.
Now, I can see Apple wanting to get a foothold in the living room by selling a cheap TV at lower net profit margin than their other products because they can’t command their typical margins in this “hobby” area. If they also plan to sell this as an entry TV and/or for your additional TVs (as I’ve mentioned previously) then it would make sense, but it would still behoove them to make a profit on the HW as renting TV shows is not a guarantee, unlike other loss leader HW that comes with a contract.
SJ has it right. Gotta break down the subsidized set-top box model. Get the studios on board with subscription plans. And do something about local sports. Then, it's bye-bye cable. Unfortunately for people (like me) in cities like Philadelphia, Comcast owns the Phillies, Sixers, and Flyers, and the TV networks which air most of their games. That's a tough nut to crack.
Same here in NY with Cablevision owning the Knicks and Rangers and MSG. Cable companies are buying up all the content. The subscription service would have been huge.
There may be a chance with dedicated apps. As it is now many cable subscribers are hooked into their triple play packages.
I don?t think having money in the bank is a good excuse to start losing money on a product.
The more iOS devices there are "out there" the more money apple and developers can make off of apps, content, and iAds
It?s easy to have a successful product when you sell it at a loss.
I don't think its even that. This really isn't about hardware specs its about Apple being able to have agreements for current content. Which is going to be next to impossible for them with the cable and dish companies.
If all Apple can offer is streaming movies that you can already get ondemand or with epixhd they really have nothing major to offer and Jobs knows it. Most people don't want to watch season 1 of a series after its over, they want to watch it as its happening.
Most people don't want to watch season 1 of a series after its over, they want to watch it as its happening.
TV shows are available on iTunes 24 hours after they first air.
I don't think its even that. This really isn't about hardware specs its about Apple being able to have agreements for current content. Which is going to be next to impossible for them with the cable and dish companies.
If all Apple can offer is streaming movies that you can already get ondemand or with epixhd they really have nothing major to offer and Jobs knows it. Most people don't want to watch season 1 of a series after its over, they want to watch it as its happening.
I agree. I stated in a thread yesterday on this site (I think) some of pitfalls networks may have to overcome when negotiating with Apple. I don’t think the pricing with Apple is the real issue, it’s the long term profits if they burn bridges with other distributors and ad companies. This is a very complex issue for all parties as the inevitable paradigm shift could destroy some key players.
They currently offer TV shows the next day, ad free. It would be great if they could offer that for rental with ads, but with the local ads being a part of most networks I doubt it.
This article and your post goes along with what I?ve been saying, Apple can?t just let the living room go. They need to least have a place holder.
I totally agree that they need to be in there in some form, but I'd like to see them trying something a little more bold than a place holder. They do after all have the money to be able to deal with a flop, should they take a big gamble and have it go wrong.
I'm wondering why they don't look to partner with one of the content providers and effectively make the set-top box for them. Dish Network would seem to be a useful company to work with, since they have relatively low market share, I would have thought that given the right deal, partnering with Apple to provide the system would draw users to their service. I would certainly consider switching away from Comcast to a service that has a well done Apple interface.
In some respects it would be like the exclusive AT&T deal with the iPhone. I know a lot of people hate AT&T, but going with just one company has allowed AT&T to gain subscribers so is a benefit to them, and allowed Apple to start changing the way the network operators functioned, which has become a benefit to Apple.
TV shows are available on iTunes 24 hours after they first air.
And at 99 cents an episode there is no way for the average family that is going to be cheaper then Cable or Dish. Also unless they plan on changing pricinng for all shows many are 1.99 an episode. You know for exciting stuff like Jersey Shore.
Actualy, apple is in a good position with $40bn to sell the box at a loss and still make money off $0.99 TV/movies
While observing Apple for 32 years, I have never seen them offer any product at a loss... just not in their DNA.
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Now THAT would make people give up their cable!