Jobs: Apple TV a hobby because there's no market

What an odd interview.

The enhanced television experience should be financed the same way as original television, with advertising.

My idea is to set up a network of internet-connected PCs with output to the TV screen. Plug the box between the TV and the video source (satellite, cable, or free over-the-air) and the computer provides free DVR service, social networking, web content, and the ability to fast forward through commercials.

The system could be easily financed by directed advertising by adding a few commercials to recorded or "live" programs. The extra commercials would be unobtrusive, and directed to the location, tastes, and interests of the viewer. Smart marketing would make these commercials the best on TV, and probably desired, recorded, and replayed by viewers.

If interested, see the published patent claims at:
Home computers subsidized with targeted television advertising.
COMPUTER-COST SUBSIDIZING METHOD United States Patent Application 20100058378
See it at: http://www.freepatentsonline.com/y2010/0058378.html

Marc Allan Feldman

I think this is why Sky does so well in the UK. The are nationwide and their set top box has a good consistent UI as well as lots of features. Shame they are overpriced

Hang on... isn't Google TV built into the TV in some cases?

Lets say, hypothetically, that Google TV gets built into every single new TV. I have to wonder if Jobs would have the same opinion.

Your idea already has a fundamental flaw unless the commercial skipping is offered as a premium service which the user pays for but then we're back to the beginning again...

I would say this makes it official. No new iPhone sized AppleTV announced at WWDC.

They're just not trying hard enough. There's plenty of room out there for new TV related products.

Proofread much?

Why are they talking about set-top boxes? Every TV manufacturer is already integrating all that stuff into their TV's. If Apple wants a TV hobby, they should consider building an Apple TV, which is an actual TV, not a set top box.

Wow, that's some message to potential Apple TV buyers to not bother!

A very insightful, if slightly depressing, assessment of the industry.


Yes, kind of. As extra add ons. But not in a big way - so Apple gets to keep going but as a "hobby".


Not at all. That could easily be a continuation of the hobby. (but the rumour said not at WWDC)


There are lots of technologically interesting possibilities. The problem is the industry players, and how to keep the money flowing. I think there are some ways to do this but they take too big a leap in thinking for the networks etc to risk it - instead they try to lock down what they have.

I wonder if a combination of carrot and stick would work better than what's been going on.

For example - what if Apple makes a really brilliant PVR. I'm talking about something that (probably with human involvement) hits precisely the beginning and end of a show. Perhaps it even skips the commercials really easily. It has a mass of hard disk space and records a lot of the FTA content to provide a large quantity of shows on demand. It never even shows a TV guide - just a menu of content to choose from (you probably wouldn't even know what day or channel it's on). Perhaps they could add a DVD burner option (from iTunes) to convert your movies. Naturally it'd have links to other iTunes offerings etc like the current AppleTV has.

That's the threat. The networks would hate it. I won't bother adding avi/mkv playback.

Then to give networks some good options.
Your local channel makes a small amount (30c(?) via advertising) from each viewer watching their show - so first choice is to either
a) do nothing - and Apple users will skip their ads as per above, similar but better than TiVo - or
b) offer all their content in a more forward thinking manner

Forward thinking means giving users choice.
- Pay the SAME amount they would have gotten through advertising and we can skip all the ads automatically.
- or use highly targeted ads which are better value for advertisers, so we only see 1/4 as many ads
- or watch all the regular ads but you can fast forward them (30x) (The networks prefer this greatly to skipping them altogether!)

The downside for us is that if the network makes a deal, we actually stop getting ad-free cost free programs. The upside is our favourite shows still make enough money to continue - we choose the method of their earnings - and we get access to every episode that was ever in the series. Plus access to shows no longer on the channel and on the networks' cable channels.

The idea is greater choice for users, and continued equivalent earnings for the show makers.

edit: I forgot to mention DVDs.
Convert a users' DVDs easily if there's no deal to get that movie some other way. One useful deal might be a HD upgrade to your DVD - pay the cost of the HD rental for your movie and you get to own the HD copy. (To avoid upgrading rentals, randomly force the user to re-insert their DVD after 3-4months, and remove the HD version if they can't). Working again at a win-win - the studios make money on a sale/upgrade and the user gets HD versions.

You never know for sure with SJ. Look how he ridiculed small screens shortly before releasing one. What were his words? "Who's want to watch a movie on a small screen?"
He could be throwing others off the scent.

The title of this article implies that Steve Jobs said "there is no viable market" and that is not what he said. The fact that you explained things in the article does not justify you guys titling articles incorrectly to lure people in and then tell them something else.

Steve also made mention that we don't want to become a blogger nation, and I couldn't agree more. Especially in the tech industry, the quality of blog sites and their tactics are pretty bad.

Writers for blogging sites bang sh*t out and don't care about the content, proofing it, much less making it informative on a consistent basis, they'll give them controversial titles that make you go "What?" to serve as it's click-bait, and hope that a raging discussion happens to increase pageviews. It's pathetic.

Mark Hernandez
Information Workshop

Free commercial fast-forward is not a flaw, but a fundamental strength. Studies have shown that people with DVRs only skip commercials 50% of the time, and that is with undirected advertising. The Openivo system would lead to commercials that most people will want to see. This would be a new kind of television advertising.

For example, a local family-owned pizza place could go online and for $20, produce and buy a commercial for a new topping or style of pizza that would only go to their local delivery area. The network will first send the commercial to a small subset of viewers. If most of the sample viewers skip the commercial, it would go back to the business owner for revising. If most of the sample seems to watch the commercial and like it, then it goes out to the whole group of viewers. That way most of the commercials that viewers see would automatically be test marketed as something viewers *want* to see. If 50,000 local business buy a spot for there local area, that would be $1,000,000 in revenue.

What is so 'odd' about the interview?

I thought his arguments here were brilliantly articulated, and spot on.

Perhaps you can explain?

Uhhh, that's because it's not a TV or Set-top box replacement; it never was. It's a DVD Player replacement. It's (at this moment) purely and simply about serving your iTunes media to your TV; that and nothing else. The "TV" in Apple TV is to do with connecting to a TV, not anything to with monitoring or storing programming from the traditional TV or Cable TV medium. Firmware or OS updates can change that in an instant.

And that's why Apple still class it as a hobby. When they shake up the TV industry like they have with the music, movie and phone industries, I am sure we will be the among the first to know. I bet they do have ideas. Furthermore, I bet those who have the current incarnation of Apple TV won't be disappointed, because whatever the shake-up is, they will be able to make use of it with their early Apple TVs.

If you like renting iTunes Movies for your large TV, if you like YouTube in your living room, if you like displaying photo albums of your grandkids with your own music in the background, if you don't like running out to the video store and running back to return movies, if you have lots of media in iTunes (and you can do a simple rip of your physical DVDs, then Apple TV is still a great product. Anyone expecting more may well be disappointed. Those who know what it does and use it for that really enjoy it.

This is a very good point. This is why Openivo would develop a system under the control of the viewer, not the advertiser, the network, or the cable provider. Make an end run around all the big players. Make a system that works with all satellite, cable, or free over-the-air signals. Let the viewer choose.

Set-top access is very valuable. Knowing what viewers are interested in, test marketing ads, and access for directed advertising are veins of gold. Instead of that value going to a network or a cable operator, why not use that value for the viewer. For a free computer-DVR, free broadband internet connection, and maybe free premium content.

Most viewers would be willing to give up a little bit of privacy, for a lot of free stuff.

Well, odd as in:

With Job's it's best to read between the lines. It's my guess that Apple are up to something here.
Steve was strangely open. Thats not steve.


and the line ""I'm sure smarter people than us will figure this out," hmm whatever...

may as well be saying.. "you idiots go waste your time solving this 'problem' that I have misdirected you towards, whilst we come at this from an entirely different angle taking you all by surprise mwahahaha"

I don't see Apple EVER offering a TV. Too much of the cost of a TV is something that Apple can't add value to. The biggest part of a TV is simply watching programming and competitors can buy the same screens that Apple can.

The only advantage Apple could have is in things like on-screen menus and switching between devices where their UI might be of value. But most people spend so little time there that it isn't worth a premium price.

The only possibility I could see would be if Apple would license iPhoneOS for products that Apple doesn't want to make - cable boxes, TVs, etc. It wouldn't interfere with Apple's business but would add one more layer to the Apple iTunes/iPhone/iPad/iPod ecosystem. But even there, I doubt if the value is great enough to justify the risk of brand dilution.

does this mean google will cancel their google tv plan?

That's exactly what SJ said, actually. His entire answer related to market forces. What were you watching?


Thanks, professor. They're not "trying hard enough?" Steve explained it very clearly. They can make a fantastic machine. The problem is getting it into the hands of users. The cable companies use different standards, and market their own boxes. They like to charge lots of money for additional features. I have 3 FiOS boxes in my home, for example. I pay $40 a month for those with Home Media DVR. It certainly doesn't cost Verizon $40 a month to let me have those boxes. They're not going to give up the money for nothing. The same is true of Comcast, TimeWarner and the other major players.

So where does that leave Apple? With AppleTV as it currently stands. If they add more functionality, the price goes up. As a consumer, it's a tough sell. Apple's product would have to replicate my current functionality. It would have to replace my multi-room DVR, tuner, DVD and Blu-ray players, etc.

Hobby? Good! It is supposed to be hobby as watching TV. Now if it is hobby for Apple... let me go XBMC/Boxee on some of ION nettops. After all hobby is hobby and some of us need to navigate media content while sitting at TV regardless where it is (local, commercial, internet... you name it).

They are running around screaming "OMG we thought Apple were going into this big time ... what have we done?"

I bet they are

Great response.

I never did really understand what the the Apple TV did in it's entirety. I wonder if there are tens of thousands like me? Perhaps the unit is mis-named? 'iTunes TV' might be more apt if all it does is serve up iTunes content via the TV screen.

It's "not a viable market" because Jobs hasn't figured out how to make money from it yet. But Google has. They'll give their OS out to every box, tv and tv accessory maker. All those subsidized boxes from your cable provider? They'll all be running Google TV in 2 years.

Unfortunately for Jobs, the only way to make money on this front is to work with existing service providers (the cable cos.) - that means letting in cable/satellite TV on the box and selling Apple TV through the service providers (maybe for "free" like they do now, with other boxes). But Jobs can't stomach this model, so he says it's "not a viable market."

If he keeps up that attitude, Google will eat his lunch here. He has the potential for another iPhone here....if only he can get past his dislike of working with the cable cos.

Who cares about Cable?! 4G is where the future is at, perhaps Apple are waiting it out.

You will, when you realize that the HD content you want regularly makes you bust your bandwith cap and rack up huge overages.

I agree. Much too forthcoming from Jobs. If what he is saying is true, then he is basically telling the customer "Hey we are not going to invest in this and may kill it soon. So don't bother buying one." No, I think you are right. Something is up.


Exactly.


can't add value to? Are you kidding? I am sure there were many execs who said the same about Apple and the cell phone.

"The biggest part of a TV is simply watching programming and competitors can buy the same screens that Apple can" -

You are missing the point. That is the precise reason there is potential. The TV can be more than just a I.V. drip of dumb reality shows. Apple could reduce the amount of devices in your entertainment centre and improve the whole UI experience and even the purpose for turning the TV on. A Wifi TV with the Internet, On Demand, Music, your home medial content and traditional Network/cable content all merged into one Apple UI experience, would be awesome.

Just think, no additional remotes. No changing inputs. No crazy wiring set up: This cable going to HDMI 1 and Component 2 and RCA input to Auxiliary to Tape Mon out to Front left speakers to … oh sh#t why won't the sound work when I switch to DVD? We have all been there behind the cabinet trying to play electrical engineer.

Apple signed a 5 year deal with LG a ways back. I would not be surprised if Apple does go into the TV business next.

Yes it is. And here is one of the few places where Apple's business model fails. A digital movie device needs to be either a combo device with a DVD or Blu-Ray or it needs to exist as a reference platform to be included in other manufacturers devices. Apple wants to prove the optical disk movie is dead (when it isn't) and doesn't work with partners. I don't think Apple's current mindset is capable is making a device like this succeed. You also have the other white elephants in that there is no industry standard movie file and no import/export rights for your movies. Both played very important roles in the quick adoption of digital music.

Apple could also help the digital movie cause by acquiring elgato and including a TV tuner in the iMac. Add in some even larger screens, a full featured universal remote, and an optional blu-ray drive and Apple's already sitting on the living room device its been looking for. Apple just doesn't know it yet.

And the revenue for Google comes from gathering as much "personal" information as they are allowed to in order to deliver targeted advertising (which as I understand it is holy-grail territory for advertisers)... correct?

So the next question. Why can't Apple do something similar?

agreed...

Not necessarily.

Jobs said that no one wants to buy another box and that the solution was to "... 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. .."

This could easily be a description of the new Apple TV. If it streams, it's hardly a box at all, if it also stored everything in the cloud it would be a sort of super-Tivo/Netflix which is the only thing Apple TV is really missing right now other than content agreements.

Lets say...it won't;-)

It used to be that way, but not anymore. I am currently "forced" to use a Samsung TV with a network connection and Synology DLNA box to have a fully integrated home entertainment experience (internet, music, photo's, video, apps, on demand, cable, etc.), using just 1 remote and 1 device in front of me.
If Apple wants to compete with that, they'll have to come up with a TV which integrates it all, including iTunes and iPhoto access, because I won't be bothering with set-top boxes or other separate devices next to my TV anymore.

He said,

He would have the same opinion. He said expensive set top boxes were the problem. Eliminating them would eliminate the problem. I'd wait and see what Google can get their platform integrated into before running around screaming how successful Google TV will be.

Steve Jobs statement could also be taken as Apple will be producing a TV with integrated Apple TV soon. The rumored $99 Apple TV would also match his sentiment here (it wouldn't be an expensive set top box). Or of course they could do nothing and wait and see if anyone else's ideas stick. Googles approach doesn't fit Apple, as they are a hardware company, they don't licence out their operating systems.

I think you're deluded if you think Apple can replace or significantly impact the home theater market. Sony, Pioneer, Onkyo, Denon, etc., etc. all have a wide variety of products at different feature and price points. And they compete very heavily on features and releasing new products to take advantage of new standards (HDMI 1.1, 1.2, 1.3, etc.). Apple MIGHT be able to release a Bose competitor - a nice all-in-one for the masses. Who knows, maybe they could pull another iPhone and shake up the industry players by redefining the home theater user experience and raising the bar significantly in that area, but I doubt it. Perhaps Light Peak can simplify the connection spaghetti, which would be pretty spiffy. But again, I won't hold my breath.

As for Google OS on TVs and set-top boxes. See the current situation with Android. Handset manufacturers don't keep the OS updated, and the carriers would rather sell a new phone with a 2 year contract than update the OS on a year old handset. Perhaps the set-top box market is different and the longer the cable co. can keep the same box in your home the more $$$ they make off of it so keeping the software up to date and feature rich is in their interest.

What I heard Steve say in the video is that there are far too many different standards in use to create a "universal" device that could even technically be adopted by enough cable, satellite, & OTA companies to be worthwhile, plus competing with the subsidized boxes from the content providers. Now, a pure TCP/IP box... Hmmm... I did not hear him talk about that play.

But again, if I have broadband to my home, it's most likely provided by a company that also provides TV and the cost of getting JUST Internet vs Internet & TV is minimal - the provider would rather sell you both vs either one. So, again, any pure IP based box is at a disadvantage.

Enough rambling.

- Jasen.

Most of the ideas here like yours express what you want but no viable way to make money or the logistics of pulling multiple, potential competitors together. It's easy to state what you want but very difficult to produce a viable business model. I want a motorcyclecar. Honda makes decent motorcycles and they're really fun on sunny days. In poor weather and heavy traffic I would prefer the safety of four wheels and an enclosed cabin. Honda also makes these. They just need to combine the two and they'd have a hit. Hard to believe they won't work this out, it's clearly a goldmine.