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Apple's New Vision for Apple TV 'Less Ambitious' Than Before
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I'm in MA and Verizon and Comcast are everywhere. The satellite companies don't have a huge presence. I know that the snow and ice can mess up the satellite reception. I think having one for ISP and land line and the other for cable would be more expensive, at least here.
But the cost of ESPN raises the cost for everyone regardless if they watch it or not. Its time for this model to die.
Exactly. But some seem to think if Steve was around he could work magic. Personally I think Steve's "cracked it" comment was around the UI not necessarily cutting the cord.
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I pay Mediacom around $80/mo and DirecTV (including sports and pay channels) $150/mo.
Apple buying Disney would not invalidate the distribution agreements that Disney already has in place (especially the big deal with Netflix) nor would it change the fundamental business model that TV distribution works on (advertisers paying for access to eyeballs). Now that Nielsen is finding ways to track and categorize streaming content that should help incentivize networks to stream content.
Prior to this streaming views didn't count towards ratings which meant they didn't count towards how much shows could charge for commercials. Kinda obvious they'd want people to watch their show on Channel X when their income is directly tied to how many people watch their show on Channel X.
That's too bad, I was truly hoping that Apple would work against the cable companies. I think it's long past time for them to disappear.
I don't mind paying a reasonable monthly fee for the channels that I want to watch. Perhaps even offer me a two level monthly fee, one for the channel with advertisements and one without.
I don't mind paying a reasonable monthly fee for the channels that I want to watch. Perhaps even offer me a two level monthly fee, one for the channel with advertisements and one without.
I have ripped DVDs, home movies, and all sorts of not-purchased-from Apple content in my iTunes server. Not sure what "cord" you think I'm attached to here. Just because iTunes doesn't support the MKV container (an easy problem to rectify with Handbrake or any number of other transcoders and/or re-wrappers). Who gives a **** about what the container is on your home library? Containers can be shifted in batch, no re-encoding needed. Why base your home electronics around a perceived lock-in to one container or another?
WebM? Yeah, a whole different encoder will cause problems, so if you are using WebM or WMV/s default encoding (I think WMV supports H.264 as well now, but didn't used to), etc, you have a real and not-imagined problem. Of course, switching to WebM garners a great big WTF sticker for you, but whatever. At least then you have a good argument for why your particular oddball library will not support iTunes.
The only argument for MKV support that makes a lick of sense comes from bit torrent file traders who routinely download a movie (public domain only, of course) in an MKV container and want to play it Right Now without shifting the content to a different container. If you have a"library" of titles you watch once then throw away, a container shift is a pain in the neck for no reward. If you actually have a library, though, the container shift is done once, in batch, and on future rips you just put it into the compatible container, then all works just fine.
An excellent summary of why a la carte from your cable provider will never work. I have some nits (bundling is always, in economic terms, hostile to the consumer and tends to protect untenable business models), but any gains from a la carte of channels or even a la carte of shows are small potatoes. But, you are missing the big picture.
The big picture is that we have multiple layers in play right now. This is a bit of a simplified view, leaving in only the most major layers:
* The content producers (writers, actors, director, etc)
* The content funders ("Producers" and "Studios")
* The content aggregators (networks)
* The network bundler and delivery mechanism (cable company)
* The "last foot" hardware (AppleTV, Roku, PC, etc)
Each layer believes it deserves a 10-50% share of the money going through it (no, that is not an exaggeration!)
You cut costs by eliminating layers, or making the expensive layers thinner. You eliminate layers by recognizing they are serving no real function (or no function in line with the profit they are creaming off the top).
The most obvious permutation is:
* The content producers (writers, actors, director, etc)
* The content funders ("Producers" and "Studios")
* The "last foot" hardware (AppleTV, Roku, PC, etc)
Cutting out the networks and cable company profits here is completely eliminating the two most expensive layers of the stack, and easily gets you below 25% of the original cost.
It is also highly unrealistic for either of those entities to imagine that is a good situation for them, so they will fight tooth and nail from allowing that to happen (example, by contractually blocking content producers from selling to both Apple and to them).
But, this gives you an idea of where the waste comes into the system, and how to remove it. It isn't by suggesting "don't subscribe to The Brunch and Crochet Network and ESPN 7". It is by asking "Who needs The Brunch and Crochet Network?"
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That is another important savings point. If I recall, sports funding is about 40% of the average cable bill. If you don't watch sports, or would be comfortable watching your sports in a group or bar setting, a la carte where ESPN et al are fairly priced is a huge savings. On the other hand, a la carte where ESPN et al are fairly price is hugely more expensive for the people who do feel the need to pay for ESPN.
Again, from an economics perspective, this bundling is the antithesis of a functioning market. It is hostile to the consumer, and keeps producers (ex, ESPN) from reacting to the actual demand curve of the population. In the short term the ESPN-afficionado would pay more; in the longer term ESPN's and major sports' profits would decline due to plummeting subscriber counts.
I'm with the others about the state of this in the UK.
On my 2nd gen Apple TV, I can't use about half the apps due to being in the UK.
Opening up for apps to allow BBC iPlayer, itv player, 4OD, demand five and Sky Go, and lovefilm, would be great! They're already on the iOS App Store so wouldn't be too much work technically, just they maybe would encounter licensing issues, that they'd have to sort out. Some of those apps don't current work using airplay so there must be some larger screen restriction the content makers are enforcing.
On my 2nd gen Apple TV, I can't use about half the apps due to being in the UK.
Opening up for apps to allow BBC iPlayer, itv player, 4OD, demand five and Sky Go, and lovefilm, would be great! They're already on the iOS App Store so wouldn't be too much work technically, just they maybe would encounter licensing issues, that they'd have to sort out. Some of those apps don't current work using airplay so there must be some larger screen restriction the content makers are enforcing.
As a side note, I have Directv and live in the Chicago area. Snow has been a rare problem, but does occasionally happen, maybe a couple times a year. What's interesting is that i just filled out a Directv customer research survey asking me if I would like to have the capability to stream content over the internet in those instances where sat signal was lost due to weather. Obviously I said yes.
For the most part these two are typically one in the same and for a couple of good reasons. One, as a cable/TV channel if you aren't creating your own content you will always be at the mercy of those that do. This is why Netflix, Amazon, Hulu, YouTube, etc., are all trying to create their own high quality, original programing. It separates them from the pack and gives people a reason to pick Service A over Service B even though both services generally offer the same content.
Two, making a TV show is expensive and risky (I think a one hour TV drama is in the $3-4 million dollars per episode range) which is why production companies partner with networks that will foot the bill. The networks will foot the bill because they'll make money selling ads and that ad revenue is directly tied to how many people watch that show on their channel. Though, as I mentioned before, Nielsen is modernizing it's rating system to account for streaming now too. In the case of ad-free cable channels, the ratings impact how much they can charge cable companies to carry their channel.
Put simply, the hurdle is that people want to watch Game of Thrones but they don't want to pay for cable + HBO even though the only reason HBO finances Game of Thrones is so people will pay for cable + HBO.
Cutting the cord doesn't save money....
Cutting the cord doesn't save you money unless you watch very little content. A la carte will just make the media companies charge more for individual content.
If you watch a tv show, currently it runs $2.99 or $3.99 per episode. That's 4 episodes per month for at least 3 months at a stretch if not 6. That's $11.96 to $15.96 per show per month. If you watch ONE show per day is $83.72 to $111.72!! Even with bulk season rental or purchase, you're easily paying more MUCH MORE than what cable costs. The Netflix, Hulu+ model of streaming for a flat fee is the ONLY model that is competitive with Cable/Satellite in terms of content offering. Media companies should want many streaming services in the trenches to compete with cable/sat and each other so they can lease or license the same content at no additional cost.
Cutting the cord doesn't save you money unless you watch very little content. A la carte will just make the media companies charge more for individual content.
If you watch a tv show, currently it runs $2.99 or $3.99 per episode. That's 4 episodes per month for at least 3 months at a stretch if not 6. That's $11.96 to $15.96 per show per month. If you watch ONE show per day is $83.72 to $111.72!! Even with bulk season rental or purchase, you're easily paying more MUCH MORE than what cable costs. The Netflix, Hulu+ model of streaming for a flat fee is the ONLY model that is competitive with Cable/Satellite in terms of content offering. Media companies should want many streaming services in the trenches to compete with cable/sat and each other so they can lease or license the same content at no additional cost.
You misunderstood my quote. The apples and oranges referenced someone trying to compare an ATV and an XBox. They're different machines altogether. Should never be in a comparison.
As for the point of the article being Apple wanting to get around cable, I thought I made my point clearly. Apple can't get around cable. There's no incentive for content providers to change how they operate. They make too much money right now.
My aunt and uncle do: DirectTV and TimeWarner internet. Personally I don't even bother with paid TV service anymore. If it's not available to streaming or antenna then it's not worth it.
The people I know usually only have it happen a few times each winter too, but once in a while it can go on for a few days unless you can get the dish cleared. But those with Direct TV still are paying two bills, one for TV and one for internet. Eliminate the content providers like Direct TV, etc, and the ISP is gong to raise it's rate to compensate for the additional traffic and in the case of Comcast and Verizon, they will raise rates due to lost revenue. I don't see Apple being in a strong position here at all, let alone one where they dictate the terms.
At this point, I'm fairly happy with Apple TV and my setup of Netflix, Hulu Plus, and the ability to AirPlay other things (shows that force me to watch in a web browser vs tablet app), plus my $20 antennae for OTA networks. I cut the cord to Dish nearly a year ago and have saved a ton of money. I have no unrealistic expectations that Apple will be able to overturn the cable/satellite power base.
I really don't see how things are going to change dramatically all at once. Maybe slowly over time as more people adopt high-speed Internet service and if those services are severely capped. I'm lucky enough that my local cable Internet provider has an extremely high cap compared to my usage (300 GB per month, and I use about 200).
However, Apple TV needs a better interface and the ability to add apps, like the CBS app, for example. CBS doesn't offer its shows to Hulu Plus and few in whole seasons to Netflix streaming. So I either watch the few CBS shows I like live or stream them through CBS.com or the CBS tablet app. Yes, I have to sit through commercials, just like with Hulu Plus or live TV, but it's a small trade off to save more than $50 a month. But I would like the option of downloading these apps directly to the Apple TV to avoid AirPlay, which needlessly takes up extra bandwidth. Plus, no matter how strong my connection is some days (speed testing at 40Mbs), AirPlay absolutely kills the picture and sound. I don't know if it's the technology or if the extra bandwidth is clogging my wireless router. Maybe both. I don't know.
Then again, it needs to not be tied to a cable account. I have the ABC Apple TV channel, but it asks for a cable account. Why? ABC is an OTA network. I don't have to pay to watch it live, why should I pay for cable to watch it on Apple TV? If I have cable, I most likely have a DVR, so I don't really need Apple TV. This format is understandable for cable channels but not OTA channels. It's absurd to have to provide cable log in credentials to watch an OTA channel.
Anyway, I don't see Apple shaking up the delivery of TV, but they still have room for improvement with Apple TV.
I really don't see how things are going to change dramatically all at once. Maybe slowly over time as more people adopt high-speed Internet service and if those services are severely capped. I'm lucky enough that my local cable Internet provider has an extremely high cap compared to my usage (300 GB per month, and I use about 200).
However, Apple TV needs a better interface and the ability to add apps, like the CBS app, for example. CBS doesn't offer its shows to Hulu Plus and few in whole seasons to Netflix streaming. So I either watch the few CBS shows I like live or stream them through CBS.com or the CBS tablet app. Yes, I have to sit through commercials, just like with Hulu Plus or live TV, but it's a small trade off to save more than $50 a month. But I would like the option of downloading these apps directly to the Apple TV to avoid AirPlay, which needlessly takes up extra bandwidth. Plus, no matter how strong my connection is some days (speed testing at 40Mbs), AirPlay absolutely kills the picture and sound. I don't know if it's the technology or if the extra bandwidth is clogging my wireless router. Maybe both. I don't know.
Then again, it needs to not be tied to a cable account. I have the ABC Apple TV channel, but it asks for a cable account. Why? ABC is an OTA network. I don't have to pay to watch it live, why should I pay for cable to watch it on Apple TV? If I have cable, I most likely have a DVR, so I don't really need Apple TV. This format is understandable for cable channels but not OTA channels. It's absurd to have to provide cable log in credentials to watch an OTA channel.
Anyway, I don't see Apple shaking up the delivery of TV, but they still have room for improvement with Apple TV.
HobeSoundDarryl
macrumors G5
An excellent post. If we just accept all that "as is", could you explain how:
- to plug an Apple in so they can take their 30% off the top (and not call that "waste" from us consumer's points of view)
- how to motivate the players other than the "bundler & delivery mechanism" to take the leap of faith to change to the new system all under an Apple's control
- why the "bundler & delivery mechanism" players will not jack up their broadband rates to make up for any such losses to this new model (which is entirely dependent on deliver through the same cable-owned pipes).
I get that there is profit (and greed) and "waste" in the current model. The new model that replaces the "bundler & delivery mechanism" with Apple is unlikely to have Apple doing it for a lot less than what a Comcast or similar will take. And Apple's replacement will still entirely depend on a that Comcast or similar's broadband pipe.
If I'm Apple, do I take the hit to make this go? No. Why bother if I'm not going to make money?
If I'm Comcast, do I take the hit? No, if someone takes my cable revenues, I'll just make up for it with tiered rates on broadband. Where they going to go? For areas where my cable broadband isn't the ONLY broadband choice, isn't the other guy in the cable TV business too (in my area, I'm lucky enough to have 2 choices: Comcast vs. AT&T Broadband. Both offer broadband and cable subscriptions. Both would work in unison if an Apple took their cable subscription revenue. There is nowhere else to go to get the broadband to make Apple's hypothetical replacement work).
If I'm the other end of the chain, do I want to take this huge leap on hope that I'll make more money when I can see the consensus of the consumers is an expectation of big savings paramount in some "new model"? I know that Apple and the Cable guys won't take the hit. So if the consumers get a big discount, who's left to swallow all that lost revenue? I'm all that's left in that new chain. So why do I want to do this?
In all views of this dream from our (us consumer's) point of view, I can't reconcile the above. To go to a new model, all of the players beyond us will want to make MORE money, not less. We consumers think a new model must come with everything we want to watch- sometimes even commercial free- for a lot less than we pay now. And we expect Apple to get a nice cut too. Someone explain why the others beyond us & Apple want to move on this "new model."
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Think I will have to double my bi-polar meds today. Yesterday I manic with the news of a new aTV introduction in April that would revolutionize the industry. Today I depressed that the introduction really doesn't matter because it can't change anything. So happy...so sad.
Eddy Cue was the one who delivered on the industry changing iTunes deals we take for granted today. Eddy Cue is still alive and still at Apple. That he wasn't able to get this done, shows how deep the TV industry has their heads planted in the sand.
Apple's strategy is a good one. It's the trojan horse that enabled the iPhone to exist and to become so successful. Work with the current market masters and eventually become so popular that Apple gets to dictate terms.
Like they did with AT&T, they make an exclusivity deal with a cable partner one by one in each market and instead of giving out the standard cable box, cable companies give subscribers a free DVR capable AppleTV. TimeWarner in this case gets a key differentiator from their cable competitors by having an Apple product and Apple gets to put millions of AppleTV's with the iTunes Store in people's homes.
Despite all this, I still think Apple should have bought Netflix with their content deals and huge subscriber base.
At least in the US cable companies rarely compete in the same geographical location so the AT&T approach doesn't apply. If you live in zip code XYZ you get Comcast, if you live in zip code ABC you get TWC, etc.. Incentives to switch are pointless when customers have no choice about who their provider is.
Looks like my OTA --> HD Homerun --> EyeTV --> Apple TV system is going to become a long-term solution.