Foxconn Accelerating Sharp LCD Panel Orders to Launch Apple Television for Holiday Season?

[TallManNY]

It looks simple after someone has started doing it. Apple already has by offering on iTunes content that is also offered on cable; what they haven't done (yet) is making it available concurrently with cable. That's coming once companies decide they can make more money by doing that than by giving cable exclusives - money will be the key driver of this change and it simply hasn't been lucrative enough (yet).

If you look at the evolution of television and movies; content delievry has shifted from one method to another as choice (in the form of delivery capacity), and therefore revenue, has increased. Broadly viewed, it moved from 3 or 4 OTA broadcast channels to cable with HBO to cable / satellite with hundreds of choices. Internet content delivery offers a quantum leap in choices and will move content from a cable based model to a new one. ISPs owned by cable companies realize that and is one of the things driving bandwidth caps.

Right, but the key thing that you focus on is that "money will be the key driver" and that "therefor revenue, has increased". Everyone talks about this stuff as, "I want to pay less to the cable companies and just buy the shows or channels that I want!" The content providers and the cable companies do not want to offer a solution that results in less dollars being paid monthly to them. So when you start think about individual pricing, think about the iTunes model where it would cost thousands of dollars a month to buy all the shows that a typical family consumes on television each month. Or the product will come with ads that can't be skipped. But there is no, "everything gets cheap but I get all my shows and channels" solution. At least not a legal solution.

I for one am ready to pay for streaming always available shows and sports programs. I paid for NBA TV last year and while there were some technological hurdles and the blackout issues were terribly annoying. Basically, I liked being able to watch NBA games on TVs, computers and my iPad. The service could be made better and the NBA could still make a good profit on this, which they could share with the cable company.

 

[jlc1978]

Right, but the key thing that you focus on is that "money will be the key driver" and that "therefor revenue, has increased". Everyone talks about this stuff as, "I want to pay less to the cable companies and just buy the shows or channels that I want!" The content providers and the cable companies do not want to offer a solution that results in less dollars being paid monthly to them. So when you start think about individual pricing, think about the iTunes model where it would cost thousands of dollars a month to buy all the shows that a typical family consumes on television each month. Or the product will come with ads that can't be skipped. But there is no, "everything gets cheap but I get all my shows and channels" solution. At least not a legal solution.

A couple of things:
The iTunes model is only one part of the total picture. It is the ala carte watch anytime part. A content provider would operate more like Netfilx, streaming content but not allowing off line viewing, plus all the content won't be available all the time. It's a subscription based model. The two models can coexist quite nicely.

Content providers and cable companies do not have complementary goals since it's a zero sum game. every $ that's kept by a cable company is less the content provider gets and vice versa. If content providers can get more aggregate revenue from their own streams and the remaining cable subscribers than they wil change how they deliver content. Cable companies will respond with lower caps and hogher access fees to protect their revenue and drive deals where they get a revenue cut to not count against a cap, essentialally updating the cable model for the Internet age.

Ultimately, people may not pay less. The real losers are the 2cd tier cable channels that have low viewership but come as part of the overall bundle. They may not make enough revenue to survive as cable subscriptions dwindle.

 

[jlc1978]

Do people really wait 7 years to buy a new TV?

In less than 3 years, I upgraded my 720p, 42" HDTV ($875) to a 1080p, 50" ($650) - both Panasonic plasmas.

Currently my local Costco has a 70" LED-backlit Sharp LCD HDTV for under $2500.

In another 3 years I'd be willing to pay $1000 for that or something comparable.

The average age of a replaced TV in the US is around six years. The average cost of a replaced set was $460, and consumers have learned that any new tv technology will be cheaper in 6 months so they are willing to wait it out.

Apple has several challenges:
1. Come out with a compelling product that does something so much better than existing sets that people want it - such as HD did to regular TV.
2. Price it at a point where people decide to buy now rather than wait for cheer sets from competitors.
3. Come up with a model that is compelling to content providers. A really cool new display tech such as 4k is not that compelling hour content providers to produce content for if the total market penetration is tiny.

Apple can and may come out with a TV, but I see a content delivery system based of the existing Apple TV device as a better strategy because they can build a user base to then migrate to the next big thing.