I'm pretty firm in my belief that Apple will not release a television. However, I'm equally firm in my belief that Apple will get into the “television business” in a big way. The question is, how?
I think the answer is not only out there, but fairly clear: Apple's television push will come in the form of a materially enhanced version of the AppleTV. It will include content availability and features not currently available to the device.
Let's look at the AppleTV today. Currently, the TV content available on the AppleTV is limited to library content you can purchase or rent, and a little bit of live content available via apps. The library content consists both of shows long since aired, as well as shows just aired (or, in the case of select shows like Downton Abbey, prior to airing with the purchase of a season pass). The live content is currently limited to sports via apps for baseball, basketball, etc.
In order for Apple to transition the AppleTV from hobby to mainstay, they need to do two things: get all live content onto the box, and provide DVR functionality. In other words, they have to replace the cable company set top box. That's good news because even the best of these boxes are downright awful.
There are two primary ways Apple can get TV content onto the AppleTV from here. One is pretty easily dismissed, and that is to include a CableCard slot. For those who don't know, CableCard is a clumsy attempt by the FCC to force cable companies to open up their networks to alternative set top boxes. It allows access to cable content without the cable company set top box. For a while many TVs were sold with cablecard slots, and it is still used by TiVo for its DVRs.
However, in practice cablecard generates the kinds of consumer ordeals and confusion that Apple usually stays away from. Many cable companies require a truck roll to install the cards, they can be finicky, present issues when cable providers mix digital and analog stations, and, well, are generally just not a very simple solution for most households. If they were, they would have more than miniscule market penetration. Google cablecard problems if you don't believe me!
Fortunately we have already seen alternative – and better – ways of getting live content onto our screens: apps. The most common are individual network apps which function only if you otherwise subscribe to (ie pay for) that channel via your cable provider. This has the added benefit of not alienating the cable provider from the process and profits, and saves Apple from untold numbers of negotiations for individuals shows.
HBOgo is a prime example of this. You install it on your iPad, provide your cable subscription credentials, and voila – HBO on your iPad. In addition to a live stream, the app allows access to library content. One could easily envision a collection of these “channel apps” giving us all the live programming we want, in addition to library access to previously aired shows. And technically there is no reason they couldn't be installed on the AppleTV should Apple choose to allow it (and work out the details with cable providers…)
One challenge this solution poses is the lack of integration across channels. Though I do believe that Apple will attempt to provide direct navigation via Siri, sometimes you really just want to channel surf, or look through a consolidated guide. You can't do that if you have to switch from app to app every time you want to change the channel.
The solution here: Apple could provide a consolidated “meta app” which draws content and scheduling information from all your channel apps. As it turns out, cable companies are already making these apps. Cablevision, TWC and others already make iOS apps which provide a full interface to all live cable programming to which you subscribe. They only work in your home (ie on your cable company provided network) but a TV in your living room would fit this mold. Here again these apps could easily work on the AppleTV.
- Apple will open up the AppleTV to apps
- we will see a proliferation of specific channel apps
- Apple will release a “meta app” which pulls in content from your channel apps, and library, and integrates it all into a unified interface
- The meta app will co-exist with and compete with existing cable provider apps
The other feature Apple needs to provide is DVR functionality. I think the writing is on the will here as far as how Apple will address this. Apple – and everyone else these days – is all about the cloud. I think the in-built storage of the AppleTV will be increased somewhat to allow space for apps and a larger buffer to stream shows. But when you set up recordings they'll be stored in the cloud for streaming later on when you want to watch.
I think this functionality will be handled in the unified meta app itself so that Apple can provide and control its usually robust user experience. It's likely that individual channel apps may also offer their own channel-specific DVR type functionality, though in general my bet is that the meta app will be the primary.
Taken together, the solution I've outlined:
- Allows Apple to fully replace the cable company DVR
- Spares Apple from countless licensing deals
- Doesn't cut the cable company out of the picture – you still have to pay your monthly cable TV fee (which makes cable providers likely to play here)
- Provides Apple with the opportunity for subscription revenue (for DVR functionality and space for example) on top of AppleTV hardware revenues
- Relieves the cable providers from having to purchase, deploy, and maintain the awful STBs they currently use.
As for timeframe, I think this is something we will see in CY2013. Personally, I can't wait to chuck the Scientific Atlanta DVR that Cablevision rents to me for $15/mo or whatever it is. I'd happily pay that – or more – to Apple for a better solution. Maybe Apple turns around and gives the cable provider a cut of that. Either way, Apple takes over the television.