Apple’s long awaited and highly anticipated streaming TV service is ‘on hold.’ Why? It’s simple, really. The television industry is a tough nut to crack with many players that each take a slice of the enormous profits in the industry, and few of those participants want to share those profits with Apple.
This is not a technology issue. Apple already has the technology to store and stream to subscribers every television show and movie ever produced, along with live TV stations from almost any locale. Not only does Apple have the technical chops it has the money and a growing base of customers who would quickly move from their current entertainment and information provider– cable TV networks, television networks, and local TV stations– to a streaming service offered by Apple through Apple TV.
The current parties know of Apple’s massive clout with customers. They know of Apple’s history with the music industry (Apple saved the music industry to die another day). And they know that if Apple is allowed to become a premier television subscriber service, that Microsoft, Google, Samsung and others with very deep pockets and a penchant for following wherever Apple goes, will not be far behind. With apologies to The Soup Nazi, the TV industry seems to be saying to Apple, “No TV for you!”
All those new TV subscriber services will dilute and fragment the current customer base for cable TV, television networks, and local TV stations, and their audiences mean revenue and profits, two magical components of their business model that they are not willing to share.
What people want is obvious. We want video– information, entertainment, and live television– on demand. Cable TV provides some of that, but they charge an enormous sum to subscribers to include a wide variety of network television channels that many people do not watch; a complicated bundling and packaging practice that helps to drive up monthly subscriber fees.
Cable TV’s subscriber base is not growing, it’s diminishing in the face of a massive sea change in how people obtain their news, information, and entertainment in video form. Think YouTube, Vimeo, and thousands of other video distribution systems throughout the internet which have caused viewers to migrate from the traditional bundled packages to a disparate variety of sources which play on multiple mobile devices, and not just the family room TV.
Just as the music industry in the iPod era after the turn of the century, the television industry is on the precipice of change but they don’t know which way to go. If they do nothing, their subscriber base dwindles. If they take Apple’s route and share slices of their diminishing pie, their subscriber base dwindles.
Just like internet advertisers who see up to 40-percent of their ads blocked by viewers tired of the animation, irritation, and in-your-face ads of the past 10 years, the cable TV industry has only itself to blame after reaping untold profits for decades by providing bundled services, increasing rates, and poor service.
If Apple could bundle a base of two to three dozen popular television channels and then add others on an ale-carte, per monthly fee basis, it would upset the industry’s precarious balance and who knows which way the industry behemoths would fall; but fall they would.
For now, Apple has placed its television service on hold but the company has the clout, resources, and discipline to upend the good old boy industry overnight. Should industry players get in line and play ball with Apple, or should they tough it out on their own?