Tomorrow is September 9, Apple’s fall event where they’ll announce their new iPhones and Apple TV. The new Apple TV is expected to be a large break from earlier versions, supporting an app store and providing better gaming capability. It’s been widely anticipated for years. In fact most of my posts about Apple TV date from 2013 and 2014. So while my timing was off by a few years (Apple Watch may have had something to do with this), I think those Apple TV posts hold up well enough they’re worth revisiting. So let me quote from them below, and then add a few updated thoughts at the end.
Bullet points below are quotes from my earlier posts on Apple TV:
- Watching TV is already far too complicated. I’ve said this before but it bears repeating: in many households only a single person really knows how to power up the TV. And I often see people watching expensive HD TV sets on low resolution channels, or set to the wrong aspect ratio. TV was invented in the 1950s, and has been in widespread daily use ever since. It’s a scandal! Call the usability police.
- So long term, the market for TV streaming boxes will replicate the structure of the smartphone market. Apple TV premium, customized Android clones at mid/low end. Does this box need an app store? Yes, it’s essential. Roku, TiVo and others need to accept reality and go Android to leverage a scalable app store ecosystem. The app store opens up the complete app experience, which as Ben Thompson points out is far bigger than just watching TV. Games and photo sharing of course, but even regular TV viewing will be improved with apps. In particular we’ll gain social. This will let you share comments with anyone else in your contacts who’s watching the game, flashing snark on the big screen. ESPN will like owning their own social network. A pleasant side effect of this imagined future is it will keep MG Siegler’s sports tweets off twitter.
- But the real key here is simplicity. People know how to launch an app and view content. But they can’t even turn their existing TVs on. So as more content becomes available in “dual mode”, on both cable and via apps, people can choose. And they’ll choose app simplicity. And once people watch 80, 90, 99% of their TV content via apps, cord cutting will happen. Slowly, then all at once.
- If Nintendo continues having trouble, I could see them sell a third party controller with a subscription service that works with Apple TV. That is, you buy a third party Nintendo controller for your Apple TV, and then pay $5/month to get the entire Nintendo game library. Pretty sweet.
- Will there be another generation of Microsoft Xbox or Sony Playstation released after the current one? I’ll stick with my long standing no, though it’s hard to be certain.
- If console gaming gets commoditized by Apple TV and Android TV, where does premium gaming go? Glad you asked! Like many, I think it’ll move to Oculus Rift and other virtual reality headsets. This is a brand new premium gaming market, and as such needs space to tune the hardware/software at the system level. This should leave it relatively immune (compared to console games) to being absorbed by the
Borgapp smartphone ecosystem.
- Roku will be forced to move to Android to get an app store. Think Roku now as Blackberry in 2009.
- TV screens will become a way to share app viewing to an entire room. Music, movies, games, TV shows. All just apps.
- Of course, many people continue to believe cord cutting will allow them to selectively pay a la carte for only those channels they watch, and from this unbundling save some money. This is wrong but makes a certain kind of sense. Most households only watch 17 channels out of the hundreds they get in their cable bundle. This number, only 17 watched channels, has remained remarkably stable over time. The problem is each household watches a different 17 channels. So the money coming in from the cable bundle cross-subsidizes all that content. Ben Thompson notes “Cable TV is socialism that works“, pithily capturing the underlying economics. There is some nuance here, in that sports drives most of the bundle cost. See for example this article by Derek Thompson, or my post for more details. But the big picture remains simple enough. Unbundling and cord cutting will shift costs around somewhat, but it’s certainly not going to save you a ton of money.
- Not only does Comcast customer service suck. The entire edifice of modern cable TV is a usability nightmare, layering 60 years of cruft on to an originally simple user experience – turning a dial across a handful of channels to pick what you want to watch. Now we have multiple HDMI input TVs. DVD players. Cable TV boxes. After 60 years, TV should be mature tech. Instead it’s user experience (UX) madness. TV desperately needs a rethink based on the usability of modern tech.
- It’s clear by now where the urgently needed new tech usability will come from – the user interface of the smartphone ecosystem. And we won’t just get usability, we’ll likely get a market that mirrors the structure of the mobile market.
One thing I noticed from these quotes above is even though I’ve long been a huge believer in voice interaction like Siri and Google Now (see here and here ), I didn’t explicitly point out how great that will be for universal search with TV. So let me just say it: voice control of TV will be awesome. So much better than typing using a clunky remote control to find shows.
I also stayed away from predicting whether Apple will get the rights to network TV shows currently available only through cable TV. Seems like this may still happen eventually, which would be great and accelerate cord cutting. But in the end I don’t think it matter all that much. Other TV services will take up the slack. Very similar to how Spotify and Pandora are perfectly fine if you don’t have Apple music.
Finally, I think it’s worth generalizing a bit about how the TV puck market will mirror the mobile market, with Apple premium/Android commodity. A couple of decades ago, everyone thought the Microsoft model was inevitable. In software, a single dominant platform owns it all. But at least for consumer markets where you pay for the hardware to get the software, it’s quite possible the smartphone model of a Premium/Commodity split may be more common. The Premium/Commodity split could generalize from phones to things like TV pucks, watches, PCs, internet of things devices, and perhaps even to self driving cars. To be clear, the Microsoft model of Dominant player/Niche player will retain its place for things like internet search, web services, etc. My point here is which markets eaten by software go Premium/Commodity versus which go Dominant/Niche is something to reflect on and pay attention to.
Appendix – links to my older posts on TV quoted above
- Digital Economics: TV and cord cutting – Jan 2013
- Next Gen TV Set Top Boxes are generalized platforms combining DVR + Cable + Receiver + Game Console – Sep 2013
- Multiple TV remotes showcase the evils of complexity. Smart TVs just make it worse – Jan 2014
- Timing is Everything. Apple TV, gaming disruption, and why futurists aren’t billionaires – Jun 2014
- The job to be done by Android TV is big screen app entertainment, which will (eventually) subsume existing TV – Jun 2014
- There’s a lot to be said for analyzing tech eras by user interface: Gaming, Oculus, Apple Watch. Oct 2014.
- Cord Cutting: You know it’s all about UX, ’bout UX. No savings. – Apr 2015