Apple’s Latest TV Tease

For the best part of a decade, the heads of Apple, including Steve Jobs and current CEO Tim Cook, have had a side-career teasing fanboys and analysts about a major move into TV and video.

Jobs famously told his biographer, Walter Isaacson, that he “finally cracked” the secret to re-engineering the TV viewing experience, and just weeks before his death called tech columnist Walt Mossberg to say he had figured out how to “remake” television.

Whatever it was Jobs had figured out, though, he took it with him to his grave because nothing like what Jobs described to Iasaacson was ever released.

That didn’t stop his successor, Cook, from continuing the tease, however. For several years after, Cook made a habit of dropping hints about some new TV project or another, and stories leaked out of Hollywood every six months or so that Apple content chief, Eddie Cue, was talking with the studios and TV networks about licensing content for some sort of new Apple video service.

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Thinking Inside The Box

Remember the Great Set-Top Box War of 2016? That was the brouhaha touched off by then-Federal Communications Commission chairman Tom Wheeler’s effort to force cable TV operators to “unlock the box” and make their video service available as a standalone feed so that third-party device makers could incorporate the service into their own platforms and within their own user-interface functions.

The proposal met fierce opposition from the TV networks and cable operators, who feared losing control over the uses and presentation of their programming, as well as from the Republican members of the FCC itself.

After a bruising, months-long fight, Wheeler was forced to pull the proposal on the eve of a planned vote. It was later dropped altogether after Wheeler left and a new, Republican-appointed chairman took over.

Yet for all the sturm und drang, a pair of recent announcements suggests that cable operators and box makers are finding ways to move beyond the controversy to achieve at least some of Wheeler’s hopes regarding innovation in the pay-TV market, if not his ultimate goal of breaking up the traditional pay-TV bundle.

At Apple’s Worldwide Developers Conference this week, the world’s biggest (by market cap) device maker announced a wide-ranging partnership with number 2 cable operator Charter Communications to incorporate Charter’s Spectrum TV app into Apple devices.

As part of the deal, the Spectrum TV app will be available on Apple’s next-generation set-top box, the Apple TV 4K, due later this year. Spectrum subscribers will be able to access “hundreds” of live channels, according to the announcement, and “tens of thousands” of video-on-demand titles through the Apple box.

While Charter has made the Spectrum app available on Roku devices since 2015, the Apple integration goes deeper. For one thing, the Apple 4K will incorporate Siri, allowing at least some functions of the box and its apps to be controlled with voice commands.

More notably, Apple’s latest operating system for the 4K box, tvOS 12, will enable the device to access a broader range of Spectrum subscribers’ program permissions and authorizations, including TV Everywhere authentication — one of the principal goals of Wheeler’s proposal. As described in the announcement, “Apple TV simply detects the user’s broadband network and automatically signs them in to all the supported apps they receive through their subscription—no typing required. Zero sign-on begins with Charter later this year and will expand to other providers over time.”

The feature would still require subscribers to get both broadband and video service from Charter, but it moves Apple TV a step closer to being a viable replacement for the traditional cable box.

Also this week, Amazon unveiled the Amazon Fire TV Cube, which combines features of Amazon’s current 4K-capable Fire TV box with those of its Echo smart speaker, including the Alexa voice assistant.

While Amazon has not announced any pay-TV service integrations with the Cube, the box does support HDMI-CEC (Consumer Electronics Control). Though still a bit dodgy, HDMI-CEC is designed to allow devices connected to a TVs HDMI ports to communicate back and forth with the TV, which means Alexa will be able to control at least some functions of compatible TVs though voice commands.

The Cube also contains IR (infra-red) blasters and comes with an IR dongle that attaches to the back of the device, giving Alexa a measure of control over a variety of cable boxes, soundbars and other TV-connected devices.

According to Amazon, the Cube is compatible with “more than 90 percent” of cable and satellite services, including boxes from Comcast, Dish, DirecTV, Charter, and Verizon.

To be sure, both the Apple and Amazon solutions leave the incumbent pay-TV operators in control of subscribers’ program permissions, as well as how that programming is packaged and presented — a grip Wheeler had hoped to loosen. And they do nothing to break up the Big Bundle.

Yet, by introducing innovations such as effective voice control they could begin to render that packaging and visual presentation moot, achieving through attrition what Wheeler tried to achieve by fiat.

 

Amazon, Google And The Great Game

For the better part of the 19th Century, the British Empire and Czarist Russia (and for a while Napoleonic France) struggled for influence and control over Afghanistan and the broader Islamic Central-Asian region. Russia feared England’s growing commercial ambitions on the doorstep of the Russian Empire, while England feared that Russian control of Afghanistan would allow it to threaten India, the “jewel in the crown” of the British Empire.

Although the European powers never went to war against each other directly over the region, they engaged in a decades-long series of political and diplomatic moves and counter-moves (and occasional indirect military moves) that historian came to call The Great Game.

Something like a 21st Century version of the Great Game is now playing out among today’s digital empires for control over virtual territory on the connected devices and streaming services in Americans’ homes. Read More »

Fool Me Twice: How Spotify Could Become the New iTunes Store

Back in 2003, as the music industry was reeling from widespread, Napster-fueled piracy, Apple CEO Steve Jobs made the record labels an offer they couldn’t resist: Give me a license to sell individual tracks but let me sell them cheap enough to be a viable alternative to free, and I’ll wrap them in DRM for you in a way that consumers will accept, so they can’t be copied.

The labels leapt at the deal and the $1.00 download became the new atomic unit of the business.

Though thrilled at first to have an answer to piracy the record companies eventually came to rue the arrangement once they figured out that Apple was using those inexpensive downloads to supercharge the market for its high-margin iPods and later iPhone hardware, and was reaping far more of the value being created by their music than they were. By then, however, they had become captive to Apple’s ecosystem: Thanks to Apple’s proprietary DRM, the only way to sell music to iPod users — at the time the largest segment of the portable music-player install base — was through iTunes, under terms effectively dictated by Apple. Read More »

Apple Tip-Toes Into Original Video

The Wall Street Journal reported this week that Apple has begun talks with producers in Hollywood about buy rights to original TV series and movies. If true it would represent at least the third attempt by the iPhone maker to crack the TV code, so far without notable success, although its strategy this time appears to be different from its previous efforts.

I say “appears” because, according to the Journal, Apple itself  “is still working out details of its business strategy built around original content.”

The new shows, which could begin appearing by the end of this year, will reportedly be made available to subscribers of Apple Music, suggesting this isn’t an attempt (yet) to build a direct competitor to Netflix and Amazon Prime. The fact that Apple is targeting individual movies and TV series rather than networks suggests this is also not some sort of skinny bundle play to compete with Sling TV and the new Hulu service. Read More »