Apple, TV, Cable and the future

The one major mainstream technical industry that Apple hasn’t turned on its head yet is television.  Before his death Steve Jobs was expressed his frustration with the gatekeepers of the television networks (aka, the content providers). These guys, the networks and the cable companies, have had a stranglehold on the industry and don’t want to see Apple steal their business like Apple did with the record labels. Therefore they’ve been loathe to deal with Apple. The second big problem is that these same people, cable companies, control most of the bandwidth for broadband consumer internet services in the U.S..  So if anyone starts to threaten their stranglehold on programming (Netflix) then they can throttle the internet traffic to that specific service. Just ask Netflix how this is going for them.

Before he passed away Steve Jobs told his biographer, Walter Isaacson, that he had finally cracked the TV issue. So now, the predictions of a true Apple TV are coming fast and furious. What most people think is that Apple has come up with a new simple way to make a TV work. Something like Siri for your TV. I’m sure this is true to some degree, but really, how complicated is a TV.  You point and click a remote, most people are already pretty good at this.  Will Apple improve on it, of course, that’s what they do.

The real problem with TV is this….cable. Or satellite, depending on who you are.  Anyone who has some sort of pay TV service is paying for a couple of hundred channels that they don’t want.  The thing about TV that needs to change is the system of delivery.  The whole idea of a television channel is antiquated and unnecessary. No one cares (except TV execs) what channel a show appears on. Consumers are only interested in the actual program, movie, game show, whatever, not the people who broadcast it. Do you really care who publishes the books you enjoy? No, you just buy the book. You probably don’t even know who published your favorite book, you’re just glad they did. I know this is true for me.

So what will Apple do?  I have no idea, but here is my prediction, which may be WAY OFF, but it’s fun to speculate.

Apple will cut a deal with a major Cable subscription service (Comcast, ATT Uverse, Time Warner). Apple will pay this cable company some ridiculous sum per user to get all the bandwidth they want.  Then Apple will charge the consumer slightly more than that rate to pick and choose what shows they want to watch. As much of it as they want. When and where they want to watch it, all seamlessly organized and presented through Apple products.  

The chosen cable company will continue to pay the content producers (TV networks) the same amount they pay them now, so they remain happy. Now users don’t have to browse through 600 channels, memorize what network the tv shows they like come on, or pay for crap they don’t want (Home Shopping Network).  They can watch the shows they want to and everybody still gets paid.

I’m sure there are massive flaws in this plan. I’m not an expert when it comes to these industries, but I think this is in the same ballpark as what may happen in the future, because no one in the TV game right now is going to let Apple take over their industry, and this method will allow all the current players to make money.  Apple doesn’t need to make money on the service, because they make money selling you the hardware you use to consume all the content.  The iTunes store didn’t make much money in the beginning either, but Apple sold a few hundred million iPods and became the most valuable company on earth