The world’s most valuable company didn’t add much value to the world last week with its new video offerings. Chief strategy officer Brad Berens explores Apple’s missed opportunities.
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By Brad Berens
There’s a passage toward the end of Walter Isaacson’s majestic biography, Steve Jobs, about what was on the Apple founder’s mind as he was dying of cancer:
He very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant. “I’d like to create an integrated television set that is completely easy to use,” he told me. “It would be seamlessly synced with all of your devices and with iCloud.” No longer would users have to fiddle with complex remotes for DVD players and cable channels. “It will have the simplest user interface you could imagine. I finally cracked it.” (Page 521)
Jobs’ vision for TV came to mind last week as I poked around the voluminous articles written about Apple’s two new TV offerings.
There’s a striking contrast between what Jobs imagined and what the company announced eight years after his death.
Apple first announced a revamped Apple TV app that integrates your different sources of video entertainment—with the startling exception of Netflix—into one interface. While on one hand this keeps with Apple’s history of simplifying and integrating experiences, it’s nothing pioneering.
Comcast’s Xfinity has been integrating Netflix programming into its X1 box search results for years, and just started to include Amazon Prime into search a few months ago. Likewise, Roku has integrated search. This is not the same as curation, but that’s mostly a question of how results are displayed. The biggest surprise was that the app will be available outside of Apple hardware Roku boxes and smart TVs (even those built by arch frenemy Samsung).
Next, Apple announced its highly anticipated streaming service, which turned out to be as exciting as its name: Apple TV+. Here’s how my friend Shelly Palmer summarized the service:
Every original program on Apple TV+ will be ad-free and downloadable for offline viewing. The platform, launching this fall, will feature shows created by and starring some of Hollywood’s biggest names (many of whom got on stage) like Steven Spielberg, Jennifer Aniston, Reese Witherspoon, Jason Momoa, Kumail Nanjiani… and, oh yeah, “one more thing”: Oprah.
Apple was light on details about Apple TV+. Rather than focus on specifics, it highlighted the names you know and the shows you’ll (hopefully) soon enjoy. Apple TV+ will be a part of the redesigned Apple TV app, and will cost some indeterminate amount of money when it launches later this year.
Aside from programming created by mostly-aging celebrities, we don’t know a lot about Apple TV+. But here are some things that we can deduce:
It’s not a television set.
The Jobs approach was to create elegant hardware that does everything predecessor technologies do better and also does new things (think of how the iPhone deployed the touch interface and apps).
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Most writers have positioned Apple’s new streaming service against Netflix, but as the Hollywood Reporter’s Natalie Jarvey cagily observed, “The tech giant’s content push signals an intent to dethrone Comcast, not Netflix, as consumers increasingly cut the cord on traditional pay television.” Instead of being just another streaming service, Apple wants to own living room access to entertainment.
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Instead, with Apple TV+ the company is going head-to-head against competitors. Like Amazon and Roku, customers can plug in other programming. Like all the other streaming services (Netflix, Amazon, CBS All Access, DC Universe, the forthcoming Disney+ and AT&T offerings) there’s original programming that you can’t get elsewhere.
It’s also unclear to what extent Apple TV+ integrates with the rest of Apple’s smart home ecosystem (SIRI, HomePod, et cetera).
It’s not a DIY platform.
It’s easy but mistaken to underestimate Apple’s marketplace power in controlling the opening screen of the iPhone App Store. Even though Jobs resisted third-party apps at first, the App Store quickly became a key driver in making the iPhone into the first screen, everything-device for its users. Apps also became a way for businesses of all sorts to get closer to their customers, and for new businesses to accelerate growth.
From the list of partner companies that Apple has shared, it does not look like entertainment startups will find a welcome mat at Apple’s front door. (We might learn more during Apple’s Worldwide Developers Conference in June.)
This means, for example, that YouTubers or Instagrammers who develop followings will not be able to create niche subscription offerings on Apple TV.
Instead of a platform upon which others can build, Apple has replicated the command-and-control approach of the cable and satellite companies.
They chose the wrong rival.
Most writers have positioned Apple’s new streaming service against Netflix, but as the Hollywood Reporter’s Natalie Jarvey cagily observed, “The tech giant’s content push signals an intent to dethrone Comcast, not Netflix, as consumers increasingly cut the cord on traditional pay television.” Instead of being just another streaming service, Apple wants to own living room access to entertainment.
This is not a bad strategy, as cable providers like Comcast face growing threats from trends like 5G, ATSC 3.0 and more that Apple can use to its advantage.
Ultimately, though, the strategy that Apple should have emulated is Amazon’s. As I have argued earlier, Amazon’s strategy with Prime Video is to make paying the annual fee a no-brainer because customers don’t want to lose all of Prime’s seemingly extra benefits beyond two-day shipping.
Likewise, Apple should give customers a year-long subscription to Apple TV+ programming as a seemingly free benefit of buying a new iPhone, iPad, HomePod or Mac. When the year is up, keeping “free” access to that programming could push a customer over the edge in deciding that it’s time to get a new device. Or, when the time more naturally comes to buy a new device, a shopper should have the extra benefit of a year’s worth of Apple TV+ programming as an incentive to choose Apple instead of Samsung, Dell, or HP.
It’s boring.
What I really wanted to see from Apple and television was a gigantic iPad hanging on my living room wall, connected to both my iPhone and to Siri, giving me access to all the different corners of my life from recipes to the evening news to baby pictures of my kids, able to set up elegant video chat with faraway friends and family, and finally letting me stick all those remote controls in a drawer where they belong.
Instead, we got Apple TV and Apple TV+. Sigh.
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Brad Berens is the Center’s Chief Strategy Officer. He is also principal at Big Digital Idea Consulting.
See all columns from the Center.
April 3, 2019