Monday, March 5, 2012

Will you watch TV with an App?

I've posted about the rumours of the Apple iTV before (e.g. Will Apple own your living room), so I was interested when I came across an article in Business Insider called Apple's TV Dream Revealed, because it adds some interesting flesh to the rumours. Once again with Apple it's not the hardware that's important but the software (think iPhone 4S and Siri). Apple actually can't make a TV set that is technically much better than its competitors, but they will be able to make one that looks very cool, and with Siri and the iPhone acting as a remote, is easy to use. But that's not really the point.
    What this article posits is that Apple may be planning to alter the relationship we have with TV content providers. To date we have consumed TV shows via traditional TV channels funded by advertising and cable/satellite channels funded by subscription and advertising. Both schedule TV shows when they choose and until the advent of the PVR you had to watch your favourite shows when "they" scheduled them. Today many of us time-shift our programs with our PVRs and in my house we rarely watch a show when it's broadcast, mainly so as we can skip the adverts.
   Fast forward a couple of years when Apple has done deals directly with the producers of your favourite TV show: House, Downton Abbey, NCIS, Dr. Who... each is available as a separate App on iOS and therefore the Apple iTV. The Apps will not be free (though some TV Apps may be), but will either provide access to all shows in a series with a single App purchase (something like $4.95) or an in App purchase per episode ($0.99). The Apps will provide extra content, just like the current websites for hit series do; Grey's Anatomy is a typical example, with extra behind the scenes footage, bios of the actors, links to social media and information providing a wealth of added value.
   Now I'm not a TV executive, and I don't know what their funding models are, but I'd be surprised if the producers currently make as much as 66 cents per viewer per episode ($0.99 minus Apple's $0.33 App Store cut). Also this revenue stream will be global and across not just the iTV but all existing iOS devices (i.e., the iPod Touch, iPhone and iPad). There are currently around 200 million iOS devices out there - that's quite a market for a hit series to tap into. 
   For you, the consumer, the advantages are that you can watch a series across all your iOS devices, the iTV in the living room, your iPhone on the bus, and your iPad in the hotel. You can watch an episode at your convenience as soon as it is released globally, without having to wait 6 months for it to air in your country and you have access to all the extra series related information. Finally, think about your current relationship with your cable/satellite provider. What are you really getting for your subscription? You're getting a few shows you really want to watch bundled with hundreds of shows you never watch. Is that a good deal for you or would you rather just pay for the shows you like.
   Apple may be about to do to the TV industry what it did to the music industry with iTunes.