WWDC: Apple TV — The underestimated story

Few are talking about how Apple’s plan to become a key platform provider in the TV space is breaking new ground, but it’s going to become more important in the next 12 months.

WWDC: Apple TV — The underestimated story
Apple

Apple’s tvOS 12 got some attention during the WWDC keynote, but the story that doesn’t seem to have broken the surface is that Apple’s slow and gradual plan to become a key platform provider in the television space is breaking new ground.

TV: Unwired

Apple announced two significant items that show its ambition to replace the cable TV box is slowly bearing fruit:

  • Charter Communications is going to offer its Spectrum Cable Customers the option of choosing an Apple TV instead of a traditional cable TV box. Customers will then be able to access live and on-demand entertainment using Spectrum’s future Apple TV, iPhone, and iPad app. Apple has similar arrangements in place with AT&T DirecTV Now, CANAL+ in France, and Salt in Switzerland.
  • The new OS (available this fall) will automatically recognize whose broadband network you use when you set your Apple TV up. The system will then automatically sign that Apple TV into all the supported apps you are entitled to within your broadband subscription.

This is a super-smart move.

You see, it’s not just aimed at consumers (though the offer is both compelling and convenient); it’s a viable proposition to cable TV suppliers.

Apple’s business deal

Why is it viable?

Think of it this say — at present, cable TV companies must source and supply the TV box used by subscribers, they must maintain the software, and they must also bear the cost of repair and replacement of the devices.

The user interface offered by many cable TV boxes doesn’t usually appear to be a candidate for any design awards, which dulls the customer experience and generates customer churn. Apple TV puts an award-winning designer (Jony Ive) in charge of UI design, slots into an already highly popular and credible platform, and even has hardware enhancements other boxes just don’t have, such as Dolby Atmos support and a vast library of 4K movie content. I don’t have facts and figures to hand, but it seems to me that offering Apple’s box will deliver genuine cost and customer retention advantages to cable firms that choose to do so.

TV: A changing industry

Apple was thought to be having conversations along these lines with cable TV firms some time ago. At that time, those conversations seemed to come to little, but time, customer need, and (indeed) the cable and broadcast industry are also undergoing vast change.

The best cable firms now understand that their role is one of content curation and customer support, and they recognize that as more agile competitors enter the space, building close customer relationships is no longer a sideline to their business, but has actually become their core business. They read the data that tells us people are more likely than ever to watch content on mobile devices, and they need to retain those eyeballs to maintain their ads revenue. That’s why Apple’s offer makes so much sense.

Apple’s commitment to regular software updates and its vast developer ecosystem means its offer stands out in contrast to the competition. Fire TV is popular, but what it provides is relatively limited. In the U.K., even the most diehard cable TV users now find themselves using Sky/Now TV and/or an Apple TV for their content choices.

Stay tuned

Apple can see that the industry is changing, but as its move to reach a happy finish in negotiations with Amazon prove, at some level it is now ready to broker content provision and supply deals that make its platform attractive to content providers. Which inevitably means money.

I think we’re going to see Apple ink more deals with cable firms as it works toward becoming a content provider in its own right. Apple’s TV ecosystem is also gradually staking a new home as part of the new television infrastructure.

All the company needs to do now is keep a bird’s eye view over the state of the global television industry and ensure it pumps all the latest and most compelling TV technologies inside its box. Developers — and an industry keen to stay in business — will do the rest.

The underestimated Apple TV story is switching up the volume, not just the Atmos.

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