From Apple TV to Apple TV Guide

There’s a chapter in Over The Top, How The Internet Is (Slowly But Surely) Changing The Television Industry that discussed possible models for pay-TV, and how the problem with an app-based system is that there’s no unifying overlay, no easy way to get from HBO to Netflix to NBC and back again.Apple has (possibly) decided to tackle this problem, abandoning their heady plans for an Apple virtual pay-TV service to go all-in on an Apple OTT program guide. It was an idea that made sense in 2015 when it was first suggested in Over The Top, but the OTT universe is changing rapidly, as my colleague Jesse Redniss outlined the other week in Oh My God! What the F*#k! Over The Top: 2016, and those changes make an app-centric, over the top program guide seem a whole lot less necessary.To begin with, the actual device manufacturers, Roku in particular, are all doing a pretty good job creating their own device-centric over the top program guides, and if there’s one thing we’ve learned over the years, it’s that if consumers already have a “pretty good” solution, they’re unlikely to go out of their way to get “really good” one. Especially for something like a program guide, that they don’t feel all that strongly about or use all that often. Financial MattersIf we look into the financials behind the Apple guide, we start to see some deeper weaknesses in Apple’s plan, too.Apple can monetize the guide in a couple of ways. They can charge device manufacturers a licensing fee to use it as their default guide. They can charge consumers to use it as a downloadable app. And they can add advertising to it in the form of actual video and display ads or in the form of paid recommendations.There are problems with all of these solutions. Device manufacturers have their own guides, so they are unlikely to pay for Apple’s. Consumers don’t care enough about program guides to pay money to download Apple’s in any sizable number. (Although if it’s cheap enough, say under $5, they just might. But here again, there are issues:  Apple will need to make the tablet or smartphone based guide interoperable with set top boxes and smart TVs in order to reach the much larger universe of people who don't just watch TV on their iPads.)Advertising might work, paid recommendations in particular, and going back to our original comments about adoption, there’s not a whole lot of revenue to be made from a system that only works on Apple’s own Apple TV streaming device.That, in and of itself, seems to be the main problem with Apple’s plan: they are yet again assuming a world where Apple’s superior product dominates the marketplace and that does not seem to be happening here. Roku in particular is quite strong, offering an equivalent interface, much better pricing ($50 vs $150, $70 if you want Apple’s older model) and thousands of channels worth of niche content. Google’s $35 Chromecast also has significant market share, as does Amazon’s $40 Fire TV. And if it seems like we’re emphasizing price here, we are: the average American home contains three TV sets, and equipping all of them with a streaming device quickly adds up.Apple had many chances to break into the TV market and seems to have squandered all of them, as we pointed out last month. That said, they still do have a way in: content.Apple is launching two shows this fall: a series version of “Carpool Karaoke” and a reality show called “Planet of the Apps” starring the first “V” in BRaVe Ventures, Gary Vaynerchuk, along with Gwyneth Paltrow and Will.i.am. Should they get a taste of success with those—and we think they will—Apple has enough cash on hand to actually buy out a major studio and get into the content game for realz.Don’t say we didn’t warn you. 

TV[R]EV is written, curated and incubated by the BRaVe Ventures team. Find TV[R]EV on Facebook and Twitter, and sign up for the newsletter to stay up to date on the TV[R]EVOLUTION.