So if this week's reports from Silicon Valley insiders prove credible (always a question mark), then Apple’s delivery system for its multi billion dollar content spend will be (a) free distribution on Apple devices (something we’d suggested when it made sense … a year ago) and (b) a TV app that allows viewers to buy a la carte subscriptions to services like Netflix, Hulu and the upcoming “DisneyFlix", a service that, unsurprisingly, mimics the one Amazon's been having great success with.

Not a bad plan on the surface, but dig a little deeper and a fatal flaw emerges: Apple TV.

You see the only way to watch that billion dollars worth of programming on an actual TV set is via an Apple TV. And because Apple spent the past few years pushing that me-too device, the one that that cost six—count ‘em six!!!—times what its two main competitors were charging, almost no one has an Apple TV these days.

Which means those new Apple TV shows are going to have to be really f’ing amazing to get people to throw out their Rokus and Amazon Fire TVs and spend $180 on a new Apple TV device.

And if reports of Apple creating an “expensive NBC” are any indication, chances are they won't be.

The Streaming Device Wars

According to the most recent report on the streaming device market, Roku has around 37% of the market, Amazon has 28%, with Apple and Google bringing up the rear at 15% and 14% respectively.

Not a good place for Apple to be in, as Roku and Amazon are rapidly making it into a two-horse race.

But wait. It gets worse.

Streaming devices aren’t the only way to watch OTT on an actual television set. There are also smart TVs, which make up sizable segment of the market. (20% to streaming's 36%) And by cleverly striking deals with many of the up-and-coming Chinese manufacturers, Roku now has its interface in around 25% of all smart TVs sold in America.

You know who else is signing deals to have its interface on smart TVs?

Amazon.

You know who isn’t?

Apple.

Which means they’re really kind of screwed.

Especially because they’re coming into the market at the same time as both “Disneyflix” and “Warnerflix”. Both of which will be available  on every device known to humans. And while they may not be free, they’re going to have a whole lot more content on them than Apple. Which is going to make it even harder for Apple to convince people to ditch their Rokus to buy a $179 Apple TV just so they can watch shows on the new Apple TV app.

Apple’s Blind Spot …

Back in the 00s, Apple had a very smart strategy: find a nascent market, come in and offer a beautifully designed, user friendly version of the product and boom! Sales take off.

It worked for iPod and iPhone and even iPad.

But it worked because the competition in those markets was pretty awful—lots of underfunded, engineer-driven companies without a whole lot of consumer love.

But that’s not the case any more.

Apple Music is struggling against Spotify, the Apple HomePod is an afterthought compared to Amazon Alexa and Google Home.

And then there’s the Apple TV.

It may have been first to market, but that was about it.

There’s nothing wrong with it: it’s well designed and easy enough to use.

It’s just that there’s nothing all that right about. Certainly nothing that would justify choosing it over a $29 Roku stick that has an equal-if-not-better interface and more or less identical features. Not to mention hundreds more channel options.

And How To Fix It

Apple’s been in this spot before. Back in the 00s, they realized that the iPod was just way too expensive for a lot of people, and possibly more than they needed.

So they rolled out the (much) lower priced Nano and the even lower priced iPod shuffle too.

Which is exactly what they need to do with Apple TV.

Give people a $29 stick that competes with Roku and Amazon.

Maybe even throw it in for free when you buy a new iPhone, iPad or MacBook.

It might already be too late to win back all that market share, but at least try.

Because nobody, Tim Cook, but nobody, is going to go out and spend $179 just to watch Jennifer Aniston be mean to Reese Witherspoon and vice versa.

Nobody.

Three Asterisks

• It’s possible that all Apple wants is for people to use its TV app as a storefront for buying all those subscriptions (it will presumably get a cut of that) and that’s their game plan—the free shows are just a distraction. If that’s the case, it better be easy for me to transfer those subscriptions to my Roku and they’d better hope that Roku and Amazon (especially Amazon) don’t push back hard. (Like making it impossible to use your subscription bought via Apple on a Roku or Fire TV hard.) We’ll have to see.
• I am aware that it is possible to watch a show off your computer on your TV set using an HDMI cable and (if needed) an adaptor. I did this many times in the pre-Roku days. It’s a major hassle and it's not going to make Apple's TV app happens.
• I am also aware that people watch TV on their smartphones and tablets and laptops. But only sometimes, and mostly, if they're 14, as a way of avoiding their parents. Adults want to watch hour-long shows on an actual TV set. Especially the sorts of shows that Apple seems to have in production.