BTIG’s Rich Greenfield is one of the few media analysts who also seems to use and critique just about every video gadget that’s ever been made. So people who are betting that Apple is about to make huge profits from a TV set that will revolutionize consumers’ relationship with the tube should pay attention to his warning this morning: It “will take longer to come to fruition than investors are likely expecting.” His view jibes with that of his BTIG colleague, Walt Piecyk, who on Monday downgraded Apple to “neutral,” in part because of his conclusion that ”no Apple TV will be released this year.” The belief that Apple is about to upend the TV market, just as it has done with music and phones, spread last year. Steve Jobs’ biographer Walter Isaacson quoted the late CEO saying that he finally “cracked” a way to make the viewing process simple and elegant. Greenfield agrees that there’s an opportunity for someone to do just that. The user interfaces and remote controls from TV manufacturers and pay TV companies “are horrible – they are the polar opposite of intuitive and they certainly don’t ‘just work’,” the analyst says.
But the media ecosystem is “quite complex and requires a lot of agreements between parties that are still trying to figure out if they are friends or enemies or somewhere in between.” His advice to Apple: Start off by developing a device for satellite companies DirecTV and Dish Network that would redesign the look and feel of the viewing experience. That would “provide national reach” and pressure cable companies to play ball. “Once a consumer upgrades their living room TV, they are going to want to replicate that experience on other TVs throughout their home” — opening the way for Apple to sell its own TV set — Greenfield says. He even envisions a way for Apple to offer a rival pay TV service via the Internet. “If Apple is willing to take all the content (meaning no cherry picking the best channels) from each content owner at a premium price (figure $40+ per sub/month compared to Comcast’s rate of around $30/sub/month), we believe a significant number of programmers would agree to license programming” to Apple, he says.


So Apple should just do what’s already being done?
The title should read:
“Don’t Hold Your Breath Waiting for the Content Companies to Change Their Archaic Business Models and Recognize the Revolutionary Opportunity Apple Could Bring to Innovation in the Living Room”
too on the nose?
That’s what she said…
How is Apple TV innovative when there are already several internet-ready televisions out there that allow you access to a large number of services to get online entertainment. Would it be innovative because you could only access iTunes and maybe Netflix?
Too on the nose?
It’s all about Apple seeing a market opportunity to become the new, brand-name content aggregator on the block. The reason that traditional content aggregators got into the content business in the first place is to protect a changing business model with increased competition in the wireless space (ie. Comcast buying NBC/Universal, Netflix deciding it wants to produce it’s own series). Traditional cable and satellite are going the way of the buggy whip. Will it happen overnight? No, of course not. But when is the last time you bought a CD or DVD? Forget bought – when is the last time you USED a CD or DVD? The new kid is bandwidth – Verizon / AT&T will be the airwaves of entertainment into the living room, and Apple will be the store.
Speculating further, I don’t think content will necessarily be consumed under a pay-one-price business model (if history is any indicator). Your favorite TV show or sports team will be an app. You will be able to purchase single episodes / games or entire seasons using a deductible account (ie. micropayments) that will still be subsidized by advertising. Will the traditional providers fight tooth and nail to stay relevant? Of course. Does that mean they will penalize Apple by holding back their premium, proprietary content? Probably. But once a few dominos fall, and the trend shifts, the wild west will be won.