Roll Your Own TV Schedule: Apple’s Big Chance

by Chris Seibold Feb 02, 2006

As all but the most die-hard Mac fans will admit, the OS war between Apple and Microsoft is over. The truth is that Apple was routed so badly that the so called war was more like a sit-in staged by middle schoolers to protest the loss of tater tot Tuesday. And the middle schoolers who quit when the recess bell rang. You can blame Apple as much as Microsoft for their pathetic showing. For every slick move Bill Gates made, Apple made two steps every bit as clumsy as the moment Frankenstein stepped off the table. In short, Apple managed to screw up every chance they had to gain significant market share….so far.

While the desktop war may be over, while Microsoft may stand atop the hill, perhaps the larger computing war isn’t quite done. A hard fought battle has been going on for years, and this is the race for the living room. While a contest usually requires at least two opposing foes to go at it, the war for a space in your living room has just been Microsoft versus the reluctance of people to cram a Windows Media PC next to their TV. Reluctance, by the way, is kicking the holy hell out of Microsoft.

Before examining why Microsoft is getting so thoroughly trounced by apathy, a look at Microsoft attempts to get into the living room is in order. Microsoft’s first attempt to put their products into your TV viewing area was their acquisition of WebTV. You remember WebTV, a service designed to give you all the goodness of e-mail and the internet without requiring you to buy a computer. What seemed like a can’t fail idea soon became a can’t win. Consumers who signed up for WebTV quickly decided they wanted to experience the web completely, so they cancelled WebTV and went out and bought a full fledged PC.

Microsoft, in a somewhat bizarre move, also jumped into MSNBC. Half Microsoft and Half NBC added up to no real difference, the channel quickly became just another outlet for news. The Microsoft part of the equation, and whatever Microsoft hoped to gain by being part of a TV channel were quickly gone. In the early days there were undoubtedly plans to closely integrate the content with the internet, in the end Microsoft sold its stake to NBC. Hey, they tried.

Microsoft is nothing if not persistent. In yet another attempt to gain unfettered living room access the giant rolled out Windows Media Center. The idea being that with the software, and properly configured hardware, people could take their television addiction to an entire new level of stuporous escapism. WMC ran into a problem, the vast majority of people think that their TV experience is already “good enough.” Consumers know there is something better out there, a more automated way to do all the stuff they do with a TV, but they aren’t so fixated on incremental viewing improvements that they will go to all the expense and trouble of hooking up what they see as an already over complicated computer between the wall and the TV.

But, some will surely argue, if Apple converted a Mac mini into a computer/PVR things would be different. Why, coupling the ease of use of OS X with the mini form factor would surely result in massive sales! Nice pipe dream. Offering people a slightly simplified version of something they already don’t want is a lot like offering half a glass of milk instead of full glass to someone who is lactose intolerant, the answer will still be “no thank you.” Those that do desire something more are satisfied with the humble TiVo or the generic PVRs offered by the service providers.

It is obvious that key for this market isn’t making the PVR functionality slicker or the computer less obvious, the key is realizing that unless the computer in the living room results in something demonstrably better than the current system people aren’t going to jump on the band wagon. For example, if all cable offered was a superior picture to air broadcasts analysts would still be wondering why cable never took off (just as some folks are wondering why Hi Def hasn’t taken off like a rocket). Of course, cable did take off, not because of a superior picture but due to expanded content.

With that lesson in mind it is clear that the way to get around people’s natural reluctance to cram another bit of complexity between themselves and the television is not to make TV watching better but to give them a reason to use their TV to watch something other than current television offerings. Anyone who wants to can, using a VCR or a TiVO, time shift a show. Which is a great boon to the sports addicted who work on Sundays. Much harder is hearing about a great show at work and then having to wait until reruns to actually watch said marvel of entertainment.

The previous example omits an increasing amount of internet only content. Old shows, internet shorts, foreign television etc. They all add up to things you can’t get via the cable company and they all empower you to be your own station programmer instead of sitting through the dreck the TV traditionally spews out. When enough content becomes available, when you can move non TV content to your television, people will be motivated to put something in their living room. At this point, the company best positioned to deliver non-traditional video content that you want to watch on your TV is Apple.

Apple has a chance, with the right mix of hardware, software and delivery services to make people want to cram a Mac in their living room. Surprisingly, any successful effort will hinge not on openness but on vertical integration. Roll your own mainstream schedule with the offerings from the increasingly misnamed iTunes store. Mix in some format compatible internet only broadcasts, add an easy rip and store method for your DVDs and customers will be doing with video what they now do with audio thanks to the iPod. That might be enough to get people to finally cram another box in their living room and, if it is, Apple fans can finally declare a market share victory for Macs.

Comments

  • Nice article, Chris. I somehow doubt the DVD storing functionality though, unless it employed some DRM. And HDD space it still too expensive to cover both an extensive CD AND DVD collection, but we’re getting there. The cool thing about doing all this in the Mac mini formfactor is that you can just stack up another HDD in a matching external case and it will not look crummy.

    Bad Beaver had this to say on Feb 02, 2006 Posts: 371
  • Thanks double B. I suspect, that if Apple evers really gets going in this direcction, you’ll see DRM aplenty. I think a quicktime codec will supposedly alleviate some of the storage issues but you’re right, any decent sized DVD collecction would soon outstrip capacity.

    Chris Seibold had this to say on Feb 02, 2006 Posts: 354
  • Chris, ether you missed the big picture or you didn’t express it very well. If we can get to downloadable content as a replacement for TV broadcasting why would anyone ever purchase a DVD again? and would Cable still be necessary. That is where the iTMS ultimately ends up, as a replacement for cable. 

    There is still work to be done. Like getting the rest of the content from ABC and NBC and signing CBS but that is all doable and that in and of it’s self will not be enough. For this to work, it has to enter HD.

    Lets say that tomorrow Apple put the entire Pixar library on the iTMS in 720p for $25 or 1080p for $30. At the same time they announce a new mac mini based on the single core version of the new intel chip that can decode this information (also we will assume they make the mini just enough bigger that it can hold a 3.5” HD to reduce cost and increase storage).

    Apple could scoop the industry on HD content delivery. Immediately start offering back episodes from their current partners in HD and they could start to define the industry.

    iTunes and the iPod worked because Apple had direct control of content. Until Apple has some control over the content, ether through iTMS or by signing deals with DirecTV and cable providers they can not make a competitive product to TiVo and the current crop of PVR’s. But if they are given access to the raw Digital information all bets are off. It is just my feeling that nobody is going to give them access so they need to simply take it.

    Doug Petrosky had this to say on Feb 02, 2006 Posts: 26
  • Nice article Chris, I don’t think I can be a critic on this one. Although some of the posts mention larger hard drive and doing away with DVD’s I personally don’t think its going to happen anytime real soon (years). People who purchase movies at local retailer will continue to buy them and not rent or buy from cable companies or places such a iTunes store. Why ? I fail to make a connection with it, but my wife and kids are big movie buffs, they will watch the same movie so many times the scripts are imbedded in thier heads. Alot of people are like that with music and video so you can count on retailers to stay in business. In addition when they want to see a particular movie or take it some where its on hand. Until hard disk space pricing comes to an all time low and extremely portable you will always have collectors of music/video media. I personally would like to see the mini sitting under the tube. At the cost of the mini and the versatility, it beats buying DVD and/or VHS machines. No doubt Apple will be in alot of livingrooms in the future, and I feel Microsoft is a lost cause in this area. (by the way, maybe people should have seen Bill Gate keynote with Mr. O’Brien, Mobile media failed to perform with pictures, can’t believe no one put an article out on that yet). One way or the other the cable company is here to stay, even though TV may lose market share they still have the ultimate broadband solution.

    Macster2 had this to say on Feb 02, 2006 Posts: 40
  • Macster
    Just to clarify. When you purchase a show from the iTMS you own it, just like a DVD so you can watch it over and over again. The only difference is how it gets to your home. Now don’t get me wrong, I’m not predicting the Death of DVD next week, hell if they don’t do something to increase quality the iTMS doesn’t have a chance in that market. But just like the iTMS is replacing CD purchases for some people, it also has that possibility in the TV/Movie market.

    The threat to Cable takes a bit more doing. At $2 per show, you would probably spend more for less content at least in the short term. This means that ether a rental price needs to be created or the purchase price needs to drop somewhat. (but not a lot)

    Here is my math on the subject. My wife and I sat down with TiVo to see how many new shows we watch each week (this excludes re-runs, sports and news). Our calculation came up with about 12. Times 25 episodes/season * $2 and you come up with about $600/year or $50/month which oddly is about what we pay now for TV. Now if they make it so that I can buy seasons for a discount like I can buy old seasons that price drops to about $420/year or allows me to purchase an additional 90-120 shows each year.

    Ok, so I’m paying more to get commercial free video but remember that that video can be played on 5 different systems. So lets say I need to use 2-3 and I can find 2 friends who want to share in this process. Now instead of only my 12-16 new season shows a year I have the potential for around 40. The economics work as long as the content exists. (which it doesn’t yet).

    I was just pointing out that one place Apple could gain some fast ground is in the HD arena. As Blue Ray and HD DVD battle it out, how funny would it be for Apple and Disney to beat them to market with a solution? Just something to think about.

    Doug Petrosky had this to say on Feb 02, 2006 Posts: 26
  • Yes. I fail to get interested in the next generation format war for this reason (and also because the two offer very little in terms of difference for the user in any case)...

    Benji had this to say on Feb 02, 2006 Posts: 927
  • Though on the other hand, there’s nothing like owning an ‘actual copy’ of something, is there? I mean, people rip their dvds to disc, but they don’t then throw out their beautifully arrranged collection of physical disks.

    This post should be noted in related to the digitisation/internetisation/itunesisation of all media property.

    Benji had this to say on Feb 02, 2006 Posts: 927
  • Interesting article. Especially the point that Apple can’t just do what Microsoft is doing but better - the interest simply isn’t there. Every time I’ve heard the Apple PVR rumours I’ve been surprised that people assume it’ll be the MacMini with TV/PVR extensions.

    You said:
    “It is obvious that key for this market isn’t making the PVR functionality slicker or the computer less obvious, the key is realizing that unless the computer in the living room results in something demonstrably better than the current system people aren’t going to jump on the band wagon. “

    Okay, so right now we have people buying PVRs. But they’re not buying PVR-Computers because they’re simply not much better (and they cost more!). So as you say, Apple can provide downloads and TV-on-demand to stand out.

    But I think this misses other options. There are 3 levels of possibilities Apple could provide.

    1) 6 months ago Apple added video to the iPod for the same price as the audio model. They could do something similar for the Airport Express. Sure it’ll only play your music (from your Mac OR PC), AND any video you bought from the iTMS (plus your slideshows).  The best option would be to place that tiny white Airport box next to your VCR and give it an IR remote and FrontRow interface.
    Very cheap. Lower quality (iTMS quality). Gets some new customers.

    2) A PVR that is NOT a computer. Large hard disk, TV tuner, ATI x1600 graphics chip (overkill? HD?), minimal processor. Record and playback stuff from TV, AND download from the iTMS (and play music from your computers, and slideshows/movies, etc).
    Quality PVR price, high quality, iTMS integration. Also integrates with macs or PCs.

    3) A MacMini, plus large hard disk, TV tuner, ATI x1600 graphics, core solo CPU. Same functionality as #2 but is also a computer.

    I guess it’s possible that #3 would cost so little more than #2 that it’s just not worth it.

    Greg Alexander had this to say on Feb 02, 2006 Posts: 228
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