Apple is reportedly launching a new TV guide to help Apple TV customers navigate content options from multiple providers. Rather than requiring users to open each app to review content options, the guide will provide a single view across multiple providers, according to Recode.
Roku Inc. already offers an integrated search function on its set-tops, but Apple Inc. (Nasdaq: AAPL) will present a menu that allows users to scroll through options, like a TV guide. The move follows from Apple's launch of a single sign-on function on Apple TV announced earlier this year at the WWDC event, which allows users to log on just once to access all the video apps they subscribe to.
On the face of it, it seems like a shrewd move to gain control of the first screen, and thereby the user experience. The guide is the portal to TV programming, and by managing how content is displayed and ranked, Apple could finally gain the influence in the video business it has been seeking since the launch of Apple TV back in 2007.
Just as important, the TV experience then becomes curated and managed by the Apple brand -- which is hugely important as we have seen with the development of apps for mobile phones. The market also needs some kind of consolidation; OTT options are proliferating and some kind of aggregated service will become increasingly important in time. (See Growth of Netflix Competitors Could be Positive for Pay-TV Providers.)
And Apple already has many of the required parts: its digital assistant Siri already offers search and navigation and includes metadata for programs, while its recent acquisition of artificial intelligence (AI) startup Turi could help improve consumer profiling and content recommendations. (See Apple Buys AI Startup Turi for $200M – Report.)
However, pay-TV providers are likely to recognize the potential for subverting their relationship with their subscribers, and so will OTT providers such as Home Box Office Inc. (HBO) and
Netflix Inc. (Nasdaq: NFLX). They want customers to be cocooned in their app, where only their content is available. The last thing an HBO would want is for a Game of Thrones viewer to go off and find a similar show from another provider which they then get addicted to. And that's equally true of Comcast Corp. (Nasdaq: CMCSA, CMCSK) and other pay-TV providers, whose entire business is built on aggregating and packaging content, and who have invested substantially in helping viewers navigate it.
Apple's muted impact in the TV/video sector to date may ironically be a result of its success in other sectors. The company is used to being the industry heavyweight that makes demands and gets what it wants. But the TV business truly is different and more complex, and Apple's uncompromising approach can damage its prospects. Its efforts last year to launch a $30 slim TV streaming service failed at least in part because of its belligerent approach, according to a report in the Wall Street Journal.
Meanwhile, slim TV services from Sony Corp. (NYSE: SNE), Comcast, Dish Network LLC (Nasdaq: DISH), CenturyLink Inc. (NYSE: CTL) and AT&T Inc. (NYSE: T) are all out today, or on their way. While they are probably less disruptive than Apple's plans, they are at least a reality. (See Will the 'Slim' TV Business Model Really Retain Cord-Cutters?)
Apple re-invented the music business, but doing the same with video is more difficult. The music industry had a comparatively simple retail sales business model for the most part, while TV offers a bewildering array of pricing and packaging options built around second-run syndication, release windows and pay-TV service tiers. It also includes distinct industries that are only loosely integrated into one. Movie studios, TV broadcasters, pay-TV providers, advertisers and agencies, and now OTT providers -- each have very different cultural orientations, financial priorities and revenue models.
Plus, the music industry was disrupted faster, while TV has had time to adjust and adapt to the web by launching multiscreen services and creating new digital applications like VoD and DVRs. Circumstances are just not as dire for the TV business today.
There is a clear benefit to viewers from being able to access content more easily, and Apple's guide will likely get an enthusiastic response from smaller content providers. But the larger players may see it as an attempt to subvert their relationship with their customers. Thus, until Apple takes their business needs into account, each new TV strategy may well end up where its last one did.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation