Apple News, Analysis and Podcasts

Rumors have been swirling that Apple TV will soon become iTV. Ironic isn't it, since iTV was the code name for Apple TV before it launched.

Whatever new name Apple TV receives, it seems Apple is about to deliver a new TV paradigm. Some people (like myself) have wanted this transformation for years, while most of the population will just fall in love with the business model once it is introduced. Apple could sell over 10 million of these new iTV devices in it's first 12 months in the US market, causing all kinds of cable and dish provider turmoil.  So what is this new iTV mechanism that will set the market ablaze? A la carte subscription services delivering only the networks of your choice. Pay per network, not "forced" provider bundles.

But can Apple get a few key networks onboard to kick off an iTV revolution? Yes.

ABC: Steve Jobs simply pulls the lever to get the green light.

CBS: Yes. CBS is the odd-man out in flnding a play against Hulu and it's network rivals who are in control. Most every internet effort of CBS has failed, but partnering with Apple would make a strong play.

Others: TNT, NFL network, Discovery networks (Animal Planet, Discovery Channel, TLC, etc...) and other networks would likely enter the game quickly.

But can this make the networks more money vs their current provider contracts? Yes. Enter iAds.

The dollar figure for each subscriber is what networks receive today from the providers, but Apple can sweeten the deal by delivering another highly profitable revenue stream via iAd. 

The users TV experience is also going to change dramatically. Need I say revolution? Imagine watching a NFL game on ESPN, but instead of the typical car ad, it's just a shiny spinning Nissan logo with a black background. That's the ad. You grab the iTV remote, point it on the Nissan logo and click (yes, that's the kind of Wii-like remote the iTV will come with). Presto, the Nissan iAd takes you into an interactive ad on steroids. You finish the ad and you are back to the football game as if it joined the broadcast at exactly the right moment. But how did it do that? After all, you spent 4 or 5 minutes in the Nissan ad signing up to win a Nissan leaf and playing a game?... Surely the live broadcast started without you, right? It did. But iTV does real-time DVR-ing with it's 8GB of solid-state storage onboard, so for you the user it's all seamless, and you can catch up as you want, or just enjoy the game seamlessly lined up with your iAd viewing behavior. What if you don't click on the Nissan ad? That's okay, it may then default into a simple TV-like ad for 15 seconds or so, and move onto the next iAd, or standard, and lame, 30 second spot.

Sure, networks make money selling ad spots, but networks stand to make a bundle-o-more-cash with iAds than with traditional advertising. Time spent in the app, what was popular in the ad, what was not, people signing up for contests, it's virtually limitless the amount of data that can be gleaned off these interactive iAds, and that information is worth money, a lot money. Both Apple and the networks stand to clean up with an iTV, iAd revolution.

 iOS being the foundation, games will quickly port to iTV, along with iAds running in all those free games.  Here we see Apple again deliveriong developers another iOS platform in which to up-sell their customers and enter a new market space with their products.

 One slight obstacle. Once iTV starts to take off, cable providers will need to counter, and their likely play is to simply raise non-bundled internet access prices and/or start delivering caps on internet bandwidth, or both. How does Apple compete? Simple. In a year or two, Apple should have roughly $60+ billion in cash, and can buy out Comcast, setting the market on fire as to where internet pricing should stand.

 A la carte network choice. No need for a cable or dish companies TV bundles. iAds with interactive TV commercials. iOS with gaming (with Apple's game network fully deployed). A revolution indeed.

1 Comment

1. Stephen ~ August 24, 2010 05:04
   I have the original Apple TV and would spend as much as my comcast bill on downloads if there were better content available at better pricing. TV series are just too expensive right now. It would be nice to not have to see Hulu ads every 2 minutes. Also, we need live sports. Live football, golf, and tennis. Go iTV!

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