Challenging Apple’s call for the appification of TV

Guest post originally published on the Canadian Media Fund’s Trends blog

Apple laid its cards on the table during its latest product launch event by proclaiming that “the future of TV is apps”. Frédéric Guarino, VP of Business Development at Mediabiz International, challenges such an assumption. The tech giant, he believes, could have played its hand better.

Expectations were sky-high for Apple’s September 9 event, particularly for the launch of its new Apple TV, rumored to be one of the “stars” of the show. Apple events are always preceded by forecasts of varying accuracy in the tech and mainstream media.

Steve Jobs had famously called Apple TV a “hobby” and, in Walter Isaacson’s authoritative biography, was quoted as stating: “It will have the simplest user interface you could imagine. I finally cracked it.” As the revamped Apple TV was unveiled on the stage of the Bill Graham Center, Tim Cook and his team certainly stayed true to Jobs’ message of simplicity, but Apple TV 2015 is still not a revolution.

The Sept. 9 event could not upend the one that took place last spring, which was a real step towards cable unbundling, as there was nothing to match the exclusivity deal with HBO Now. It serves to illustrate the difficulty Apple keeps facing in its negotiations with rights holders, namely the powerful Hollywood studios. Instead of exciting content announcements, we get a form factor evolution with a very compelling Siri integration.

The two key takeaways from this event are the deep integration of Siri and the launch of tvOS. tvOS is meant to be Apple’s way to iPhone-ize television by encouraging its appification. On the content side, the new Apple TV is not yet the Rubicon crossing into either the Apple-style “skinny bundle” or the original content that was rumored.

To frame the announcement and further push the envelope, Tim Cook boldly proclaimed that “the future of TV is apps.” Before challenging this statement, let’s look at the positive additions to Apple TV 2015, the 4th generation since 2007.

Hands-free Siri doesn’t solve information overload

The choice to embed Siri to power discovery and search is very astute. Using voice as an input in lieu of the current (very) clunky on-screen keyboard is sure to spark interest in consumers who haven’t bought an OTT device yet. In addition, the ability to search via deep links across iTunes, Netflix, Hulu et al by using voice commands is a very attractive feature, despite its limitations.

The challenge to Cook’s maxim that the future of TV is apps lies in a fundamental feature that many TV viewers seem to crave: the ability to passively consume content, that is, to enjoy a lean back experience. Inviting studios and content producers to develop apps in the new tvOS and, in essence, further breaking the bundling of networks and ultimately of shows within those networks raises content discovery issues.

Do we really need an app for every TV show? As Jim Nail, a principal analyst at Forrester Research, explained in Wired: “One immutable part of the human experience is that, as long as we all have to work 40, 50, 60 hours a week, we’re going to come home at night and just want to veg out. The real potential for set-top boxes is to solve channel-flipping — to know what you want to watch before you do.”

Does Siri solve channel flipping in the OTT universe by using voice? Not in its present form, since it forces the viewer to be in search mode, not in a passive mode. For all the talks of revolutionizing TV, watching the small screen is still overwhelmingly a lean back experience where viewers want simplicity, curation and a form of channel flipping.

Asking Siri for the entire collection of Ryan Gosling films or the specific episode where Seinfeld’s Kramer stuffs the Japanese tourists in drawers will satisfy a fraction of the viewing public, but not the majority. As pointed out by a fed-up Netflix user: “I could have watched an entire TV episode in the time it took to look for something decent to watch on Netflix.” The paradox of choicepopularized by psychologist Barry Schwartz remains a real phenomenon for a growing number of overwhelmed users.

Asserting that “the future of TV is apps” can in fact be viewed as a demonstration of Apple being in a position of weakness. The tech giant is far from enjoying the same position it has in the music industry when it comes to negotiating with the guardians of film & TV content, such as the major studios. These studios, which have proven to be a testament to resilience for maintaining their gatekeeper roles through endless mergers and reorganizations, are calling Apple’s bluff for the moment and not giving it the keys to the content castle.

Apple’s call for the appification of TV remains a smokescreen until it’s ready to be serious and dive into the original content business. The landscape could shift if Apple either strikes a deal or goes all out and acquires a cable company, one of the challengers to market leaders Comcast and Charter-TimeWarnerCable. Acquiring a cable company’s DNA could potentially help Apple in its tough negotiations with the Hollywood studios.

NYC-based Cablevision would be an interesting option for both these deal structures¹, especially as it was the first cable company to offer HBO Now as a standalone service. Not to dwell on a possible alternate history, but Steve Jobs’ special relationship with Disney via his Pixar connection could have been the trump card Apple needed to achieve its quest of the living room in regards to content.

Apple’s trump card: 800 million credit cards

Interestingly, the Apple team didn’t acknowledge nor tout their not-so-secret weapon with regards to Apple TV and tvOS, one that other consumer electronic brands would “kill for”: the 800 million credit cards attached to the Apple ecosystem.

In the current mediaquake where the landscape is being redefined at breakneck speed, telecoms and cable/satellite carriers, often one and the same, work overtime to get consumers addicted to broadband data plans. The carriers currently have the upper hand, largely because of their ability to bill consumers on a recurring monthly basis and, therefore, their “ownership” of the direct relationship. Apple is more than a worthy competitor in this game and its billing capacity easily explains the decision to open tvOS to gaming.

In conclusion, Apple TV 2015, the 4th generation of the OTT device, adds worthwhile features such as Siri-powered voice search and a new remote. Nevertheless, the focalization on apps entails further balkanization and atomization of the content choices, vs a clean, holistic experience. The Siri-ization of Apple TV certainly enhances its cool factor, but doesn’t address the elephant in the room: many viewers want the lean back option when watching TV.

But stay tuned: Apple’s recent hire of artificial intelligence experts could bring about the revolution we’re still waiting for.

1. This article was written before we learned Altice agreed to buy Cablevision in a deal worth $17.7-billion (U.S.).

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