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TV market poses new challenges to Apple TV

Posted: 08 Sep 2015     Print Version  Bookmark and Share


2. Is exclusive content a game changer?

There has been plenty of speculation that Apple will launch exclusive partnerships with content owners or release original content for Apple TV. Will this be a game changer?

IHS analyst Kingston said, "There's a presumption in the industry that, upon its eventual announcement, a pay TV bundle exclusive to the Apple TV will amplify the device's appeal in unprecedented ways."

Some evidence suggests that Apple's has held discussions with TV networks. The word is that Apple wants to launch a $40/month plan for Apple TV users that allows customers to get their favourite channels without the need of a cable connection. The content would be streamed from the web and integrated with iTunes on the new Apple TV, as 9-to-5mac reported. But the same website is now saying that "it appears that the new TV service won't launch until at least next year."

So, this does not seem to be happening. Why not?

Kingston said, "Content is critical, but in my view, the exclusivity ship has already sailed." He noted, "If you're a member of the cord-never generation, and are looking for a pay-TV-lite bundle offered through a connected device, you already have a choice between Roku (Dish TV) and the PlayStation (Sony's Vue). In other words, in what remains Apple's key launch market, the US, the Apple TV would merely become the 3rd such avenue for next-gen, 'skinny' pay TV services."


Apple earlier this year rolled out HBO NOW, a standalone streaming service for Apple TV designed to be exclusive to Apple at launch for three months. Although the service was deemed as a huge coup then, the consensus today is that it has not helped much to sell more Apple TV.

3. What must Apple offer in new Apple TV?

If an exclusive content package won't do it, what must Apple offer in new Apple TV to prompt consumers to buy into that?

Rick Doherty, research director at Envisioneering Group, posed his wish list for a new TV box such as Apple TV: "Seamless Internet, broadcast, cable, satellite, stored home media access." In other words, consumers don't care where content resides, but the box, regardless of its specific contract with service providers, should allow consumers to navigate.

Doherty also added the importance of resolution and the ability of the box to "enhance picture quality." Last but not least, the box should "learn by watching my preferences instead of wanting me to click through options."

Kingston reiterated his position that this is about the race on the DMA space, not about 'TV' as such. What matters is not about disrupting the underlying structure of the media market. The focus has to be on an external device to secure as large a footprint in the living space as possible, he noted.

Installed base of digital media adapters

Installed base of digital media adapters (Source: IHS Technology)

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