Apple TV’s so so content depends on ecosystem integration for success

by Steve Blum • , ,

Apple tv keynote aniston witherspoon 25mar2019

Apple unveiled a new subscription video service last week. If it were any other company except Apple making the announcement, there would have been a huge yawn from the market. The Apple TV service, at least what we know of it, isn’t significantly different from other over-the-top services. They’re borrowing business model bits from several different platforms and putting the pieces together a little differently and, but overall it looks very familiar.

Apple will have exclusive programming, as the big OTT players do, and that will help it position its video brand as it has for HBO and Netflix, but it’s just icing on the same cake as everyone else’s.

What makes it different is the Apple branding, and Apple’s ability to leverage its existing customer relationships and its hardware/software ecosystem. It’s a fair question whether that’s going to be enough to make it stand out in the TV business, but it’s a unique advantage and Apple is smart to use it like this. The future growth of the company will have to come from services. Apple’s hardware and software lines aren’t hurting, but the market is maturing and whatever growth comes its way will be incremental.

The move into video by Apple – and others – and is a lot like the early days of digital satellite TV in the mid–90s. There was some programming that was unique to particular platforms – such as DirecTv’s NFL package – but for the most part programming line-ups were identical. What distinguished them was 1. bundling – DISH, for example, focused on low-cost packages – and 2. distribution – DirecTv and U.S. Satellite Broadcasting (my company) were launched via RCA’s then-formidable consumer electronics retail channel.

Apple brings customer relationships and system (and revenue) integration to the table. Netflix, Roku, Hulu and the rest built subscriber bases, but do not play in the consumer technology space. The question is whether Apple’s advantages amount to a unique selling proposition that’s meaningful to consumers. If Apple TV creates the same kind of seamless user experience that iPhones and Macs deliver – seamless technically, operationally and transactionally – then it has a shot. If it can’t, it’ll be just another OTT service.