Original URL: http://www.theregister.co.uk/2006/03/09/apple_tv/

Apple TV: wait and sue

Why bother with work?

By Ashlee Vance

Posted in Media, 9th March 2006 21:41 GMT

Analysis For worse, the online media market continues to fracture into the haves and the have nots - those that have partnered with Apple and those that have not.

Media companies baffling the public with their ineptitude is nothing new. Apple had to drag the labels kicking and screaming to iTunes. Now, Apple has had to show the mogul crowd how to do a subscription service right by this week offering a discount on TV shows (The Daily Show and The Colbert Report) and letting consumers keep their programs. Why Napster, Real and the RIAA think making music disappear at the end of an expensive subscription will prove attractive is anyone's guess.

With that in mind, the media giants who have partnered with Apple - particularly for TV downloads - must thank God that Steve Jobs exists.

The pigopolists would never figure this stuff out on their own. They would never have agreed to meet in one place - iTunes - without the charismatic Jobs showing them the way. Companies like ABC and NBC would have taken years to push their TV shows onto the interweb at a somewhat sensible price.

And it's not like Apple does all that fantastic job of the media delivery in the first place. Apple refuses to open iTunes content to cheaper, non-iPod portable music players. In addition, it hasn't bothered to set up a proper channel for the TV shows, opting instead for a wee link on its Music Store. The format of the TV sales site itself pretty much sucks as you have to fight with iTunes to get descriptions of individual episodes. And, we reckon, the prices for the shows - $1.99 - are a bit high given that the regular, old advertising model on the tube delivers just a few cents per person in revenue to the networks. Why not cut us a break and cut the price down to $1.00 per episode? Have a heart.

Such gripes, however, remain trivial when you look at what the competition has to offer.

CBS, for example, made the mistake of partnering with Google. To this day, you can only buy two episodes of CSI - the most popular show on TV - from Google. You can buy zero episodes of CSI from CBS.

Beyond that, the Google Video Store looks like it was designed by a hemorrhaging five-year-old with a predilection for the small box of crayons and bad code.

While CBS executives scratch their bums wondering why they believed that rocking BusinessWeek story about Google, Apple has teamed with Comedy Central to sell episodes of The Daily Show and The Colbert Report as part of a discounted, quasi-subscription package.

The day the bundled cable died

We'll all look back on this deal as the day that TV delivery changed in earnest.

Apple has managed to repeat its tradition not of discovering something new but of doing something obvious first.

Plenty of MP3s players existed before the iPod. Apple just made the obvious better design and the obvious better store and backed it up with the obvious better marketing. That's not to say this is easy. It's just obvious.

Similarly, pushing TV via the internet isn't a new idea. Doing it well is an obvious path to a promising business.

Apple receives great praise for moving at a turtle's pace when the rest of the industry moves at a crippled turtle's pace.

Beyond adding some real glamour to the downloadable TV show market, the Daily Show show deal spells the beginning of the end of bundled cable. We're not going to go BusinessWeek on you and suggest that Apple will somehow undermine decades of TV development overnight. Not at all.

Consumers, however, will grow more and more loathe of the idea behind bundled cable as a result of Apple's work. The subscription price for The Daily Show - $9.99 for 16 episodes - still seems high. But you can imagine a day when you pick, say, 10 TV shows for that price. Apple downloads them for you, burns them to a DVD and off you go.

TV networks could make these packages more attractive by selling longer, commercial-free versions of the shows.

To compete well in the next five or so years, on-demand cable must go a similar route and free up its programming.

If not, it seems Apple will saunter into the TV market and become a major, major player. For unexplained reasons, no one seems to want to do this kind of work themselves. They'd rather let Jobs own them and then bitch about it.

Flounder first, sue later. That, after all, is the Hollywood way.

We imagine that a couple of up-starts will rise and give Apple a real challenge at their own game. That tends to be the way technology-heavy markets operate. Such variety should be welcomed.

If this doesn't happen, the media companies will only have themselves to blame for allowing Apple to control their TV shows as well as their music. Don't depend on a company as woefully inept as Google. Create a joint venture capital arm to develop independent media warehouses. Invent something great and give it away via open source. Do something. Do anything. Just don't whine about your own ineptitude. We've grown so very tired of that.®