This post from @kevinrose (founder of Digg.com ) suggests television will never be the same after Apple launches its rumoured $99 set-top box. From a consumer POV, this device or the new Google TV may check all of the boxes for those people who want to cut their TV cable cord (see my earlier blog post about my experiences without cable) but a game changer? Read the comments on his blog to get a glimpse of the doubters, and here are some further considerations I’d like to hear more opinions on:
- Programming costs a lot of money to make. $100K per half hour is considered cheap. After Apple gets it cut, how many episode purchases from consumers will need to be made in order for the producer to break even, and who will fight for the international programming distribution rights?
- Broadly speaking, successful television programming in Canada is made with funds provided by the government and cable companies, who are mandated to reinvest some dollars into the local industry. To get access to this funding, a broadcaster also needs to invest in the TV program. The broadcaster makes its money for content from advertising dollars. Like it or not, reducing the power and influence of cable companies such as Rogers, Bell, Shaw, etc., as well as the broadcaster and the advertisers will greatly diminish the funding available to television producers to create new products for both linear TV and online (unless, of course, Apple and Google are mandated to invest in local programming and are considered by the CRTC as ‘cable company’).
- Broadcasters want to be in this multi-screened space and are investing additional financial and people resources to make it happen. Given the extra resources it takes to put broadcasted episodes on third party content aggregators such as Apple, profit (if any) is invested back into making this content available on digital media. The industry might be willing to play with AppleTV and GoogleTV if that’s what consumers want, but in the end, each broadcaster and cable company would rather create their own walled garden for maximum return on investment.
- This tweet from Modern Family creator, Steve Levitan (@stevelevitan) brings up a good point. It’s not only broadcasters and cable companies who want a return on their investment.
It’s about choice. If anything, Apple TV and GoogleTV will help offer new choice to the user, but will it actually change the industry forever?
What do you think? Will the cable industry crumble when these devices launch, or are there other examples pointing to why Apple TV will be just another player in the marketplace?