Does Apple Really Want To Be Like Netflix?
Steve Jobs had apparently figured out the living room before he passed away. I am not exactly sure what that means. I'm pretty confident that it means he settled on the proper approach from key standpoints, ranging from utility to design to integration to marketing. But, I am not sure he was able to figure out the content conundrum. This is what makes iTV such a major gamble.
Even if Apple sells as many iTVs as it does Macs (just over 4 million this past quarter), it will not achieve the critical mass necessary for content owners to do what it wants. And, again, without knowing exactly what Jobs figured out, it's tough to determine exactly what Apple wants.
It appears, however, that the company wants to bring wholesale revolution to yet another industry. Historically, I'm not one to question Apple. After watching Steve Jobs steamroll through the music business, I have no doubt that Apple will send sectors such as education and eBooks for a loop. That process is already under way. But two things make the effort to reshape the way we watch "television" an uphill and potentially impossible climb.
Unless iTV grabs massive market share -- and fast -- content owners have no incentive whatsoever to get on board. Apple will be stuck with the same nonexclusive scraps Netflix and others have to settle for. The only way Apple obtains top-notch premium programming (and enough of it to put together a complete offering) is to pay exorbitant amounts of money for it. But it does not stop there. The content owners will demand that Apple charge viewers a premium to access that content through iTV. Just browse through the iTunes store. To put together a wide-ranging slate of television and movie viewing going that route would eat up a middle-class salary overnight.
To provide a full-scale selection of quality programming via iTV, Apple effectively must become a cable provider. I highly doubt it wants to enter that space. If it does, look for the decline to happen sooner rather than later.
So, again, Apple is not this dumb. There must be more to the story. There has to be. Steve Jobs had other ideas; things you and I never could have imagined. This leads into obstacle number two -- Steve Jobs no longer walks the Earth. He no longer walks into boardrooms and gets what he wants, how he wants it and when he wants it. He cannot twist arms and proceed to execute and market what he gets to perfection. That's up to the people he left behind.