David Pogue’s review in today’s New York Times of new internet TV gadgets from Apple and Roku was right about one thing: it’s early days for Internet TV. Otherwise, this was a particularly egregious example of PogueWorld.
In PogueWorld, closed proprietary systems are evil, unless they are Apple’s. Movie studios are evil because (among other reasons) they don’t give Apple everything it wants in negotiations, they have things like release windows, and they insist on “stupid” rules such as time limits within which to watch rented content. No one but Apple is capable of producing a well-designed piece of consumer electronics.
Enough is enough already. Yes, Apple makes beautiful products that are well-designed and easy to use. But “$1 on-demand TV” is not “a brilliant idea in search of studio executives with a clue.” On the contrary, it’s a dumb idea that has found technology executives with no clue. That’s why TV networks other than ABC — which marches in lock-step with Apple owing to its common control by Steve Jobs — and Fox are shunning it. TV networks (other than ABC) also happen not to want to risk giving Apple the same degree of control over content economics as it has achieved in the music industry.
Why is Apple even doing this? That’s the question inquiring minds like Pogue’s should really be asking. Here’s my view: the first edition of the Apple TV was a bust (mine functions very well as a decorative paperweight); Apple now knows very well that people aren’t interested in owning TV shows. But Apple doesn’t have the infrastructure (including flexible rights management technology, among other things) to provide something that would interest consumers more. So as a transitional move, they have introduced a lower-priced box that does rentals. It strikes me as a stopgap effort by a smart company that ought to have a better longer-term vision.
Educating consumers on new content business models is expensive and difficult. Someone from Apple told me that the company spent half a billion dollars in educating consumers on buying individual tracks instead of albums. Yet even that’s an exaggeration: single-buying is not a new behavior, as anyone old enough to have bought 45s will know.
In contrast, there is no precedent whatsoever for paying piecemeal for TV shows, whether to rent or to buy. Some might buy entire seasons of important TV series (mostly non-broadcast, such as The Sopranos (HBO) and Mad Men (AMC)) on DVD, but that’s about it. Otherwise, this idea flies in the face of every precedent. Consumers rebelled against per-call charges for their telephones, and more recently, their mobile phones. Cable TV sells packages of programming.
Moreover, a recent article in the Financial Times suggests that the dollar-per-song business model is coming to an end as well: MP3 music sales are now flat compared to last year, suggesting that the market is saturated. Various business models that offer “access” to content on a subscription basis instead of “ownership” — such as Spotify and Catch Media for music — are touted as the future.
If you want an analog to these “access” models for video, it’s Hulu, not Apple TV. We watch Hulu on our Sony HDTV at home through a PC via VGA and audio cable connections. It requires a little finagling, and the resolution is not exactly HD, but it works tolerably. Hulu is to TV as Spotify is to music… except that the $10/month Hulu Plus is not ad-free… but then again, broadcast network television is generally not ad-free either.
Roku is working on a Hulu-capable version of its Internet TV device. Pogue reviewed Roku’s latest devices (“uglier” than the Apple TV) but did not mention this. Apple TV’s buck-a-show model will not, as Pogue claims, induce people to give up their cable service. But if Hulu offered more content and made it available through a $60 Roku box, we’d buy it in a heartbeat and dump Time Warner Cable in the next heartbeat. We’d pay the $10 per month. We’d pay double, or even triple, for no ads. That would be a bargain. So much for PogueWorld.