Apple has a brilliant plan to overtake traditional television

Apple's Brilliant TV Strategy

From time to time we like to post articles that are, essentially, reviews of a product or service, or insights into where we see an industry going. This time, however, we wanted to discuss Apple’s TV strategy.

That’s because many friends and family are confused on what services they should purchase and how they should purchase them. This brought us to the question of Apple’s somewhat confusing strategy around their recent Apple TV+ launch, the difference between the Apple TV device and the Apple TV app, the aggregation of content within the Apple ecosystem and more. So, we figured we’d lay out our thoughts on all of this to try and make it a bit less confusing. Let’s start by taking a look at the products and services surrounding Apple’s TV strategy.

First, there’s the Apple TV device. This is the hardware, running tvOS, that plugs into your television, just like a Roku, Amazon Fire TV, etc. It connects to the App Store and runs the various apps that allow you to watch things like HBO, Showtime, YouTubeTV, etc. You can also play games purchased through the App Store on it.

Next is the Apple TV app, which is available on the Apple TV device, but is also on various “Smart TVs” from Vizio, Samsung, Sony, etc. as well as other cord-cutting devices such as the Roku device. (Or, will be soon.) It can also be installed on iPads and iPhones. This is where Apple aggregates content across various services into a single interface: iTunes purchases, subscription services, TV+ and more.

Then there’s Apple TV Channels piece of the Apple TV app. This is where Apple offers you the option to sign up for other subscription services such as HBO, Showtime, etc. or add in other content sources like CBS All Access, NBC Universal, etc. It shows a list of “channels”, or services, that are part of your Apple TV experience, and shows from these channels appear in the What to Watch are of the TV app.

Finally, there’s Apple TV+. Apple TV+ is like a channel, but it only features content produced by Apple. Currently, there are a few TV shows available but soon it will feature movies and more. Apple has even enlisted some big names for their content: Steve Carrell, Jennifer Aniston, Steven Spielberg and more, so they’re putting a lot of time, effort and money into making their TV+ service a success.

There’s no doubt that this can all be a bit confusing. However, it is a brilliant, multi-year strategy that will help Apple keep all customers within the Apple ecosystem, no matter where they are or what device they’re using. It also allows Apple to sell even more services and get small amounts of recurring revenue by selling other companies’ services and platforms.

Now, you may be wondering why you would want acquire HBO, Showtime and other services from Apple rather than using each app individually. The reason is pretty simple (and pretty brilliant): Because by combining all of this into a single app, Apple makes all available content easily watchable and showcases new content intuitively, putting it directly in front of you within the Apple TV app. The Apple TV app also allows you to download some of these shows for offline viewing as well, unlike many of the apps that providers offer. (CBS All Access, for example.) Also, Apple has integrated this all into Family Sharing, so now your family can have access to all this content as well, right within the Apple TV app. All this gives Apple a HUGE advantage:

  • You have aggregated content from all media services (HBO, Showtime, NBC, CBS, etc.) within the Apple TV app, eliminating the need for 2, 5 or more separate apps
  • You are kept aware of new shows and new content, regardless of a show's “network”
  • You have access to all of this across any Apple device
  • You have access – or soon will – within your smart TV or cord-cutting device (e.g., Roku)
  • You can download shows for offline viewing
  • Your family has full access as well using Family Sharing

As for Apple as a media provider with Apple TV+, this is a logical step in the right direction because Apple has always been in the music business. Therefore, the move into original content is a normal evolution for them. It creates another sticky service that customers want, plus it also helps them tie customers into other media providers like HBO, Showtime, CBS All Access, etc.

It will be only be a matter of time before companies like Netflix and Hulu will want to be part of this platform, and if you think about it, new media providers who create content will not need to build their own apps for iOS, Android, Samsung, Vizio, etc. These new media providers will simply plug into the Apple TV app, which is across all platforms and devices. This allows them to focus solely on the media and their platform, and not on technology and app development for the distribution of their media.

Although this is all pretty complicated, and somewhat convoluted, it’s really a brilliant strategy and a very temporary problem. The truth is, Apple doesn’t want to be in the Apple TV device business because there is very little money in it. And because Apple is so big, it has been able to work with all types of device manufacturers to include the Apple TV app. In turn, this brings all media from Apple or third parties to all devices, and essentially gives Apple all the control. With their leverage, they have even required device makers such as Samsung, Sony and Vizio to include Airplay and other technologies that will fully integrate an iPhone to any of these devices. So, with all these devices including the Apple TV app, it will eliminate the need for Apple to continue building their own set-top consumption device, thereby eliminating confusion be eliminating at least one of the 2 “Apple TV’ names currently in use.

In the meantime, we get to appreciate some amazing content from a variety of media companies at very lost costs and, best of all, with limited commercials. We all see some consolidation with the media companies and a slowdown in the amount of media being created. In the meantime, there is a lot to be enjoyed as new media companies like Apple create new content to fill out their libraries and give us reasons to pay them money for their content.

And a side effect of this strategy is that it will be important, and telling, to keep an eye on companies like Google and Amazon and watch as their strategies evolve. Some of these companies are reselling services like HBO, Showtime, CBS All Access, etc., but Google and Amazon do not have the platforms or the leverage like Apple has. If you subscribe to these services through Google and Amazon, the places you can view all this content, at least for now, is very limited and still scattered across multiple apps.

Then there is a company like Roku, which is incredibly overvalued. They also resell services like HBO, Showtime, etc. However, you can’t watch that content anywhere else or on any other device except for another Roku. And now Roku is implementing the Apple TV app on their devices. Imagine how doomed they are, moving forward.

Apple transforms, or disrupts, industries and gives people what they don’t realize they need. They did it with the iPhone, they did it again with the iPad, and they did it yet again with the Apple Watch. Now, they’re doing it with services. They have laid claim to the consumer market with their devices, tying people to hardware and essential services (the App Store, etc.), and they’re just adding to those services with television. They build for the future, not the NOW. Are people ready for all this consolidation? Maybe not now, but they WILL BE. And when they are, Apple will again be leading the way.