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Summary:

Apple may decide not to reinvent the wheel for any upcoming Apple TV product. Instead of offering access to integrated live TV feeds, it may partner with existing pay TV operators. Best suited for this kind of partnership may just be Dish or DirecTV.

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By now, we’ve all heard plenty of rumors about Apple building an actual TV set — a rumor that was only fueled by the recent minor and somewhat underwhelming update to its existing Apple TV set-top-box. The question is: What kind of TV services would Apple offer on such a device? BTIG analyst Richard Greenfield examined a few theories in a very smart blog post (login required) Wednesday, and his conclusion may surprise you: Apple shouldn’t try to reinvent the wheel, he suggests, but instead partner with DirecTV or Dish to launch an Apple TV product with access to live TV feeds.

The speculations around a new Apple TV product were fueled by the Steve Jobs biography, which has Jobs saying that he “finally cracked” the challenge of building an integrated TV experience that’s easy to use. Greenfield notes in his blog post that Jobs essentially described the exact opposite of your typical cable TV experience, with its hundred-plus channel guide and its overwhelming remote controls. In other words: For Apple to revolutionize television, it would have to offer access to linear TV, with a new interface.

Ditch the cable UI

That’s something Google has been trying with its Google TV platform, but the approach is still very cumbersome. Google TV set-top boxes require not one, but two HDMI cables to access pay TV, and the ugly face of the cable guide still resurfaces all too often. Apple’s only solution to the problem would be to either take an existing service and completely reinvent its UI, or create a whole new offering to compete with Comcast & Co.

Jobs reportedly tried the latter a few years back, but was rebuffed by the networks who didn’t want to endanger their lucrative deals with existing operators by unbundling their channels for an Apple TV offering. The company could try again, Greenfield argues, but this time offer to carry the whole bundle – and even charge customers more, not less, if it succeeded at making the bundle look sexier. Think integrating an iCloud DVR, piping live TV to your iPad, and so forth.

Cable partnerships are messy

Still, creating a virtual operator – essentially a cable company without cables in the ground – is complicated, expensive, and could take years. It would be much easier for Apple to partner with an existing operator, which is what my colleague Ryan Lawler has also been arguing, except for one important detail: Cable operators are regional, so Apple would have to partner with a bunch of them to get its Apple TV service off the ground.

And these kinds of partnerships are still pretty messy, and full of politics. Comcast, for example, wants to own the experience, which is why the company’s isn’t allowing its customers to use the newly-launched HBO Go app on the Xbox, forcing them to use its own Xfinity app instead. It’s unlikely that Comcast would treat Apple any differently. Correction: HBO Go went live on the Xbox for Comcast customers earlier this week, but is still not available to Comcast subscribers on the Roku or Samsung smart Tv platform.

The solution could be to partner with a TV provider with a national footprint that has little to lose, according to Greenfield. Someone like Dish or DirecTV. And once those guys rake in the big money, the cable boys will come to their senses and eagerly partner with Apple as well.

It’s an interesting argument, if only because it shows how difficult Apple’s foray into the TV space would be. The company surely has mulled over these issues as well. Now let’s see if it follows Greenfield’s advice.

  1. Would this mean that every time a storm comes or it’s windy I’d loose my Apple TV reception?

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  2. Depending on the implementation, the data may be pulled in via WiFi (or 3G/4G). Hence rain or shine, customers get their favourite shows.

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  3. Dealing with the cable companies. Ugh. Can tou imagine someone well heeled enough to afford an Apple TV set when you can get a perfectly good pannel quite cheaply, who would be interested in 90% of the crap on cable?

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  4. Janko, what is linear TV?

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    1. Exactly. Linear TV and the concept of DVR-ing shows need to die. We traveled overseas recently with our Apple TV and were able to keep up with all our usual network shows with it. It still costs slightly more to buy all the shows we watch on Apple TV than to subscribe to standard HD cable (and the Apple TV UI could use a few minor improvements to make it easier to keep track of the shows you watch regularly) but other than that, the on-demand, commercial-free experience was simply fantastic. It was hard for us to go back to the DVR experience with the suboptimal UI and the fast-forward button.

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  5. “Comcast, for example, wants to own the experience”

    HAHAHHAHAHA

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  6. ahh, just simplify TV. Cable TV is over the top stupid. hundreds of channels, all repeating shows over and over again, old content, so much stuff you don’t watch because you don’t know if its a repeat. It’s more than information overload, its crap TV overload.

    For any Apple TV offer something worthwhile, users should be able to cherry pick the channels or ideally the programmes they want to watch and not be forced into taking channels that are bundled together.

    Cable provides need to focus on delivering high quality productions rather than filling the channels with a lot of junk. Less if more as they say.

    If anything Cable TV are slowing killing themselves, they just don’t get it!

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  7. It seems to me that, technically, it’s not a big leap for Dish or DirecTV to be reinvented by Apple as an IPTV service — making weather conditions irrelevant. In fact, if that were the case, a scaled-down version could also be offered on the iPad: the ultimate “TV everywhere” platform. The key for Apple and their satellite partner would be the renegotiation of transmission rights to include the alternate technology.

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  8. To quote Mike White:

    “I think you’ll see a little bit of the future in our HD user interface because although that’s for the linear product, it will give you a sense of how we’re looking at kind of speed of response, search engines, recommendations, shows you might like, poster art for movies, a much more, I would say, Apple-like, to be honest, experience from an interface standpoint,”

    That was from their last earnings call. I don’t think an Apple-like experience is coincidental. I believe Mike and Steve may have “cracked it” awhile back! And why not. The best quality content provider with the best hardware and experience provider. Boom. Oh. And one more thing. Add TiVo to the mix. Oh yes. TiVo.

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