Will TV be Apple’s demise?

A column in today’s Wall Street Journal suggests that Apple’s end-to-end control of the device-distribution ecosystem – one which it pulled off so famously in music a decade ago – is not going to work in TV.

An obvious argument, one which all but the most ardent Apple fan would admit is mostly correct. However, the column goes much further, effectively creating a strawman that suggests Apple is looking to repeat the success in music by using the exact same playbook it used for music.

The problem with this argument is that while many of us are still guessing what Apple’s long-game in TV will be, I can pretty much guarantee that the folks in Cupertino are savvy enough to understand that the TV business today – while rife with issues in large part due to incumbents looking to hold onto their remaining market power – is still not what music was at the beginning of the century when Apple so ably filled a massive void with its the one-two punch of iTunes/iPod.

Sure, their recent missteps with Maps shows that Apple does indeed make mistakes, but to extrapolate from there to suggest an unbending quest for control over the entire TV distribution ecosystem on Apple’s part – including not working with TV content providers in a friendly way – is a leap in logic that ignores how the company has been treading very cautiously into TV so far, and certainly hasn’t shown that it’s going to take the winner-take-all approach it took with music a decade ago.

Instead, I’d look at ebooks for a closer analog to how Apple may ultimately play with partners. While Apple’s efforts in books has gotten bogged down in legal issues around e-book price fixing, the company’s foray into ebooks illustrates that the company does recognize that each industry has its own set of competitive dynamics, and one such as ebooks, where clearly Apple set out in a very different position than it did in music, shows the company will indeed work with key content providers on terms that are more favorable in order to achieve market penetration.

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Wolf

Michael Wolf

Chief Analyst NextMarket Insights

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