Apple’s TV future: Hardware or software?

Many people are waiting for Apple to fully commit to ‘fixing’ TV. Following on from disrupting the music industry with the iPod and iTunes Music Store and the mobile phone industry with the iPhone and iTunes App Store, when will Apple take on broadcast TV? Also, is their answer TV hardware or software?

“It will have the simplest user interface you could imagine. I finally cracked it.”

One of the most repeated excerpts from the official Steve Jobs Biography, ‘Jobs’ by Walter Issacson, still prompts questions. On the eve of every Apple product announcement event, we wonder whether this time we will find out what Steve meant.

Apple TV hardware

Over six years ago Apple announced their TV ‘hobby’ product: The Apple TV. A small device connected to HD TVs designed to store, stream and play back TV shows and other 720p digital content via a network-connected Mac or PC. They made a point of not promoting it as a major platform at the level of the Mac or iPod. They described it as a product that would help Apple explore future media possibilities. Apple didn’t want analysts to presume that Apple TV would be a second market-disrupting product in the same way that the iPod and iTunes Store was.

Over the years since March 2007, Apple have slowly evolved their hobby.  In January 2008 a software update removed the need for a Mac or PC to purchase via the iTunes Store. Steve Jobs:

Apple TV was designed to be an accessory for iTunes and your computer. It was not what people wanted. We learned what people wanted was movies, movies, movies.

September 2010 saw the biggest change in the Apple TV: the ‘2nd generation’ version dropped the internal hard drive. It was also much smaller and much less expensive. The current 3rd generation Apple TV has a faster processor and more streaming services at full 1080p resolution.

Why does Apple TV remain simply a (very profitable) hobby for the iPhone, iPad and Mac maker? The complex TV and film market in the USA and worldwide.

Due to the way TV shows are funded, it would be very hard for Apple to get the rights to show all the shows people want to see. Networks sell advertisers a certain number of viewers, they sell off-network repeats to different online streaming services. Exclusivity is seen as valuable, for example Netflix is funding its own shows, popular exclusive series drive up subscriber numbers.

In most homes Apple TV isn’t the most important device plugged into the TV. TV channels, time-shifted recordings and video on demand are supplied by a single box provided by a cable or satellite TV provider. In many homes the next connection is a games console, after that comes a Blu-Ray or DVD player. This means the Apple TV is relegated to the 3rd or 4th input on most TVs. Even if Apple came up with a world-beating TV user interface, there isn’t yet a way to incorporate non-Apple TV compatible content into the experience. Even if they did, cable and satellite distributors don’t want to concede their positions as the primary TV device.

When it comes to hardware, Apple seems to have two options: improve their set top box and or launch a full-size TV that has built-in ‘4th generation’ Apple TV.

The more extreme Apple enthusiasts want them to enter and disrupt every industry from cars to architecture. However, few commentators believe that Apple will want to go into the business of selling full-price HD and UHD TVs. Macs hardly lose any value for months or even years, but most consumers expect their TVs to last at least five years of not ten. Apple like to sell high-margin products that people replace every two to four years. Home TVs, even expensive ones, have neither high margin nor short lifespans.

It is likely then that the hardware part of Apple’s TV plans centre on the Apple TV, iPad and iPhone.

The 4th Generation

For the Apple TV to become the primary device connected to the TV, it will have to incorporate all the channels, streaming services, games and disc-based content in the same UI – without will co-operation with its competitors. In practice, Apple will want other TV devices plugged into their Apple TV, with the Apple UI switching between services, channels and devices.

The HDMI connection standard includes Consumer Electronics Control, a feature that enables one device to control others. HDMI CEC would let the Apple TV send commands to cable company set-top boxes which include

– playing, pausing and rewinding digital recordings,

– manipulating the UI,

– setting timer recordings using information from electronic programme guides (EPGs)

If all the ‘other sources’ manipulation can by the Apple TV ‘behind the scenes,’ then Apple will have a chance to revolutionise the way people watch TV. This will be even harder to achieve than their disruption the music and phone industries because the incumbents can see Apple coming this time and they can also do more to prevent Apple gaining any control over the total TV experience.

Apple TV software

Perhaps Apple think that they can do much to further digital TV and movie content itself. They make big profits on selling hardware that their software ecosystems have made desirable. Could they improve the kinds of the extras that come with TV shows and films?

When the DVD standard was being developed in the mid-90s, one of the features that set it apart from VHS tapes was its interactivity features. Alternate soundtracks could include commentary tracks or alternate scores, subtitles could display scene-specific trivia or simple graphics, and a moment in a film or TV show could be directly linked to a video extra showing an alternate shot or a behind-the-scenes film.

Blu-ray, a HD disc standard, was launched in 2006. As well as HD movies and TV shows, Blu-ray discs can also deliver more advanced interactivity than DVD. The biggest leap over DVD was supposed to be ‘BD-Live.’ BD-Live Blu-Ray players have internet connections, so that new content and live events could be accessed by owners of specific Blu-ray discs. In practice audiences never warmed to BD-Live.

Digital distribution

Apple’s iTunes Store downloads can include extra features also. Starting with iTunes LP for audio recordings and now with iTunes Extras for video, Apple provide templates and guidelines for those making extras for the iTunes Store. Maybe studios will use iTunes downloads as a replacement for advanced movie extras. For example, the new Star Trek into Darkness Blu-ray discs include a code that redeems a digital download from the iTunes store that includes up to date bonus materials alongside the HD copy of the film.

A catch with Apple iTunes Extras is that there is no authoring tool yet available for studios and individuals. Development is more suited to advanced web and application programmers. As Apple has made of point of not embracing Blu-ray in Mac hardware or software, and have not updated iDVD, perhaps they should continue the pressure on disc-based formats by launching an easy to use tool for creating better titles for the iTunes Store.

Apple launched the iBooks Author application in January 2012. iBooks Author is free tool that individuals and organisations can use to create advanced e-books for the iPad. The launch of iBooks Author was tied into an Apple push of iPads in education. It was designed to show how iPads could be more than mere e-book readers, by hosting textbooks with interactive features for illustrating points and quizzing students.

As well as providing a tool to improve the e-books sold on its ‘iBookstore,’ Apple also made it easier for authors to distribute their work for iPads. There is ‘Publish’ command in the iBooks Author app:

Apple have already announced that the interactive e-books created in iBooks Author will soon be readable on Macs in the new Mac OS X Mavericks, and there are rumours that iPhones will soon also be able to read interactive iBooks too.

Share to iTunes Store?

Since Summer 2011, Final Cut Pro X, Apple’s editing application, has had a feature that helps editors get films and videos online in one step. ‘Share to…’ uploads the correct format of video directly to YouTube, Vimeo, Facebook and the CNN iReport website, using stored account credentials. What if Apple added a ‘Share to iTunes Store’ option? Subject to the same curation rules that Apple applies to  apps, music and books, there could be a section of the iTunes Store open to TV and film makers.

YouTube also provides paid content distribution for independent producers, but those services aren’t available on Apple TV.

Alongside the source video, Apple could provide an iBooks Author-like tool to support the development of the content around the TV show or movie. Back in December 2009, Johnathan S. Geller of Boy Genius Report wrote that Apple would soon be adding the ability to produce audio extras to the iDVD part of the iLife bundle. Perhaps once a video is shared to the iTunes Store using Final Cut Pro X or iMovie, it will be made available for rental or purchase once the required iTunes Extras files are submitted – which would include a description, cast list and poster at the very least.

As well as being viewable on iPod Touches, iPhones and iPads as well as Macs and PCs with iTunes, iTunes Extras can also be watched on TVs using the Apple TV.

As all the devices that can play iTunes Extras can also run apps, once people get used to getting DVD and Blu-Ray style extras with their digital downloads, Apple will then be able to extend the Extras specification to include more advanced extras – including second-screen display.

Second screen display means that if the different people watching the same show on an Apple TV have different iTunes Extras needs, those extras can be made available on their own iPod Touch, iPhone or iPad while staying in sync with the TV display. For example I could watch full length behind the scenes documentary on a show I’ve seen before while my friend, who is a newcomer to the show, could read catchup notes if they don’t want to spend the time watching all the previous series if it’s a long-running show. A third person could read and add to tweets or Facebook comments that can be timed to display in sync with specific moments in the show.

Some independent producers might say that replacing studios and broadcasters with Apple is swapping a set of corporate gatekeepers for another. The difference with Apple as a distributor is that as long as they get their 30% cut for storage, streaming and handling the money and as long as your content wouldn’t be rated any stronger the equivalent of ’18’ (in the UK) or ‘R’ (in the US),  the rest is up to you.

What do you think Apple’s TV hardware and software future will be?