The status quo for visual content has always been that its creation, delivery, and consumption have clearly delineated borders. Content creators created the content, cable providers delivered it, and viewers consumed it on the big screen in the living room. In the last few years, we’ve seen a fundamental shift in the visual content landscape occur. For the first time since the advent of cable television in 1948, the lines are becoming continuously blurred as the quality of content created by non-prime networks and even individuals continues to grow, it increasingly reaches us over the internet and is consumed on whatever screen we happen to be in front of at the time.
As the chatter about Apple creating a television of their own continues to gather steam, and we consider what it will take for Apple to compel buyers to pay a premium for an Apple TV, many believe that a content package of some kind will be part of any new Apple TV offering. Yet, the challenges in compelling content creators to package their content for Apple in any way that will be attractive to consumers (such as a monthly subscription package) are formidable. License holders are loathe to upset the golden goose that is the traditional TV networks that pay them billions of dollars every year for the privilege of carrying their content.
The User Experience Control Rock/Hard Place
This leaves Apple in a position they famously loathe: there is a significant portion of their consumer experience that is outside their control. Yes, it is not the first time their device’s user experience have fallen outside of their control: readers will point to their iPhones where the phone service is provided (poorly ) by cell phone companies, but Apple demonstrated their discomfort with their products’ user experience being at the mercy of any outside entity by taking a close look at creating their own cell phone company.
So Apple is in a position where they are at the mercy of the content creators finding the courage to license their content in new ways. And, at the same time, if recent reports are to be believed, they are within sight of releasing a new TV (or line of TVs) that will likely carry a premium price tag over traditional brand name TVs and they surely feel compelled to provide consumers with new content consumption options.
Apple as the ‘Content Facilitator’
Perhaps it is time for Apple to get into the content creation business and license their own content. I’m talking about the kind of compelling content that has multi-season legs and generates strong buzz such as ‘Dexter’, ‘The Sopranos’ or ‘Mad Men’. Imagine if they approached a number of famous and successful producers and convinced them to create a series for Apple: “TV series by Steven Spielberg, exclusively on iTunes”. Or Quentin Tarantino. Or Tom Hanks. (Imagine the buzz of announcing something like that at the Apple TV launch event). If successful, they could expand into sitcoms and other genres.
(‘Content creator’ is probably the wrong way to describe what we are proposing since that implies Apple is becoming the new Disney. ‘Content facilitator’ might be the more accurate, albeit unwieldy descriptor, since what are suggesting is that Apple facilitate other, established and successful creators to generate compelling content that Apple would then exclusively distribute).
Exclusive Content as Driver of Hardware Sales
To be sure, Apple will still need the ongoing participation of traditional content holders as any new content consumption package will have to include access to Glee, Gray’s Anatomy and other popular programming. But if Apple succeeds and their content is compelling enough, the exclusivity of the content will help drive hardware sales, particularly if Apple does end up releasing a TV. And driving hardware sales is the ultimate goal of everything Apple does as Steve Rubel , an EVP at Edelman recently pointed out on Twitter when discussing the differences between Amazon and Apples strategies:
Steverubel: Seems like Amazon and Apple are really opposites. Amazon uses devices to sell more content. Apple uses content to sell more devices.
Yes, it will be costly for Apple to develop their own content but they have quadrillions of dollars in the bank and, to me, this is as compelling an investment for a small portion of the funds that I have seen. (If having a number helps you visualize this scenario imagine if they devoted, say, $500 million to content creation). The move of non-traditional content holders acquiring content has already begun as Netflix’s recent resuscitation of the popular Arrested Development series attests (and their acquisition of Fincher’s House of Cards which they outbid HBO for).
So others have done it before (there are other examples besides Netflix too). What I am suggesting, however, is that Apple take it even a step further beyond what Netflix did with House of Cards–where presumably Netflix outbid others for an existing series–and apply Apple development principles/excellence to content creation. That is, they pursue some of the best of the best in the industry and get them to develop exclusive content for them and generally apply their high standards of excellence to the process of content creation (hire the best content executive out there to oversee their content creation division etc).
For Apple, succeeding in any way with content facilitation will be a step forward, no matter how small, towards loosening the hold content license holders have on a holistic user experience. In a best case scenario, it could give traditional license holders pause in future negotiations–that Apple has already gone out and developed their own content in the past and perhaps their own content is not as bullet proof as they think.
To recap: arguments in favor of Apple becoming a content creator:
- Drive Hardware Sales: Great content exclusive to Apple and accessible across the full spectrum of Mac/iOS devices and a new Apple TV will drive new hardware sales and increase stickiness for existing customers
- Stir the User-Experience/Control Pot: If the content is compelling enough, Apple will succeed in challenging the control license holders currently have on the Apple user experience, at least as far as content consumption goes.
To those that say that Apple is outside of their wheelhouse and should leave the job of content creation to traditional creators, well, the times they are a’changin’. And, I remind you that as Steve Jobs himself pointed out, things are the way they are only because people no smarter than you said they are.
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- About the Author
Nathan Safran is a former Analyst at Forrester Research where he covered the Digital Home. While at Forrester, Nathan authored research studies on trends, attitudes and behaviors of consumers toward technology adoption and use.
Nathan has been quoted as a subject matter expert in publications such as the Wall Street Journal, USA Today and Fortune magazine. Currently, Nathan heads the Research Department at Conductor, Inc an SEO Technology Platform firm.
Nathan writes at exceljockey.com about the intersection of Business, Technology and Psychology. See the About page for more info. Follow Nathan on Twitter: @Nathan_Safran