Apple TV: It’s the Content, Stupid; Also, Why Apple’s New Rental Plan Bothers Studios

Sep 2, 2010  •  Post A Comment

"The new Apple TV will fail, just like the old one did. It isn’t Apple’s fault. It looks like the TV and movie studios just don’t want anyone disrupting their existing businesses, and this is one battle that even Apple may not win."

So begins an essay by Sascha Sagan at PCMag.com that he calls: "Apple TV: It’s the Content, Stupid,"

One poinrt Sagan makes is that content is just too darn expensive to watch on Apple TV. Of the 99-cent TV shows, he writes, "That sounds cheap, but each show can add up to $24 per season—and you can’t watch any of those episodes a second time without paying again. While that can be much cheaper than cable if you only follow a limited set of TV shows, I just don’t think it’s cheaper by enough to make a real difference."

Furthermore, Sagan writes, "Apple dodged a paradigm shift by neglecting to introduce apps for the Apple TV. Apps—especially games—could have been "stuff to watch" on the Apple TV that would have been totally independent of TV-industry revenue models. No one has done "apps on the TV" really well yet, and Apple could have shown the way. The Apple TV could also have become Apple’s TV gaming system. Nope."

Meanwhile, separately, The Hollywood Reporter looks at why Apple’s plan to rent television shows for 99 cents has alienated some studios. The non-participating studios think the offer devalues the content by pricing it below the episodes already offered for sale on iTunes, as well as jeopardizing DVD and syndication sales, according to the Reporter article.

Apple’s plan could spin out in a similar way to how the music industry was damaged by iTunes’ emphasis on singles, rather than on selling entire albums, the piece says. Because of these issues, it’s unlikely that other studios will be joining Disney and News Corp. in embracing Apple’s 99-cent rental program, the Reporter article adds.


  1. What’s stupid is to write off this product before it even ships. Who, other than writers on short deadlines, thinks this 99 cent rental model is the sum total of Apple’s TV plans?
    This is no doubt an incremental improvement with a very low entry price ($99) that introduces a powerful and bone-simple new operating system into the living room.
    What’s more, anytime they want, Apple can upgrade the AppleTV software to accept a wide range of video games and TV-centric apps.

  2. Still, I think Sagan presents a good point. This new AppleTV COULD indeed be a game changer like the iPod was…. But right now it just looks like a long term strategy that might work or a possible misstep. I think a lot of people are wondering why it doesn’t do more than it seems to.
    Then again…many people may not be wondering anything at all because it doesn’t seem like that much of a game changer.

  3. Did anyone notice that Steve Jobs wasnt wearing his normal turtle neck during his speech. Apple is going to crush the media industry with this current news. Did anyone think they were going to release a new version of iPod. I cant wait to try it. Another step forward for Apple.

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