• Farewell, Cable

    Back in 2005 I made a prediction about Apple’s plans with the iMac/iTV, which was completely wrong. Today, I plan on building on this solid track record by offering my thoughts for what’s next.

    Apple’s done a pretty impressive job of being the first successful entrant in to the mobile computing market. If you ask me, their lead at this time is so far ahead that it’s almost not worth anybody else trying, because the rest of them have already missed the endgame. Allow me to explain.

    Looking back, we now know that that the iPod was the Trojan horse that got us to buy iPhones and Macs. The iPhone may end up being the Trojan horse that gets us to buy iPads. So, what nefarious plan is tucked inside the shiny exterior of the iPad?

    None of other than the death of cable TV.

    Pricey Products
    For years, people have criticized Apple for making products that are too expensive. But guess what? They’ve still sold the crap out of them using a simple formula. First, they price their products between the boundaries of more than you want to spend and less than you refuse to. Then, their sexy product implementations wear down your resistance and seal the deal. Finally, their top-of-the-line user experience draws you back for the next product release, and the cycle repeats itself.

    Now clearly, if you can’t afford their products, no amount of slickness will transcend that physical barrier. However, for Apple, this is still a plus. I’ll explain why in a second, after I talk about how much cable TV sucks.

    I Hate Cable
    Cable is awful. It’s expensive. I get 7,000 channels. I only watch 10 of them. I follow maybe 5 or 10 TV shows. I have to watch the programs on the cable company’s schedule, or DVR them and endlessly fast-forward through ads. Many of these ads hold no interest for me; they suck (”TYLENOL IS BETTER!”; “NO, ADVIL IS BETTER!”), and they aren’t targeted at me in any way.

    What would I like instead? A subscription-based TV model, where I pay, oh, I don’t know – $0.49 to $0.99 per episode? Or maybe even something like the $8/month I pay NetFlix to get all my content on-demand in streamed form. In doing so, I could save myself about $80 a month in cable subscriptions and get out of watching crappy ads. Unfortunately, this is exactly why I’ll never be able to just buy all of my shows. The cost of creating quality television and film content is so high that the only way to offset the production costs is the subsidies from advertising revenues. This is why NetFlix’s streaming service mostly streams shows and movies from the last decade.

    Enter Apple
    So, there’s this new device now called the iPad. And it’s just big enough for me to entertain myself using nothing else besides a pair of headphones and my fingers. I can get all my music, all my movies, my NetFlix, some games, Internet browsing, and apps related to things I’m interested in. And I can get all of this whenever I want, wherever I want (once the 3G version comes out). And all I have to do is pay AT&T $30/month for the wireless service.

    And what’s this? Apple has released a platform called iAd. This allows app developers and content providers to embed advertising in their content. Not only are these ads basically mini apps, but my device knows exactly who I am and can tell the ad server all about it. I might decide in the future that I’m willing to trade personal info about my interests in exchange for free content, and put up with a little advertising in return. At least it would be targeted.

    And you know what else? The advertisers know I can’t be a complete scumbag, because if I was, I wouldn’t have been able to afford an Apple product in the first place. Being an Apple product owner by itself likely says a few things about me, namely: I’ve got some loose cash, I like shiny things, and if you can give me a high-quality experience I’ll take a look at your product. That might be worth more to the advertiser than a random cable TV ad which can only be hit-or-miss at best.

    In Closing
    I think this is it. Apple may have finally figured out how to provide advertisers a viable alternative to the dying medium of wall-mount TVs, cable company nonsense, and banner-based Internet advertising in one fell swoop. It seems likely to me now that Apple didn’t introduce multitasking until OS 4 because iAd wasn’t ready yet. Multitasking became a necessity so that you wouldn’t be afraid to lose your place in your free app/movie/TV show when you clicked the ad that popped up.

    Now of course, Apple is not big enough to offer sufficient advertising eyeballs to replace the cable TV industry by themselves. But if Apple’s model is successful then others will follow suit. And if nothing else, there might be enough eyeballs in the iDevice platform to make it attractive to advertisers, and if that’s the case then it becomes worth the network’s while to give their content away for free in exchange for a little ad space.

    The real goldmine that was touched on during Apple’s demo was when Steve showed how a fan could buy a Toy Story 3 game right in the iAd for the movie. Imagine if, as you are watching TV, an ad pops up to let you seamlessly pause the show and buy a pair of sneakers one of the characters is wearing. Or order a copy of a game that you see them playing in the show. That’s real bacon. I don’t even want to guess how much more money is going to be wasted on items purchased from QVC once the online purchasing experience is integrated into the programming.

    I surely hope this is the case; I’ll be happy to kiss cable goodbye forever. Yay for free/cheap, on-demand, ad-driven mobile content!

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