Apple's Disruptive Television Product Is Already Here and It's Called the "Apple TV"

A blog about business and economics.
Dec. 11 2012 4:45 PM

Apple's Disruptive Television Product Is Already Here and It's Called the "Apple TV"

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Tim Cook's statement about how television continues to be an area of "intense interest" for Apple has prompted yet another round of speculation about whether Apple will make a TV and what this Apple TV will look like or do. My suggestion is that Apple not only will make an Apple TV but in fact already makes an Apple TV—the so-called "Apple TV" which I and others own—and that future Apple TV products will be similar to this one.

Now, it is possible that Apple will take its existing little Apple TV box product and its existing 27-inch high-quality screen product and mash them together into something that looks like its existing all-in-one desktop computer product, but the point is that the core of the Apple TV experience will continue to be the Apple TV. As I've been trying to emphasize with repetition here, the giveaway is that the product is already called the Apple TV.

Right now it's a self-described "hobby" not a disruptive game-changer. But everyone thinks the game-changing disruption that will alter the television industry is cord-cutting and à la carte. In my household, as it happens, we're cord-cutters. The only things connected to our television are an Apple TV and a broadcast antenna. We watch Hulu and Netflix on our Apple TV, we buy some shows and rent some movies à la carte on our Apple TV, and we subscribe to NBA League Pass Broadband on our Apple TV. The disruption, in other words, is right there right now as we speak.

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The problem is it's not quite good enough.

Thanks to blackout rules, even if you subscribe to League Pass Broadband you can't watch your home team's games or ESPN or TNT games (i.e., the playoffs). To really make League Pass Broadband a compelling product, Apple and the NBA would need to negotiate different deals. I assume the MLB and NHL apps suffer from similar limitations. And Apple doesn't yet have a deal with the NFL to put its equivalent app on the device. But these are problems of an essentially incremental nature. There's no need for a revolutionary new product, just a series of better deals with the major sports leagues and, heck, deals with Major League Soccer and other less-major ones. Maybe ESPN will cut a deal for an ESPN app someday. Or maybe HBO wil create freestanding HBO Go apps and put one on the Apple TV. Everyone can come up with long lists of reasons why the incumbent players in the cable TV game don't want to make this swap. But every time someone cuts a deal to make the Apple TV model a little bit more attractive and a few more customers cut the cord, then that makes further defections that much more attractive. There is clearly more and better content available for Apple TV today than there was a few years ago and I bet that'll be even more true a few years hence.

And that's typically how disruption works. Not with a big-bang product that everyone gushes all over immediately. But with something small and crappy that couldn't possibly replace the full-powered real deal and yet somehow just gets better and better and better over time until one day the bottom falls out from the large incumbent. That's what Roku is doing, that's what Microsoft is doing with the XBox, and it's what Apple is doing with its Apple TV.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.