Tech journalists have been following rumors of an Apple TV set with an unjustified fervor. Why the fervor? An Apple TV set would (if the past decade is any indication) revolutionize the way we pay for television. It would be a mythical convergence box on which we could pay for video via Apple’s proprietary infrastructure. It would be a dream to use, and it might even break Apple into the video game console market. Why unjustified? Because mythical convergence boxes already exist… at scale. They’re already present in many, many American homes. They already give us our video, our music, and our games. They’re already a dream to use.
XBOX 360. PlayStation 3. Nintendo Wii. It’s almost scary that not one but three convergence boxes found their way into the living room and no one noticed. They haven’t been the result of secretive engineering in some thermonuclear iBunker. Each device has evolved because of (and to better) its competition. Each device plays games — they are, after all, video game consoles. But each device also streams Netflix. Hulu Plus streams to the XBOX and the PS3, and is set to release for the Wii in the near future. In addition Microsoft has been aggressively pursuing streaming deals with major television and sports organizations, including HBO GO, ESPN, and the MLB. ESPN will also be arriving on the PS3 before too long. The sum of all these events, though alone they remain uninteresting, is convergence. In the original sense of the word: separate technologies developed by separate companies across varying spans of time converging on one device (or on a few).
Netflix on PS3
To realize how fully this convergence of videos and games has changed our lives, rewind the clock one decade. Imagine being presented with a box on which you could watch live or delayed sporting events, current television, old television, and a near infinite library of movies. It streams across your home network or plays local video and audio files in many formats. It just works.
No such device existed ten years ago, and journalists waxed on about a magical box that could do all of the above. Now that it’s here, many of those same journalists are circling for bits of a story about an Apple product that won’t break for at least six months, if it breaks at all. Now that we have a convergence box, we’re going to wait for Apple to build another one for us. Except for those of us who aren’t, including myself. I’ve got (disclosure) an XBOX 360. It does everything I need, more than well enough. With the help of some third party software, I can even plug it into my iTunes over the air. Not to hate on Apple, of course — I often plug that convergence box of mine right back into my iMac. I use my iPod touch all the time.
Hulu on XBOX 360
But the world of the living room isn’t the personal computer market when Apple unveiled the Macintosh or the digital music market when Apple unveiled the iPod: scattered niche products, none of which lived up to the Apple standard of design. It isn’t the personal computer market when Apple unveiled OS X or the smartphone market when Apple unveiled the iPhone: a well established oligopoly with with large players in both hardware and software or cellular network. The living room is a collection of media consumed by us, sitting on couches. More than just one market, the living room is ten to twenty on a slow day. The consumer doesn’t care how his media gets on his big screen; he only cares that it does. Steve Job saw that, but he also saw a problem innovating in that market:
The problem with innovation in the television industry is the go-to-market strategy. The television industry fundamentally has a subsidized business model that gives everybody a set top box for free or for ten dollars a month, and that pretty much squashes innovation because nobody’s willing to buy a set top box… The only way that’s ever going to change is if you can really go back to square one and tear up the set top box, redesign it from scratch with a consistent UI across all these different functions. And get it to the consumer in a way that they’re willing to pay for… It’s not a problem with technology. It’s not a problem with vision. It’s a fundamental go-to-market problem. (D8) (or YouTube)
And believe wholeheartedly that a good portion of Steve Jobs’ last decade on Earth was spent solving that go-to-market problem. A mind as brilliant as his cannot resist contemplating that sort of business challenge. Microsoft, Sony, and Nintendo all saw the same problem. And they solved it. If no one’s willing to buy a set-top box, don’t sell one. Sell a gaming console that also gives you a pretty good approximation of live and updated programming. Featurize television. One day the people who buy your gaming console will look at their cable bill and wonder what they’re paying for. I know I did. Well… Not technically. I’ve never had cable. My house mates and I have been quite happy with an XBOX streaming Hulu, Netflix, ESPN, and (soon) HBO GO. We’re not cord cutters because we never had the cord. If you’re my age or younger, chances are you’ll never have one either.
Cable and television executives are, naturally, quaking in their broadcast boots. They didn’t want to do business with Microsoft, Sony, or any other innovators. So Microsoft and Sony waited until third parties found a way, and then did business with those new companies. The broadcast world will be left to wallow in irrelevance as the likes of Netflix and Hulu take their crown. There are certainly technical problems to be solved — broadcasting over the web may never scale in the way it does on the proprietary infrastructure of cable companies or the waves of broadcasters. Solving those problems, like any in the world of programming and computers, needs only time, talent, and hard work. However, all these shifting winds mean that Apple’s window to create a new market may already have closed. Microsoft has that consistent UI across its console, phones, and computers. Sony and Nintendo are hot on Microsoft’s heels. Television is close to finding its new-and-improved normal.
If Apple does hold some dazzling new media PR event in the next six months, my bet’s not on some Apple TV set. I’ll predict now that Apple will (as only Apple can) blow us all away with something no one saw coming.