Apple is likely to unveil a new version of Apple TV soon,
and the major new features will probably be 4K/HDR support along with a faster
processor. Supposedly Apple is arguing with studios over the pricing for 4K
movies – Apple wants to charge $19.95, studios want $29.95. Really, this is a
battle with no winners, only losers. Who buys movies any more? It’s streaming
all the way down. If this is all Apple has for the Apple TV, the product will continue
its slow downward slide in market share as Roku and Amazon continue to
grow. What’s so great about Amazon and Roku? Look no further than the pricing –
you can get a streaming stick for $40 or less. Apple’s TV solution begins at
$150. That’s why Apple TV has a 5% market share, well behind Roku’s 18% (as
well as Amazon’s Fire TV and Google’s Chromecast).
Apple could certainly dominate in this market if it wanted
to – after all, the company has more money than any other company (well north
of $200 billion in cash!) and an enormously talented hardware and software
engineering team, as well as top-notch marketing. They have the resources, but
not (apparently) the burning desire to dominate the TV market.
How could Apple TV dominate the market? Here are 5 ways:
Go Big with Games
Apple has already taken the important step of putting an App
Store on the Apple TV, but they didn’t really push the idea. Some game
publishers offered games, but nothing really compelling – and Apple didn’t
really market the idea of Apple TV as a game-playing device. The problem isn’t
the Apple TV’s horsepower (though a more powerful CPU/GPU would also help,
along with more RAM) – it’s the lack of good controls. Apple should at least
offer its own Apple-branded controller, or better still bundle it in. This
could be a controller in the old-school mode of the Xbox, or even a bigger
version of the touchpad with a thumbstick or two.
Beyond the controls, Apple needs to take some of its spare
change and buy some top-quality exclusives – maybe a studio or three to make
sure they are properly done and supported. Nothing moves game hardware better
than kick-ass exclusive games. These can (and should!) be based on well-known
IP, though you should also take some risks with compelling new IP as well.
Throw a billion dollars at this, or maybe two, and you’ll get plenty of amazing
games.
Finally, market the living hell out of these games, and push
Apple TV as an important gaming platform that every publisher should support.
Will this be enough to sell millions of Apple TVs? Not by itself, but if you
take the next point seriously, it will.
Slash The Price
C’mon, Apple, if you really want to own the market you have
to be price-competitive. You can make plenty of money on software here, but
only if you have a huge installed base. Which means you need a low-cost option.
An Apple TV stick for $49 would do the trick; you can still have higher-end
boxes, but that should be $99 and perhaps $129 for the loaded version with
extra RAM and two controllers. What about your margins? Consider those lost
margins a marketing expense. If you’ve got compelling softwre and services,
you’ll easily make that up.
Offer Bundled TV
Channels
Yes, it’s time you stepped up and cut some deals, rather
than demanding everyone bow to your will. If Sling and PlayStation Vue can
offer bundles, why can’t you? With Apple’s massive power you should be able to
offer a compelling bundle of channels at a great prices – or better yet,
several options at different price points, ranging from $10/month up to
$99/month (don’t leave the high-paying customers behind!). The right prices and
collections of channels will make Apple TVs sell very, very swiftly.
Include DVR
Capability
Sure, local storage is expensive, but that’s what vast cloud
storage and streaming is for. Haven’t you been building out that capability?
Give people what they want, and let them time-shift broadcast content. Heck,
you can start charging for it after a certain amount of free storage, and
probably make another huge fortune just from that. Record 50 hours of
programming for free, then it’s $9.99 a month for another 100 hours… keeping
adding 100 hour blocks if you like, we’re happy to sell it to you!
Innovate
Encourage developers to really make use of the App Store,
and HomeKit. Add some spiffy devices for the home with some excellent prices –
they can be under Apple’s label, or not, as long as the company stands behind
them. Bring Siri to the next level, connect all your Apple devices through
Apple TV and make it indispensable. Support app developers with marketing , and
as the installed base grows there will many great new apps coming to the
platform.
Summary
You’ll note that I did not call for Apple to spend billions
on original content, which is something they are apparently already planning to
do. I hope that succeeds, but it will take a long time for that sort of
initiative to drive hardware sales. Also, implicit in all of this is that Apple
makes a strong marketing effort, much more than limply saying “Apple TV is
here” and expecting everyone to buy it. Apple hasn’t done that in the past,
perhaps because they realized the product wasn’t worthy of a strong marketing
push. Add in some or all of the features mentioned here, and it will be.
Do I expect Apple to do all of these things, or even some of
them? No, not really. The company seems content to let Apple TV remain a hobby.
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