Home' Technology Review : March April 2013 Contents 43
50 DISRUPTIVE COMPANIES 2013
MIT TECHNOLOGY REVIEW
from Apple’s own Remote to personalized programming guides
such as NextGuide are turning them into far more capable portals
into the TV than cable remote controls. In fact, Ben Reitzes, an
analyst at the investment bank Barclays, believes that Apple’s TV
strategy actually revolves less around the TV set than around the
iPad as universal remote. He thinks the appeal of an iPad remote
would help maintain Apple’s tablet dominance, especially as the
company extends iPads to become a “central command” for lights,
heating systems, and other features of the digital home.
A potentially much bigger advantage for Apple is a feature
called AirPlay in the latest Mac and mobile iOS software. It
allows whatever is showing on Macs, iPhones, and iPads to be
“mirrored” to a TV set. Although not many iOS television apps
support AirPlay yet, viewers can use Macs sold since mid-2011
to mirror shows from the free Hulu site, network websites, and
even—perish the thought—pirate video sites. Suddenly, viewers
can watch a lot of current shows on their HDTVs quickly and
wirelessly—and, most important, without a cable subscription.
What Apple Still Needs
ut Apple isn’t likely to disrupt the TV business solely by
helping people get around the traditional cable and sat-
ellite providers. Instead, it will try to work with them—
and give them an incentive to come along. Stewart
Alsop, a partner in the VC firm Alsop Louie Partners and a for-
mer member of TiVo’s board, says Apple could use a tough-love
approach: “Apple is the one company in the world that’s pow-
erful enough to take on monopolies and force them to change.”
Making friends with them has proved to be Apple’s most
difficult challenge so far—and a solution is hard to discern. A
few media conglomerates that run cable and broadcast chan-
nels, such as Walt Disney, Time Warner, and Viacom, remain
extremely profitable. TV advertising generates $72 billion annu-
ally in the United States alone. Plus, the cable and satellite opera-
tors that distribute programming to homes gross $103 billion a
year in pay TV subscriptions, sending $28 billion of that back
to the media companies. Pay TV operators such as Comcast are
also large Internet service providers, giving them influence over
how far online TV services can go.
So unlike music labels before them—which were weakened
by piracy and thus were more willing to grant Apple the right
to sell individual songs for 99 cents apiece—they have no need
to sell their content cheap. In particular, producers won’t give
Apple access to their live shows without a guarantee of the same
big bucks they get from cable and satellite operators. The TV
companies are wary of even letting Apple create a new TV user
interface for their customers, the key to making an Apple televi-
sion something special.
The classic Apple approach to such a situation would be to
come up with a superior, or at least more elegant, product and
force companies in related fields to play along. But Apple used to
do that by having Steve Jobs charm and cajole recalcitrant part-
ners. Jobs also understood the entertainment business and knew
the players. He built Pixar into one of the world’s most successful
movie studios, then served on Disney’s board after Disney bought
Pixar in 2006. And even he struggled to persuade TV companies.
CBS CEO Leslie Moonves, for one, said he rejected overtures in
2011 by Jobs himself for an Apple TV subscription service. Today,
Eddy Cue, Apple’s senior vice president of Internet software and
services, is the company’s most important TV dealmaker.
So how can Apple get more leverage and force the pay TV
industry to deal? One possibility is that the troika of iPads, Apple
TV, and the TV set—made by Apple or not—could bring about
even more sweeping changes to make the television-watching
experience more interactive. Google tried to do something simi-
lar two years ago with its Google TV service, but at least initially
the results were too geeky, requiring a keyboard and clunky
navigation. Its recently introduced voice-driven remote control
feature, using Android smartphones and tablets, only under-
scores the fact that people want a less brain-taxing experience
in the living room.
But a new generation of “dual-screen” apps could provide the
best of both traditional TV and the Internet, says Jeremy Allaire,
chairman of Brightcove, a provider of online video services.
Major League Baseball’s iPad app, for instance, plays a game on
the TV through Apple TV while you check out relevant stats and
chat with friends on your tablet. Essentially, says Allaire, whose
company helps software developers create these apps, iPads and
iPhones serve as the real brains of the TV.
Apple could also let people use voice-driven commands to
find shows and change channels using Siri, its intelligent per-
sonal assistant. You could toss that annoying cable remote and
just tell your TV what you want to watch. Moreover, Apple’s
iCloud storage service could be used as a digital video recorder
in the sky, as Jobs hinted to Isaacson. Already iCloud can store
TV shows bought on iTunes and feed them to any Apple device.
If such enhancements make Apple TV ever more useful,
then “at some point, the growing Apple TV installed base will
PUBLIC | FOUNDED: 1992
Creating new applications for
speech recognition technology,
from cars to video games.
PUBLIC | FOUNDED: 1938
Leading the market for smart-
phones and making a tablet
that is one of the few credible
challengers to the iPad.
PRIVATE | FOUNDED: 2008
Broadening the use of robot-
ics in manufacturing. Its robots
are easily taught and can work
safely alongside humans.
PRIVATE | FOUNDED: 2009
Streamlining transactions. A
Square mobile app lets you pay
for things just by speaking your
name to a store clerk.
2/5/13 4:43 PM
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