Apple and Google’s Brewing TV Battle
Apple is on a collision course to battle Google in the television market, as the battle to bring content to living rooms heats up.
Apple is talking with Time Warner Cable and other major cable companies about providing a set-top service using Apple devices, according to the Wall Street Journal. And since Google is also making inroads to break into the TV market, another conflict between the mobile rivals is in the works, this time over establishing footholds in the television business.
News that Apple CEO Tim Cook met with a Time Warner executive follows earlier reports of Apple executives talking to phone carriers in the U.S. and cable companies in Canada about making moves into television, indicating plans have kept brewing for a while. These talks could help Apple tweak its set-top box so it is compatible with current cable services, suggesting the company is trying to enhance already established cable packages, and not compete with a whole new service.
In addition to cable, viewers want streaming television services. However, licensing content has been difficult, creating a messy, fragmented jumble of varied incomplete services like Hulu and Netflix. The company that can develop a more cohesive streaming roster, will significantly change the market. Both Apple and Google are both working towards the same goal at the same time, so they may take their mobile rivalry into a new arena.
It’s not clear if Apple plans to use a version of its current Apple TV or if it intends to create a new gadget, but either way, the negotiations underline how grabbing hold of TV is part of the company’s vision for the future.
You Want Your Google TV?
Television is also part of Google’s vision. The search giant already began testing television services in Kansas City, Mo., and since it purchased Motorola, Google can make set-top hardware.
Apple doesn’t have a test market up yet, since it is still taking the first steps with the cable providers. Talks with providers could lead to subsidized set-top boxes, just as mobile carriers agreed to subsidize iPhone costs, but that depends on how amenable cable companies are to Apple.
When Apple secured deals with music industry scions for iTunes and publishers for its e-reading business, the tech giant overcame initial resistance, so even though it may take a long time, Apple is likely to prove tenacious as it moves forward.
In addition to meeting with cable providers, Apple has beefed up its licensed content, relying on the same tough negotiation strategy that worked in the music and publishing industries. If those hardball negotiations with content providers offer any clues to Apple’s overall approach to TV, the company will likely assume a similarly demanding stance in talks with cable providers. As a result, Apple’s reluctance to compromise may give Google the edge in winning over cable companies.
Still, Apple has a few advantages over Google. Apple has a partnership with Netflix, offering integrated services, which will help it attract customers. The Cupertino company is also talking to other streaming services, suggesting it wants to increase the amount of content it offers. And even though the Apple TV device is not a top-seller for the company, which calls Apple TV a “hobby” for it, it is popular and can serve as a good blueprint for the next-generation set-top box.
Apple could give Google a run for its money as both companies attempt to offer an alternative to traditional cable.
The Unknown Quantity: Cable Companies
Cable companies, however, may prove amenable to Apple, especially as the industry grapples with how to move into the digital-connection age without destablizing its existing subscription services. An Apple set-top box with cable-TV capabilities would help providers keep and even boost subscriber numbers while likely giving consumers access to a wealth of online video content. With the move to bring smartphone-like connectivity to the living room, an Apple TV device could bring together the best of legacy broadcast services with streaming today.
Still, cable companies are highly protective of their subscription business, and could prove equally tough at the negotiating table with Apple. They may also be wary of letting Apple gain power in their industry, having witnessed Apple’s own history with record labels. Its iTunes store created a powerful platform for selling digital music, but music execs have chafed under Apple’s reign at times, particularly concerning pricing and formats.
But without Steve Jobs around to finesse seemingly impossible deals, which is what happened with iTunes and the music industry, Apple may not get what it wants out of the major cable companies, throwing a wrench in its plans and giving Google one less rival as it makes inroads in television. But the race to bring streaming and connected video to the living room is heating up, and the field should see a lot of movement in the next year.
