Apr 18, 2012
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It has been rumoured for quite sometime now that Apple is going to target Hollywood and the Television networks as it’s next major industry to disrupt. Whilst Apple’s growing dominance in technology and it’s related industries is becoming increasingly monopolistic, I believe it is in the consumers best interest for a single player to take the lead in disrupting the huge incumbent entertainment industry. Apple is now best positioned to disrupt the entertainment industry because no other single entity has the infrastructure, penetration and resources that Apple do. Although I don’t like to see any one company with too much power, it is in the best interest of the consumer to use the technological advances we have gained over the last couple of years to provide a better all round experience.
It is no secret that Hollywood and the Television Networks have already been seriously disrupted by the Internet as a new medium for content delivery. For 50 years, Hollywood controlled the film making process and how consumers could consume films and entertainment. Through Cinemas, and then through Videos and DVDs, this was a nice, money making opportunity that was completely controlled by Hollywood executives. But much like Radio, Video and then DVD before it, the Internet offered a disruptive way to deliver and consume content. With peer-to-peer networking, consumers could now share content through decentralised networks, completely out of the control of Hollywood.
Much like Hollywood, Television is another industry that has been broken by the Internet. For years, Television planning was controlled by gatekeepers that decided what got aired. But with the huge surge in broadband capabilities and the rise and fragmentation of Internet Television, Television executives are clutching at straws to maintain control over their industry.
After years of legal action, failed technologies to try and limit online sharing and a number of failed initiatives to try and stop people consuming content outside the grips of the incumbent gatekeepers, we have finally reached a place where there are a number of key players trying to become the de facto entertainment service. Services such as Netflix, Hulu and of course Apple’s iTunes all offer a way of to watch the latest films and Televisions shows online and through non-television devices. However, there is no perfect solution and each service fails to deliver the entire breadth of the content available due to licensing and agreement regulations.
We currently find ourselves in a fragmented marketplace of choice between different competing services. Competition is usually a good thing for the consumer, but in this case the consumer is left having to use at least two services to find the content they want to view. Whilst competition is good for prices and service, in this instance, it is holding back the consumers overall experience by not allowing an “all you can eat - all in one - service”.
Apple heralded in the post-PC era with the iPhone and the iPad and have left competitors struggling to match their post-PC devices. The strategy of having an integrated system, where Apple control, not only the hardware and software but the entire infrastructure of content, has flourished in the last couple of years. Apple now have a complete end-to-end solution for providing an entertainment hub that is far more than just a computer. And with iTunes and the App Store, Apple already have millions of users ready to buy content with a single click. Apple’s solution is by far, more elegant than any other competing proposition.
Apple are also ready to add another weapon to the arsenal with their rumoured “iTV” device that will also integrate into Apple’s ecosystem.
Whilst it isn’t close to being a perfect solution, it does offer the best hope for a complete entertainment system that allows consumers an all you can eat package of movies and television. The current system of individual companies fighting for the individual rights to content clearly isn’t working. It will take a company of Apple’s size and strength to force the content gatekeepers into providing their content in digital form. If Apple were to win this fight, where would it leave the likes of Netflix?
We’ve seen this problem in the past between proprietary technology formats like VHS vs Betamax and HD vs Blu-ray. However this time it is gone a level higher than format as we’ve now entered the realm of digital distribution. Despite the need for an open marketplace, perhaps the best route forward is for a clear winner to emerge. This way the consumer can invest into one package and have the piece of mind that they can consume whatever content they want through one system.
Ofcourse this whole post has been an opinionated piece on why I think Apple should emerge has the clear victor. However there will be many not wanting to buy into Apple’s ecosystem. The case remains however, that there needs to be a clear market leader if this form of content consumption will ever reach the mass market.
How do you think future of content consumption will play out? And who do you think will emerge as the market leader?