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News
Hi, I’m An Apple TV. Hi, I’m a Cable TV
Thursday, March 22nd, 2007 at 4:00 PM - by John Martellaro
The key to market success in a product like the Apple TV usually revolves around an insightful understanding of what customers really want, according to Blackfriars Marketing.
TV business models for the past 50 years have relied upon:
- Advertising Support
- Prime-time programming
- Bundled content
The last item refers to cable companies who charge high prices for a line up that includes channels that customers just never watch.
In contrast, "Apple TV is about to attack the fundamental assumptions underpinning the TV business just as the iPod cut the legs out from under CDs and radio stations," Carl Howe wrote.
In Apples new model, consumers will:
- Vote for programming with dollars
- Watch what they want when they want
- Enjoy TV programming a la carte
One of the key issues is how customers will control their TV costs. Everyone knows that cable and satellite prices keep going up. However, with the flood of video content upon us, the value of each video is becoming marginal. When cable companies keep their prices high, the consumer has no way out of that, and Apple believes that consumers will defect to a system where they pay only for the content they watch.
"That trend will call into question the returns on investment expected for $200 billion fiber rollouts," Mr. Howe explained.
But this wont happen overnight. "The iPod took five years before it was an international phenomenon," the author wrote. "I expect Apple TV to have a similarly long gestation period before it becomes a icon in living rooms and a part of the American consumer lifestyle."
And when it does, cable and telco executives will wonder how it all slipped away from them. The answer lies in Apples unique insight into what customers really want.
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