The biggest wireless carriers have spent billions upgrading their networks to try and have an edge providing better services to their data hungry users.
It's hard not to think the same kind of tsunami might be getting ready to hit the television industry with the introduction of Apple TV. Some, including Henry Blodget, are playing up the changes by suggesting the traditional TV industry is about to collapse. Others, such as Dan Frommer, think cable and traditional TV are too powerful to succumb to any changes Apple might throw at it.
The reality will probably come in between, just as has been the case in the telecom industry.
In the TV industry, there's the other TV set makers, the other streamers, the cable companies/networks (aren't they one and the same now?) and the content producers.The TV makers appear to be ready to reprise the role of the handset makers, struggling to make a profit. Apple has the advantage of already locking up long-term supply contracts. It'll also be able to charge decent margins or (more frightening for competitors) take a more aggressive approach, as with the iPad. And unlike the competitors they don't have to give up any of their margins to the Best Buys (BBY) of the world -- glorified middlemen. Apple sells it all direct -- online or through their network of stores. The streamers also look like they'll have a hard time competing. Apple can offer content producers a great platform with lots of subscribers. At the end of the day, that's what Hollywood wants. If the price for content goes up, Apple can belly up to the bar. Hollywood seems ambivalent about Apple TV. It sees what the 99-cent deal did to the music industry a dozen years ago and doesn't want to make the same mistake. Yet it also sees a world moving toward four screens (TV, PC, phone and tablet) and increasingly mobile. It knows HBO Go is the start of something, with or without Apple. But, at the end of the day, it'll be the content people want to see. Hollywood can either go ultra-premium (think Game of Thrones) or low-cost reality show. There will also be millions of iJustines fighting for attention. Most people seem to think the cable companies and networks will be destroyed by Apple pushing an a la carte model. Yet, it's tough for me to see that Apple would be intent on killing ABC and Disney (DIS) when Bob Iger sits on Apple's board and Steve Jobs' estate is the biggest owner of Disney stock. Disney has also signed a 10-year deal for ESPN with Comcast (CMCSA) recently. So, I think Apple is going to be playing for the long term with TV. It's not about "killing" an entire industry. It's about delivering the best TV experience anyone has ever had. It probably means lots of help from Siri making suggestions for you. It probably does mean the "app-ification" of TV channels. It probably means the deep integration of Twitter and Facebook (FB) into the TV experience. Mostly it probably means better software and artificial intelligence than any TV maker has ever seen before. But make no mistake, five years from now, the television industry will be as deeply affected by the arrival as the telecom industry is today. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV