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Apple TV: The Stuff Dreams Are Made Of

Stocks in this article: AAPL DIS

5. Pricing: Viewers would pay for each piece, with optional packages available. Prices would vary depending on the content, with some set standard for a movie-length, a one-hour show and a half-hour show.

With all that in place at the outset, Apple could compete with TV as know it. It could completely disrupt the home viewing space in five years, dominate it in 10.

Dream, Dream, Dream

As I said, all hypothetical, pure speculation, unburdened by any evidence whatsoever. But it is not my own invention.

In fact, it should sound to you like a familiar strategy. That's exactly what Apple did with the iPod.

All that vision, the groundwork, the ecosystem, was in place the day iPod rocked the crowd in a simple presentation in 2001. Everything that happened later was just sauce for the goose.

iTunes is already capable of functioning as a large-scale TV-on-demand broadcaster. The interface would have to be different to conform to the new device, but the infrastructure would be the same.

The professional relationships with content owners also already exist. Jobs was CEO at Pixar, after all, and Apple's cultural ties to the film industry are deep.

Still, negotiations for exclusive content would be a huge obstacle. When the iPod and iTunes came along music labels and artists were faced with a technological revolution that was decimating CD sales. iTunes was far from an easy sell, but the writing was on the wall for some kind of organized online music distribution.

By contrast, the film and TV studios are a lot less motivated and a lot more wary of giving up any control over their products. They've already developed strategies for dealing with the online threat, strategies that appear to be working quite well, thank you very much.

On the other hand, if Apple can prove it can enhance marketing and revenue, they're not going to say no.

There were some notable holdouts to iTunes, big brands with strong, exclusive control over their products: The Beatles and Frank Zappa were two. Both are on iTunes now, eventually persuaded by the dominance of the platform and careful, individualized negotiations.

The company, the platform, the artists and the audience are all better for it.

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