Apple’s Attitude Towards the TV Industry Is Well-Founded

It’s a battle between two corporate giants. In one corner we have Apple. In the other corner is the networks. Neither side needs the other. Each side would like to gain, by agreement, from the other’s strengths. Neither side wants to give in much, thinking they know a lot about their own industry. How will it end? Which side is better prepared for the future?

The Particle Debris article of the week comes from Shalini Ramachandran and Daisuke Wakabayashi at the Wall Street Journal: “Apple’s Hard-Charging Tactics Hurt TV Expansion.” The article recounts, from sources, Apple’s recent history of (failed) negotiations with the various networks to deliver a streaming service.

In terms of reporting, the authors present an interesting story of how Apple’s Senior Vice President of Internet Software and Services Eddy Cue has approached and negotiated with network and cable executives over the years. Mr. Cue has sought to develop a new growth area for Apple that include streaming TV and set-top box services.

An underlying theme of this article is right up front. The authors declared that “In search of its new big thing, the company has alienated cable providers and networks with an assertive negotiating style; ‘time is on my side’.”

That editorial approach to the article and the hasty one-sidedness in favor of the networks and cable companies overlooks something important about Apple.

The Long Game for Apple

Apple is a company that is acutely tuned in to the trends in its own and closely related industries. While we often lament the rate of change, there is no doubt that Apple takes pride in both moving consumer electronics technology relentlessly forward and understanding trends. Apple almost always knows where the majority of its customers are headed. A recent example is Apple Music, a recognition of the shift from purchased to streamed music.

When a company that lives in the future confronts a well-entrenched and financially lucrative TV industry, there’s going to be some head-butting. The TV executives would argue that they’re not like the desperate, helpless music executives of the past. They’re wealthy and intend to stay that way. The WSJ authors note, with a bit of sarcasm:

For the past 15 years, Apple has barreled into industries from music to mobile phones, persuading established companies to go along with Apple’s way of seeing the world. In the early 2000s, Apple co-founder Steve Jobs muscled music labels into selling songs online for 99 cents apiece instead of CDs for $15. Apple gained huge influence in the music industry, which saw sales fall but found a way to battle the existential threat from digital piracy.

Conversely, one might argue that if AT&T’s CEO Randall Stephenson hadn’t gambled on the original iPhone, persuaded by Steve Jobs, that AT&T wouldn’t be where it is today. Plus, we’d all me using Motorola RAZR 3s and BlackBerrys.

What’s really at stake is which of these entities can move into the future the fastest with the most grace, technology and consumer appeal. Clearly, the trend is toward a different kind of TV viewer experience and character of the content. Apple, in part, drives the underlying technology. On the other hand, not many see vast technical expertise being displayed by the TV industry. Nor do many foresee a healthy future of TV delivered over coaxial cables to DVRs and mass market, mediocre content obliterated by 18 minutes of advertising per hour.

Network TV is still riding the wave of an advertising model developed in the 1950s. It’s been refined, rationalized and milked into a giant industry today.  However, it’s beginning to show signs of cracking. When customer prices are raised not because of a better product but because of an implicit tradition of showing growth on the backs of the customer, the customer rebels.

In particular, Apple wanted to freeze for several years the monthly rate per viewer it would pay to license Disney channels. TV channels usually get annual rate increases and rely on them to fuel profit growth.

For example, for a long time now, the Holy Grail of the cable TV industry was to get all monthly bills to US$100 and then go beyond that. Contrast that to many who find that $9 for a monthly Netflix subscription provides all they need. The only reason more people haven’t cut the cord is because they’ve been maneuvered into difficulties and impediments. That will change.

Apple’s Recourse

The disruption of the TV industry has started, and it isn’t going stop. Apple’s Eddy Cue knows this, and that’s why he is reported to have told some media executives:

Time is on my side.

It really is. Reading between the lines, the WSJ authors cast this remark as arrogance. But it really does reflect Apple’s approach. A related industry can move into the future along with Apple, whether engaging with iPhones, iPads, health management or music. Or Apple can figure out for itself how to navigate forward until the more backwards players finally see the handwriting on the wall.

Eddy Cue’s patience has likely worn thin. Apple has tremendous prestige, influence, technical acumen and financial resources. My money is on Apple to take us forward.

Next page: The Tech News Debris for the Week of July 25th. Are you a robot and don’t know it yet?

Page 2 – The Tech News Debris for the Week of July 25th

Are you a robot and don’t know it yet?

Look around. People are walking around, staring at their iPhones, mesmerized by messages from friends, reading entertainer gossip, glued to YouTube videos or immersed in Pokémon GO. Is this robotic behavior slowly replacing typical human behavior? This next article title is intriguing: “Instead of asking, ‘are robots becoming more human?’ we need to ask ‘are humans becoming more robotic?’”

But Brett Frischmann, professor at Cardozo law school, and Evan Selinger, philosophy professor at Rochester Institute of Technology, argue that we need an inverse Turing Test to determine to what extent humans are becoming indistinguishable from machines. Frischmann, who has published a paper on the subject, says that changes in technology and our environment are slowly, but surely, making humans more machine-like.

Star Trek’s Lt Cmdr Data

An interesting question to ask oneself is: “Does the behavior I just now exhibited identify me as a human being or as an emerging robot?” A great example is when some people see another helpless person being assaulted and they stand around gawking, taking videos with a smartphone.

Another aspect of this is the very design of the smartphone. It’s a digital device with a display that can be touched and manipulated in specific ways.  That places inherent constraints on how we think and act when using the device. It ropes us in, so to speak, to its own way of doing things. As a computer tends to do. Are we becoming Borged?

Could there someday be a reversal?  That is, could some artificial beings, like the fictional Lt. Commander Data of Star Trek fame end up acting more human, by intentional programming, than some humans who are under the influence of external technology?

After all, we tend to think of “being human” as being superior to any machine. What if the essence of being the superior being is slowly lost, by our own devising, while artificial beings gain the advantages that made us what we used to be? Could that be a thing in 20 years?  How would humans, in concert with advancing technology, stop that reversal from happening?  Is it even possible? Would we even have access to the tools we need as corporations seek to exploit us, turning us into automatons, for their own advantage?

Humans could end up being helpless to stop the reversal.

I’ll leave all this for you to ponder.

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Jean-Louis Gassée, in one of his typically brilliant Monday Notes, recounts the path to success for ARM: “ARM: The $32B Pivot and Revolution.” It’s great background and explains why:

“Japanese telecommunications company SoftBank wants to acquire ARM Holdings for $32B, a valuation that is a testament to ARM’s rise to the pinnacle of the microprocessor world.”

This article also rekindles speculation about Apple, someday, moving the Mac from Intel to ARM. It would be a massive, challenging endeavor. But Apple did it before, moving from Motorola to PowerPC, then PowerPC to Intel. Apple could do it again.

There’s a close relationship between the technology that Apple delivers and science. While Apple’s technical development leans more towards applied R&D and many scientific developments are derived from pure research, there is always some blurring of the line.

A notable example of how the consumer marketplace can go astray in its technical understanding of what Apple achieves is the recent Apple vs. FBI kerfuffle. Namely, a naive meme emerged that Apple was inappropriately blocking the progress of law enforcement. Social media fans these flames of misunderstanding.

While not strictly focused on technology discourse, this article explains, in parallel, how scientific information is equally distorted. One method is the over-simplification of science (or technology) amplified and permeated by social media.

We see these aspects often in the analysis of Apple and the technology we use daily. And so I present: “How social media can distort and misinform when communicating science.”

Most of us have lived through the migration from analog cell phones to 2G, then 3G then 4G and LTE. Now, 5G is coming. What will it be like? Very different it seems. Mark Lowenstein at tech.pinions explains it all in this splendid introduction: “5G Reality Check.”

Finally, is there something intrinsically satisfying about a book made of paper? Is it fundamentally satisfying to congregate in a bookstore and leaf through a prospective book? Has a saturation and satisfaction level been reached with eBooks? Has the book industry reacted to seeing their industry being crushed by Amazon and the remaining chains? Can indie stores still thrive? These questions are posed and a fascinating discussion ensues in this excellent essay by Glenn Fleishman “Technology killed bookstore chains. Can technology save indie bookstores?”

But after years of shrinking sales and locations, indie stores have seen a slightly accelerating tick upwards since 2009 in new businesses, more stores, a bigger slice of the retailing pie, and a growth in overall revenue.

I make a conscious decision about which books I want to have on Kindle and which ones I want on paper. How I do that, I haven’t yet figured out. Perhaps others have reached a similar kind of equilibrium as well. The above article offers some insights.

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Particle Debris is a generally a mix of John Martellaro’s observations and opinions about a standout event or article of the week (preamble on page one) followed on page two by a discussion of articles that didn’t make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.

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