Apple announced yesterday that it was introducing a 4K HDR version of its set top box, but that’s far from the most interesting aspect of Apple TV.
The $179 hardware upgrade wasn’t so much an enhancement as it was a necessary action. Roku’s $60 set top box offers the same specs as the new Apple TV. A $70 Chromecast will also let users stream in 4K if their TV supports it. Offering a 4K HDR set top box doesn’t give Apple an edge; it just keeps them in the game.
The important gesture that Apple roped into its short segment on the Apple TV wasn’t technology, it was content. Apple confirmed that some of Hollywood’s biggest studios would bring their new 4K films to iTunes — available on the Apple TV — and Apple would offer free 4K HDR upgrades to those who already purchased eligible movies in an HD format.
That shows a couple of things: Apple isn’t walking away from the Apple TV just yet and, more importantly, Apple is building relationships with as many studios and networks as possible.
Eddy Cue, Apple’s senior vice president of internet software and services, announced yesterday that an Amazon TV app would be available in the coming months, signaling a truce in the age-old war between the two tech giants. The app isn’t available just yet, but Apple is excited about bringing Amazon Channels series to the Apple TV. Partner that with Apple’s ongoing relationships with Netflix or ESPN and there’s one very clear message that can be taken away from yesterday’s keynote:
Apple will be chummy with any studio or network before diving into the content game itself.
There’s no question Apple wants to enter the content race. With three series already in play — Planet of the Apps, Carpool Karaoke and Vital Signs — and multiple Sony TV and Sony Pictures executives coming aboard, the question is when Apple will make its push into mainstream content, not if.
In February, Apple CEO Tim Cook confirmed that Apple’s services division (Apple Music, Games, the App Store, etc) brought in more than $3 billion in revenue. Because of that success, Cook said he wants to double the revenue in that sector by offering more exclusives in streaming.
“Services are becoming a larger part of our business and we expect the revenues to be the size of a Fortune 100 company this year,” Cook said.
Cook’s statements back up a report from the Wall Street Journal in January that said the company was looking to deliver premium television content through Apple Music. Instead of creating a new app, those who pay $9.99 a month for Apple Music would have access to whatever original series Apple also creates and distributes.
Since Cook’s comments and the Wall Street Journal’s report, there have been rumors that Apple wanted to create its own version of Breaking Bad and was in a bidding war with Amazon for the distribution rights to future James Bond movies, once Sony’s contract ends this year. Imagine waking up one morning and having the new James Bond movie ready for free as part of your Apple Music subscription?
It’s not that farfetched; and unlike the U2 fiasco in 2014, waking up to a free James Bond movie in your Apple Music queue might lead to a beautiful day.
This is the other important factor in the equation to keep in mind: Apple can use its content development and exclusive series to help sell Apple TV boxsets. Remember when the first iPod launched? Steve Jobs’ goal was to sell iPods by hooking people with iTunes. When iTunes was eventually made available for Windows users — the first Apple app to ever do so — the iPod saw an increase in sales.
Why can’t the same thing happen for television? Well, it can.
Let’s say Apple wins the distribution rights to James Bond. The company is still going to bring the movie to theaters, but what about the digital rights? Apple could keep it to iTunes and make it an Apple exclusive title. For those who don’t want to buy a DVD or Blu-ray copy and don’t want to watch the film on their iPad, having a 4K HDR Apple TV set top box isn’t just the best way to watch it, it’s also the only way.
Apple understands this better than anyone else. They’ve implemented this with iTunes and the iPod. While Apple may not revolutionize the television industry the same way it did the music industry — the Apple TV is not going to be the iPod — what Apple’s devotion to its TV and services means is very exciting.