The concept behind Apple tv, how can build the next-generation TV..

There are two different problems to solve here — a technical problem and a business problem. The technical problem in the past was daunting: building a single box that connected to both the wide variety of cable and antenna systems in the world and the internet has never been easy, and no company has even built a successful mainstream product that way. (TiVo doesn’t count: it generates a significant percentage of revenue from software and patent licensing, not selling devices.)



Again: internet to the rescue. That problem will fade away as more and more television is piped in over IP. It’s already happening: in the two years since Jobs' comments, TV providers have built and rapidly improved apps that allow subscribers to watch content on iPads and phones, and the industry is working on moving the entire encryption and security layer of television out of hardware and into software. Your cable box will eventually just be an app — the only question is where that app will run and what it’ll look like.

That’s the business problem, and it has two basic solutions: work with the cable operators, or go directly to the networks themselves.
                                                           

OPTION 1: WORK WITH CABLE
Comcast running its guide as an app on the Apple TV doesn’t really solve any of TV’s main issues — it might even make them worse, if the various Xbox 360 TV apps are any indication. The real key, as Jobs said, is to build a consistent UI across many different functions. So Apple has to convince cable operators to basically serve up the content but let Jony Ive handle the interface, and that won’t be easy. Why? There’s a lot of money in that cable guide screen — ads, pay-per-view buttons, featured shows — and Time Warner Cable isn’t just going to give up easy cash so Apple can build a nice new interface. And even if Apple were to allow the cable company’s on-demand and pay-per-view offerings to appear, it probably wants its traditional 30 percent cut of all sales.

  TIME WARNER CABLE ISN’T JUST GOING TO GIVE UP EASY CASH SO APPLE CAN BUILD A NICE NEW INTERFACE

Oh, and all of that is just to integrate traditional cable programming into a unified interface. If Apple wants to innovate and offer per-channel a la carte pricing, it’ll have to change the entire course of TV industry history in the United States. Google found this out in Kansas City — Google Fiber users still have to buy TV packages in tiered bundles, and not all the networks have signed up yet.

If you’ve been wondering why rumors of Apple talking to cable operators have been bubbling up for over a year now and it seems like nothing’s been accomplished, well, now you know.


OPTION 2: WORK WITH CONTENT On the surface this is the more appealing option, since it avoids all the messiness of existing cable contracts and regulations — Apple can just work directly with NBC and HBO and AMC and whoever else to pipe in content, it can charge whatever it likes, and the content companies gain leverage over the cable and satellite operators. (You can bet AMC would have loved to tell frustrated Dish Network customers that Breaking Bad was airing on Apple TV while those two companies were feuding this summer.)

IF APPLE GOES DIRECT TO CONTENT PROVIDERS, IT’LL HAVE TO ACCEPT THE FACT THAT IT MAY LAUNCH A TV PRODUCT WITHOUT A FULL CHANNEL

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But going direct has challenges as well — Apple would essentially be turning itself into a cable company, after all. And instead of managing just a few major relationships with the cable providers, Apple would have to manage hundreds of relationships with content companies — companies that already have testy relationships with Apple services like the iTunes Store. Again, Google Fiber is an instructive example: Google was forced to launch without major channels like ESPN, CNN, and AMC, and it eventually had to accept the same terms as other cable operators. If Apple goes direct to content providers, it’ll have to accept the fact that it may launch a TV product without a full channel lineup.
It also bears mentioning that working outside the cable operator system means that customers will be on the hook for the increased bandwidth costs of Apple’s service. The numbers may even out for cable customers who’ll end up canceling traditional TV to use Apple’s service, but it’s a nasty hidden cost for all those cord-nevers the industry is trying to lure back.



Neither one of these options is great — and there are even more pitfalls and potential missteps than could ever be outlined here. The safe bet is that Apple will end up working with the cable operators, who have a vested interest in maintaining their existing relationships with customers, and who can potentially mitigate any bandwidth concerns as they roll out internet-based TV products. But getting everyone to the table and managing these negotiations will require a Jobs-like force of personality — it’s a task potentially more difficult than convincing the music industry to launch the iTunes Music Store or convincing AT&T to launch the original iPhone. Those were products that launched on a small scale to limited markets in ways that didn’t disrupt the status quo if they failed — they were medium-risk bets that paid off handsomely for everyone involved. And their success begat more success: more labels joined iTunes, and more carriers got the iPhone. Rebooting the TV business is different — it’s a high-risk bet that only pays off if it completely and immediately upends the entire industry. That’s not an easy sell, but it’s up to Tim Cook to make it happen.

REBOOTING THE TV BUSINESS IS A HIGH-RISK BET THAT ONLY PAYS OFF IF IT COMPLETELY AND IMMEDIATELY UPENDS THE ENTIRE INDUSTRY

That’s not to say the opportunity isn’t there — for Apple or whoever rises to the challenge. We’re witnessing a unique inflection point for the TV industry: it’s generating some of the best programming in television history while the relationship between cable operators and content companies heads towards a cliff. Both sides say they’re at the mercy of the other in negotiations, and neither seems willing to compromise with the other. That’s an enormous opportunity for a player like Apple to step in and provide a new and disruptive way of serving the massive consumer demand for shows like Homeland and Game of Thrones while improving the overall experience of television. And it can’t sit still: Google and Microsoft and Samsung are quickly making their own moves, and they’re seeing some success. No one’s waiting for Cupertino to beat the industry to another iPhone or iPad this time around.

Time and the power of the internet are resolving television’s go-to-market problem. Now it’s just a question of when and how Apple will finally make its move.