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Apple TV Perspectives for Networks on the "Future of TV"

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As with most Apple announcements, there’s been a huge amount of ink spilled over the pages of the tech press in the week following it. But this time around the furor, hyperbole and confusion has extended more than usual into the pages of the media press.

Apple TV – branded as the "Future of TV” by a typically self-effacing Tim Cook is here to reshape how we watch programming in “the way that only Apple can”.

But amid the boasts and counter-claims, there remains a decent chance that Apple TV will represent both risk and opportunity for content producers and the networks that broadcast them. What these risks and opportunities are are certainly, even if not business-critical today, likely indicative of what’s coming in this rapidly-changing market, and networks should pay very close attention to how they match their strategy to this new development.

In this short paper, we identify the key areas of thinking that networks should have front-of-mind as the new generation of Apple TV starts to take over living rooms worldwide.

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Apple TV Perspectives for Networks on the "Future of TV"

  1. 1. TV Perspectives for Networks on the “Future of TV” Much has been written in the short time since Apple’s announcement of its new Apple TV device and accompanying tvOS. Of this, a fair amount is hyperbole, predicting the demise of various players from across the TV industry, and all manner of shake-ups, revolutions and reinventions of the industry have been threatened. At this point, we don’t want to get into any more grandstanding about the state of the industry. Rather, we want to delve into the immediate significance of the announcement for our many clients in and around the TV industry. Clearly these are very early days, and as the dust settles, we’re working with the new tvOS to establish new principles of development and design. But for now, the following are the main areas for immediate focus: “Apple TV may trigger a broad rethink of a revenue- generation model that is already in flux.”
  2. 2. Rebuild, redesign Like  it  or  not,  anyone  with  a  current  Apple  TV  offering  is  in     for  a  frustra:ng  period  in  their  digital  evolu:on.  The  new     tvOS  requires  a  whole  new  app  to  be  built  for  the  new   hardware  and  app  store,  while  you  will  inevitably  need  to   con:nue  to  support  content  fed  to  older  Apple  TV  devices.         This  will  doubtless  cause  irrita:on  to  networks  with   ongoing  Apple  TV  projects,  which  have  instantly  lost  close   to  all  of  their  value.       There’s  also  a  new  set  of  design  standards  to  cater  to.  One   example  is  the  new  set  of  icons  which  are  no  longer  flat,   but  require  two-­‐to-­‐five  layers  of  depth  to  support  the   anima:on.  New  gestures,  voice,  the  quasi-­‐parallax   anima:ons,  and  a  variety  of  new  touch-­‐and-­‐:lt  commands   related  to  the  new  remote  will  need  to  be  considered.   It’s not just tvOS While  the  app  itself  is  wrapped  inside  a  tvOS  app  (which  is   broadly  similar  to  iOS  using  SwiL),  much  of  the  body  in  the   app  is  made  up  of  old-­‐fashioned  HTML  and  JavaScript.  This   may  be  to  make  sure  all  channels  feel  familiar  to  users.   While  it  may  seem  like  this  opens  up  avenues  for  efficiency   through  code  reuse,  the  new  templates  and  markup  have   changed  significantly,  making  a  full  rewrite  necessary.       So  those  companies  with  in-­‐house  mobile  development   teams  will  also  have  to  augment  their  programs  with  front-­‐ end  web  developers.     Own the schedule With  the  advent  of  the  app  economy,  many  prac:ces  that   have  emerged  over  recent  years  on  mobile  can  be  ported   to  TV.  Any  contact  you  can  have  with  a  consumer  is  now   that  much  more  integrated  with  their  actual  watching  of  a   given  TV  show.       Chief  among  these  interac:ons  may  be  no:fica:ons.   Whether  we  like  it  or  not,  most  fans  don’t  associate  a   show  with  either  its  producer  or  its  distributor.  When  a   show  is  top-­‐of-­‐mind,  Apple’s  search  func:on  is  useful,  but   oLen  shows  fly  under  the  radar  aLer  the  first  season.       No:fica:ons  will  provide  an  opportune  way  to  alert   viewers  to  shows  they’ve  seen  before,  no  longer  leaving   crucial  prompts  to  the  whim  of  cable  companies  or  media.     Rethinking revenue If  Apple  TV  and  the  app  model  take  off  as  Apple  hopes,   there  may  have  to  be  a  broader  rethink  of  the  adver:sing   and  revenue-­‐genera:on  model  that  is  already  in  a  state  of   flux.  Currently,  the  focus  is  almost  exclusively  on  eyeballs   and  viewers  of  linear  content.  Networks,  however,  will   have  to  take  digital  repor:ng  much  more  seriously  and   integrate  viewing  figures  from  another  major  source.     The  jury  must  s:ll  be  out  on  whether  viewers  are  going  to   start  shopping  via  their  TV  as  Tim  Cook  and  company   clearly  hope.  This  uncertainty  was  demonstrated  by  the   slightly  awkward  feel  of  the  Gilt  app,  demonstrated  in  the   Apple  event.  However,  layering  purchase  opportuni:es  on   the  viewer  or  crea:ng  truly  interac:ve  commercials  could   be  a  really  powerful  new  ad  plaUorm  for  marketers,  and  a   potent  revenue  stream  to  augment  product  placement.       New  ad  formats  will  be  required:  imagine  Lexus  doing  a   deal  with  a  drama  for  product  placement.  A  viewer  could   click  the  car  with  the  remote  touchpad,  learn  about  it  or   input  data  in     a  smaller  lower  window—all  the  while  con:nuing  to  watch   the  show.     This  is  preXy  exci:ng  stuff.   Adopt an apps-first strategy While  we  should  never  take  anything  Apple  says  without  a   grain  of  salt,  the  bold  claim  that  “The  Future  of  TV  is  Apps”   is  certainly  a  portent  of  things  to  come.  Just  as  we’ve  seen   the  eleva:on  of  apps  to  be  the  primary  content  vehicle  on   mobile,  we  are  likely  to  see  the  same  for  TV—par:cularly   in  the  absence  of  anyone  pushing  a  viable  browser   solu:on.       Apps  are  likely  to  benefit,  as  with  other  devices,  from  a   concurrent  push  into  gaming  on  TV,  and  from  the   con:nua:on  of  games  and  movies  between  devices     (widely  popularized,  it  must  be  said,  by  NeUlix).       These  will  combine  to  make  apps  the  “new  normal”  for  TV   naviga:on.  This  will  likely  trigger  new  TV  behaviors  in  the   majority  of  people  who  have  never  used  any  of  the   “smart”  func:ons  on  their  TV.       This  is  good  news  for  all  content  generators,  as  the  mobile   consumer  has  been  trained  over  years  to  pay  for  content   via  the  App  Store.  So  any  OTT  offering  should  find  a  willing   base  of  consumers  with  payment  details  readily  available   to  be  converted  at  the  tap  of  a  remote.  
  3. 3. Isobar  have  been  building  leading  new  media  applica:ons  in   the  TV  space  for  over  a  decade  for  clients  including  HBO,  USA   Network,  NBCU,  MSG,  Cinemax,  Viacom,  The  History  Channel,   and  Time  Warner  Cable,  including  Apple  TV  apps!   Call us: Chris Hogue Vice President +1 646 710 0047 chris.hogue@isobar.com Tagging will be key One  of  the  worrying  aspects  of  the  new  Apple  TV  from  a   broadcaster  perspec:ve  is  the  cross-­‐app  search   func:onality,  par:cularly  with  regard  to  Siri.  An  example  of   this  problem  will  arise  when  a  user  says,  “Show  me  some   exci:ng  drama.”  In  its  release  version,  Apple  appears  to   have  indexed  the  launch  partners  (HBO,  NeUlix,  Hulu,   Show:me)  according  to  a  common  taxonomy.  To  be   searchable,  it  seems  that  your  content  will  need  to  match   up  to  this  taxonomy,  which  could  be  a  considerable  job  for   networks  with  years  of  archived  content.       The  obvious  issue  with  Apple’s  media:on  of  search  via  Siri   is  how  it  will  select  from  appropriately-­‐tagged  content  to   serve  into  those  priceless  first  couple  of  search  result   spots.  In  the  near  term,  this  could  result  in  a  coXage   industry  of  SEO  gaming  as  already  happened  in  iTunes.  It’s   not  impossible  for  Apple  to  turn  this  into  a  commercial   venture,  although  that  urge  has  so  far  been  resisted   elsewhere  in  iTunes.   Single-show apps? While  most  shows  don’t  reap  long-­‐term  passionate   interest  from  a  large  following  of  fans,  there  are  a  number   of  shows  that  do.  Content  creators  will  have  to  decide   whether  these  shows  go  it  alone  with  their  own  apps,   packing  the  video  out  with  addi:onal  content  and   features,  or  whether  to  simply  bundle  the  show  in  with  the   rest  of  their  roster.       There  are  arguments  on  both  sides.  A  single-­‐show  app  will   avoid  the  brand’s  credibility  and  the  user  experience  being   crowded  out  by  inappropriate  content  from  other  shows.   It  will  also  make  viewers  much  less  likely  to  turn  off   no:fica:ons  if  they’re  sure  that  they  will  only  receive   messages  about  shows  they  like.  Searches  for  a  show  such   as  Big  Bang  Theory  will  probably  find  results  from  at  least   three  different  networks.       How  else  can  users  know  which  network  has  all  the   episodes  or  which  has  the  newest  ones  unless  there  is  a   comprehensive  and  authorita:ve  Big  Bang  Theory  app?     On  the  other  hand,  divorcing  shows  from  the  network   might  weaken  the  overall  brand  experience  for  the   network.  This  could  be  mi:gated  by  cross-­‐promo:ons  and   links  between  the  apps,  but  it’s  another  layer  of   complexity  and  cost.   And there’s more… An  app  ideally  shouldn’t  be  just  a  player  for   video  content.  App  func:onality  provides   opportuni:es  for  many  other  types  of  content   outside  of  core  programming.  Sports  is  the   obvious  example,  with  MLB  showcasing  how   their  stats  and  mul:-­‐game  broadcast  can  add   value  to  game-­‐day.     For  shows  with  a  dynamic  fanbase  and  a  rich   trove  of  content,  an  app  can  add  a  wealth  of   value  to  keep  users  loyal  to  the  show,  generate   social-­‐media  traffic  to  proliferate  clips  and   excitement,  and  gather  data  for  other  CRM   efforts.     So  alongside  the  main  video,  it’s  going  to  be   more  important  to  consider  how  you  keep   people  around  in  the  app  environment,  which   could  be  very  profitable.  What  else  can  you  do   to  make  apps  more  compelling  and  s:cky?     A  host  of  addi:onal  content  for  apps  could   include  behind-­‐the-­‐scenes  material  and   ouXakes,  compe::ons,  social  and  community   features,  and  more.  Of  course,  as  always,   decisions  must  be  made  about  which  shows   have  the  requisite  interest  for  these  features.  

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