AUGUST 30, 2012 — The End is Near! The End is Near!
So what is ending? The traditional TV delivery model courtesy of your cable or satellite provider. With the news that HBO will now allow its content to be streamed free of any cable subscription in some Nordic countries, Microsoft and Apple must be pretty excited. True, that excitement is likely tempered given that it’s only one content provider and only in some European regions, BUT, it’s the type of significant, incremental first step in the direction of “breaking” the old model with an over-the-top service offering.
Why is this exciting for Microsoft and Apple?
Microsoft could try and sign a deal with HBO to offer its content via the next-gen Xbox 720, via its Windows 8 tablets/PCs as well as for Windows Phone. To be clear, this would likely be one of many different flavors of offers from Microsoft as part of its efforts to drive higher next-gen box adoption past the 70MM or so Xbox 360s in households today. One flavor for the current Xbox 360 has been a partnership with BSkyB in the UK. Another flavor (and experiment) is the current offering of a $99 Xbox 360 with a two-year Xbox Live subscription in the U.S.. Net-net, Microsoft is not afraid to experiment with different business model approaches for different regions, and that no one-size-fits all will likely continue with the Xbox 720.
Apple has been a great target of rumors and speculation about any/all future products, including a rumored future generation of Apple TV. There is also a working principle that Apple typically doesn’t do anything typical, so the concept of Apple TV may not be anything typically TV-like. One school of thought is that Apple would avoid having to work with a traditional cable or satellite service provider and, if HBO is considering broadening the markets for its non-cable, I believe Apple would be excited to discuss further.
The only caveat to this story is easy: history could repeat itself. The music industry begun experimenting with digital music service models in 1999, and now in 2012, there are less than a handful of widely successful, popular, heavily subscribed services. The big record labels, Warner, EMI, Sony, Universal, etc., moved one tiny toe at a time into the water of digital offerings, and hopefully, the content creators on the TV/movie side don’t follow that path. If they do, we’ll still be talking about OTT evolving in 2025. Let’s hope not.
(Missives from the Digital Front is a series of opinions and thoughts, sometimes with a bit of snark, and don’t qualify as a research post. Consider this a blog courtesy of P.J. McNealy.)