As consumers watch TV on a widening range of screens and devices, every player in the mobile and media value chain is battling to own the user experience, and therefore be in pole position to shape the business model. No contender has every weapon in place, so each has to play to its existing strengths. In Apple’s case, that means building on its apps ecosystem to mask its limited number of content deals; for Verizon, by contrast, it means harnessing its mobile network and integrating AOL’s advertising platform as rapidly as possible.
Both these companies launched new TV offerings in the past week and they epitomize the battle between device platforms and network providers, to own a TV experience increasingly driven by mobility and multiscreen.
Along with its new iPhones and iPad Pro, Apple introduced tvOS, its latest attempt to achieve the TV dominance which has eluded it so far. Rather than chasing Amazon down the road of original content, Apple looks set to focus on making its Apple TV net tops into a broader home hub, and anchoring it firmly in its iOS applications ecosystem.
So, for the first time, Apple TV has a store and third party games and apps can be used on the big screen. That opens the way to an even broader platform integrating other Apple software frameworks such as HomeKit and HealthKit.
“We believe the future of TV is apps,” said CEO Tim Cook at the launch event. By adding an app store to Apple TV, the focus is taken away from content wars, and placed on a dream which the vendor understands far better – bringing its much-loved mobile user experience to every activity in the home.
With tvOS, Apple unveiled the latest version of the Apple TV net top and a Siri-enabled remote control with touch sensitive capabilities – another clear sign of the mobile experience expanding to the living room (and car). The Siri remote is also a partial response to Amazon’s voice-activated assistant device, Echo, and Microsoft’s Xbox Kinect.
Both these companies are also in the race to evolve standalone services into a full smart home offering – Microsoft by extending the capabilities of Xbox, its only successful hardware; Amazon by integrating Echo, TV and future IoT introductions.
It is not, however, a strong response to Google’s own growing multi-purpose platform, built around Chrome as well as Android. The Chromecast streaming stick is far cheaper than the new Apple TV, which now costs $149 for a 32GB model and $199 for 64GB. And Google is already bringing its own apps ecosystems to the big screen via Android (which now has more than 600 dedicated applications), and has far more advanced cloud capabilities than its mobile arch-rival.
Apple, then, is heavily reliant on its usual killer weapon, users’ devotion to its overall experience, something which it has failed to translate to the TV before now. Its chances look better with the new net-top, since it incorporates so many of the features that distinguish the iOS look and feel. As well as a remote which responds to touch and swipe, and the Siri voice interface, it now offers unified search across iTunes, Netflix, Hulu, HBO and Showtime, and widgets for constantly updated information in areas like sports scores.
As is customary for Apple, none of these features are original (Rovi has a touch-controlled remote, for instance, and Comcast has a voice-controlled one, while TiVO and Google Fiber support unified search). The reason they may boost Apple’s standing in the TV market is that they are fully integrated with one another and with an Apple operating system and apps store. That, the vendor will hope, will offset its long struggle to secure eye-catching content deals.
The tvOS is in beta release now and has been available to select developers already – early apps which have been optimized for the TV screen include a multiplayer version of the Crossy Road game which uses the Siri remote; plus apps for viewing real estate, shopping or combining live sports viewing with statistics. Netflix, HBO and Hulu have all created new user interfaces for tvOS.
Over at Verizon, the company has launched go90, a mobile-first TV offering which aims to distinguish itself from over-the-top mobile video services by harnessing the firm’s high quality and heavily controlled LTE network. This will enable it to manage QoS, it argues, and it can tap into its detailed knowledge of each consumer’s location and habits, in order to deliver personalized content offers, adverts and upselling attempts.
Go90 is a free, ad-supported service with paid-for premium options. It is available to non-Verizon customers (except some exclusive content like NFL games), reflecting a global trend for operators to divorce their services from their networks and try to succeed as apps and content providers.
The platform has been assembled from several acquisitions and developments including those of EdgeCast Networks and Intel’s OnCue, plus AOL. It comes to the US market as the last in a long line of failed mobile TV attempts, from Qualcomm’s FLO TV (closed down in 2011) to Dish’s new Sling TV, which saw growth fall by 50% in its second quarter in the market, compared to its first. AT&T has postponed the launch of a streamed TV service until 2016, but Verizon is powering ahead, using go90 to spearhead its wider push into being a content and advertising provider, not just a network operator – as signaled by its acquisition of AOL.
Verizon’s offering is very limited compared to the mobile implementations of mainstream services like Netflix, Hulu, Amazon and Comcast – or even the subscription service it envisaged itself earlier this year. Although some content is exclusive – notably its broadcasts of NFL games, as a result of its licensing agreement with the National Football League – go90 cannot support live streaming as yet, nor can the programs be watched on the big screen in a seamless way. Instead, the operator is targeting 15-30-year olds who do not have their own pay TV subscriptions and do most of their viewing on the move. It is majoring on ‘best-of’ compilations, short-form content and social media integration and will feature shows from ESPN, Comedy Central, MTV and others, rather than the big four networks.
Brian Angiolet, SVP of product development, said in an interview: “Timing is everything. If you look at TV metrics, pay TV is in decline and that’s because the younger audience is finding different programming elsewhere. Now, with go90, users have curated shows that they can make into a common experience.”
The free service will, Verizon hopes, be a gateway to subscription add-ons, though it is not as free as it first appears, since go90 will not be exempt from network data charges (indicating that Verizon is still a network operator at heart). However, the firm will offer 2GB of free data to adopters for their first three months. Since video eats into data allowances, customers may be wary of using a cellular-based service, unless the content is exclusive or very compelling (which it does not appear to be). An over-the-top WiFi offering might have some QoS disadvantages, but it will be a great deal cheaper for those young users Verizon is targeting.
Verizon hopes that a TV offering will attract younger users to its network and boost its advertising revenues, in order to offset the decline in voice income and in data ARPU growth. One of the crown jewels of the AOL acquisition was a programmatic advertising technology which it can use to insert ads in the go90 streaming service, linking them to a user’s location, preferences and behavior. The carrier plans to use sponsored data in Go90, with video ads that won’t eat into users’ mobile data plans.
Marni Walden, president of Verizon’s innovations and new product unit, told CNET that Verizon is considering a companion product for the home or other screens, including the browser or a set-top streaming box. “The idea of being able to go across all screens at some point will be something we’ll continue to evaluate,” she said.
Jan Dawson, an analyst with Jackdaw Research, told Bloomberg: “It fits with Verizon’s overall strategy of hedging against a future in which pay TV becomes less important, but that still doesn’t mean it’s going to work. The carriers have always wanted to be content providers, but they are passing through other people’s content one way and most of the money the other way. They’ve never been successful and aren’t likely to be.”