"Apple will have to show [the cable companies] that it doesn't intend to compete them out of business," Sinnreich said. "Everyone knows that disruption is coming, but the cable companies want the breathing room to disrupt themselves."
The ultimate goal of "smart TV," or "interactive TV" as it's also called — the ability to call up any program at any time, perhaps paying for each program separately rather than have to subscribe to a broad swath of content — is targeted advertising, said Sinnreich.
"The Holy Grail is advertising that knows who is in the living room and what they want, then provides them with information for buying," said Sinnreich. "Those are the missing pieces that the cable companies don't have."
Technology companies like Apple, Google and Microsoft do have those pieces, or at least some of them. "Apple, and others, have a tremendous IP [intellectual property], with lots of patents," said Sinnreich, which could come into play when providers like Comcast try to identify consumers for targeted ads. That plays to Apple's favor.
"Maybe what we'll see is an unholy alliance between technology companies and the cable companies," said Sinnreich, "that over the next five to 10 years pools their assets."
If Apple goes the set-top box route for Apple TV, it means it's decided that selling premium hardware, it's modus operandi, is the best shot.
"Comcast has the upper hand," Sinnreich argued. "Apple is taking a gamble with this, unless they are able to strike some revenue-sharing deal where they share consumer data and revenue from targeted video ads." Sans such deals, Sinnreich believed Apple could be locked out from the most lucrative parts of the content ecosystem.
"The question is who's going to be providing the link from the channel to the living room, and how it will be monetized," said Sinnreich. "So maybe Apple will retrench [its plans] and do what it does best, make awesome devices with a high profit margin."
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