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How Google and Apple will control TV

Mike Elgan | Jan. 11, 2012
In the global business marketplace, Silicon Valley is a shark, a killing machine hardwired with powerful instincts for tracking down sick, weak and slow businesses, and devouring them without hesitation.

Google TV will start making serious inroads into the market this year, and will probably surprise a lot of people.

Apple TV

Google is a great white shark circling and thrashing around in clear view. But lurking out there somewhere is an even scarier creature -- Apple.

Rumors about an Apple TV set have circulated for years. Most recently, it became clear in Steve Jobs, the recent biography of the late Apple founder by Walter Isaacson, that the rumors are true. Apple intends to unveil a new TV, and probably this year.

The rumor mill says Apple is probably working on a 50-inch TV. Other rumors suggest smaller-screen TVs.

Other rumors say Apple has been securing the rights to TV content that the company can offer in season packages and a la carte. In particular, Apple is thought to be pursuing the rights to sell U.S. and international sports programming.

Landing content deals has been hard for Apple, according to insiders. After seeing what Apple did to the music industry, Hollywood executives are holding on to their wallets when Apple is around. Still, Apple's mission, which appears to be becoming the content consumption conduit of the lucrative, profitable end of the market, combined with market power and billions in cash, will eventually win the day.

This model for selling content is very much in line with global trends, which see subscribers to cable and satellite networks leaving, and instead opting for Internet-based services like Netflix, Hulu and Amazon Prime.

Why the coming Google and Apple TV takeover is good

Google's model is to provide low-cost, contextual advertising-supported intelligence, apps, recording and Internet connectivity to the leading TV brands. Their goal is to have the TV you were going to buy anyway have Google inside.

Apple's model is to sell you a TV that is really a giant Siri-controlled iPad, and ideally gets its best TV shows and movies through iTunes. Their goal is to get you to buy an Apple TV instead of the TV you were going to buy anyway.

These two approaches mirror the open/fragmented, closed/integrated binary choice Google and Apple present to smartphone buyers.

Either way, all roads lead to Silicon Valley.

Of course, the addition of compute power, apps and Internet access are perfectly inevitable for TVs over the next few years. But Silicon Valley giants Google and Apple are in the best positions to fix the four ways that TV is broken.

1. Cable

The era of cable and satellite is ending. The predatory idea of giving you a massive number of channels for a massive number of dollars can't survive the Internet era. It's identical to the now-dead CD music model, where you had to buy an $18 disc to own the one song you wanted.


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