quipble lite

Today Apple announced a new feature for iOS devices that has me all riled up: in-app subscriptions.  Although there are a lot of contentious issues with Apple’s subscription policies, the really exciting part is what this foreshadows.  I think subscriptions will be huge—for Apple TV.

  

Media execs have a right to be upset over being forced to manage their subscriptions through Apple.  Losing 30% of their revenue to Apple is no small matter.  In addition to that, media companies miss out on highly valuable customer data and are often begrudgingly persuaded to price their products at Steve Job’s whim.  

While I understand the misgivings that media execs have, boy am I thankful that Apple is fighting for the consumer.  Amazingly, this is what Apple has become.  The leader of the people, the populist conglomerate.  They fought the big mobile networks, they fought big record companies, and they will fight big media.  [I’m not completely serious here, don’t worry.]  Subscriptions via iTunes [when will that name change] are just much simpler and easier to manage than traditional subscription systems.  Two pet peeves that I have about the internet are “magically” being subscribed to email lists and having to separately sign into innumerable services. Apple gets rid of both (at least within their ecosystem).

Newspaper and magazine subscriptions have been a long time coming.  But I see this more as an intermediary step.  In my opinion, subscriptions are ultimately meant for video.

An Apple TV with support for apps and subscriptions would represent a true alternative to cable.  Instead of channels, we would have apps.  An HBO, Showtime, or ESPN (drool) could create “apps” that users subscribe to.  These “apps” will have have on-demand content and access to the live feed.  Maybe there will be a specific storefront for this “subscription video” and still call them channels.  It really doesn’t matter.  Either way, the words “go to ESPN” will be understood all the same.  

The most important part is that it is so beautifully simple.  So simple that it would work. Simple for the users because subscriptions over iOS will enable the dream.  This dream, of course, is having on-demand tv and choosing the channels we actually want to pay for.  Simple because almost anything has a better UI and less lag than what cable boxes currently offer.  Simple because the concepts are familiar: users would cycle through these “apps” like they cycle through channels.

Simple for the content providers because they won’t need to cannibalize their revenue base to provide online video.  They can charge iOS users the same amount they charge cable companies.  In fact, with all the recent battles between networks and cable companies over distribution deals, networks can skip the middle man (per se—Apple will always get its 30%) and go straight to the consumer over iOS.  Or at the very least, they can use it as leverage.  

With the release of in-app subscriptions Apple has truly flexed its muscle in daring to command a 30% cut for providing the platform for media companies to distribute content.  As other platforms finally release products and gain momentum, expect content providers to try to leverage them against Apple.  In the near future (~2 years) however, also expect Apple not to budge as they are such a strong force in the market that its absurd to ignore them, regardless of whatever percent of sales Android ends up taking.  In the meantime, I fully expect Apple to extend their content partnerships into video and turn Apple TV into their next big product.