Apple released the Apple TV 4K in late 2017, along with annual updates to tvOS. There are rumors that a spec bump refresh is imminent, but an exact release date remains unclear.
Apple TV primarily competes against the Amazon Fire Stick and Roku’s range of streaming sticks. What’s funny is that the Apple TV has indirectly become the best option for consumers, at least in the US, despite Apple not releasing a new generation of hardware. And it all comes down to business contractual disputes between HBO Max and Peacock, the two major streaming services that launched this year …
So how does this relate to the appeal of the Apple TV? The simple answer is that HBO Max and Peacock cannot agree on terms with Amazon and Roku. As such, you cannot get the HBO Max app, or the Peacock app, on an Amazon Fire TV device or on a Roku stick.
Amazon wants HBO to include all of its Max content as a Channel inside the Amazon Prime Video experience. HBO Max doesn’t want to do this because they don’t want to be aggregated onto someone else’s platform in a UI they don’t control, with enforced revenue sharing and a limited customer relationship.
Remember that HBO stopped offering its Apple TV Channel when Max debuted. But Apple doesn’t require its partners to be Channels, so the HBO Max app is available for Apple TV. So far, Amazon is holding firm and you can’t get HBO Max on Amazon Fire devices because of it.
The situation with Roku is different. Roku monetizes its platform by taking a share of advertising in third-party apps. HBO Max doesn’t have ads at the moment, but they want to launch an ad-supported tier as soon as next year. Roku wants HBO to agree to a revenue-sharing agreement for the commercials served through the Roku HBO Max app. HBO naturally doesn’t want this. Roku additionally wants HBO to include some portion of its content for free in the Roku Channel, which offers a selection of free content from various TV brands to anyone with a Roku account. Again, HBO Max wants to control the experience and only makes content available inside of its application.
Peacock is balking at Amazon’s and Roku’s terms for similar reasons. Peacock launched with an advertising-centric model, including an entirely free plan supported by commercials and even one of its paid plans still comes with pre-roll ads before shows start. Roku wants a cut of those ads. Peacock doesn’t want to give Roku a cut.
For as much as we have heard recently about Apple’s draconian and potentially anticompetitive App Store policies, it seems like a walk in the park as far as access to the Apple TV platform is concerned. The terms for these companies to be available in the tvOS App Store are straightforward: Apple gets a cut of subscriptions made inside the app using Apple In-App Purchase or users can login with account information they got from elsewhere. Apple likes these apps to feature full integration with the TV app and Siri and everything else, but it’s not mandatory. HBO Max and Peacock have been available on Apple TV from day one.
Tim Cook famously said the future of TV is apps, and here that is embodied to the fullest. Without Apple directly doing anything, Apple TV is now the best streaming box for American consumers because it is the most compatible. If you want to watch HBO Max originals or access the Peacock streaming library, Apple TV is the only choice in its category.
Every day that goes by, more and more Roku and Amazon customers are getting frustrated that they can’t access these services and some fraction is switching to the Apple TV set-top box. (If the Apple TV was sold at a cheaper price, this would happen much more quickly).
In the age of streaming, the big services have a lot of leverage. In the TV situation, the Amazon/Roku disputes are clearly beneficial for Apple. But it works both ways.
This week, the App Store rules that ban game streaming services have come to the fore as Microsoft readies to launch xCloud. The service is launching on Android, but it won’t be available on iPhone, iPad, or Apple TV. Apple’s prohibitive rules will frustrate millions of Xbox GamePass users who will be eligible to use xCloud for free, but they won’t be able to access it. Some of those customers may switch away from Apple’s devices entirely, like getting an Android tablet or switching their Apple TV to an Nvidia Shield. And the same effect will happen with all of these other game services, like PlayStation PS Now, Nvidia GeForce Now, Google Stadia and the like. It’s an unsustainable equilibrium that can’t last forever. But how long will Apple make its customers suffer?
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