Like Apple, TV Explores Must-Have Applications
The cable and satellite TV business has a big case of iPhone envy. — Apple has been able to popularize its cellphone in a crowded field by giving away or selling specialized applications that make the phone more useful.
Context & Ripple Effects
Two years after reports that Apple's set-top box was positioned to overtake both TiVo and Netflix, the New York Times frames the pay-TV business as having 'iPhone envy': cable and satellite operators are reportedly exploring applications as a way to make their services more useful, mirroring what Apple popularized on its handset. That exploration is still unconfirmed — it is reported as an industry direction rather than announced product plans.
The timing matters because Apple's annual iPod/iTunes event lands this Wednesday in San Francisco, with an updated iPod touch expected — the device that extends the App Store beyond the phone and into the living room's orbit.
First-order effects
- If cable and satellite operators open their boxes to third-party applications, iPhone developers gain a second mass-market screen to target, while operators get a way to differentiate commodity video packages.
- Apple's Wednesday event, where an updated iPod touch is expected, raises the stakes for any operator app strategy by pushing the same application catalog closer to the TV.
Second-order effects
- TiVo, Netflix and other set-top incumbents face pressure to answer with their own developer platforms or risk being outflanked by distributors who treat the box as a software platform rather than a channel tuner.
- Content owners gain leverage either way: whoever controls the TV application storefront — distributor or device maker — becomes the new gatekeeper for reaching viewers.
Third-order effects
- If the pattern holds, the set-top box follows the smartphone path: hardware margins compress, differentiation migrates to the application layer, and control of the TV interface becomes the industry's central power struggle.
The trend: Television is beginning to reorganize around application-store economics, with pay-TV distributors racing Apple to define who owns the living-room platform.