Apple To Make Hollywood an Offer It Can’t Refuse

Apple To Make Hollywood an Offer It Can’t Refuse

Speaking to NBC talking head Brian Williams this week, Apple CEO Tim Cook said: “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years.”

Cook went on to upgrade Apple’s efforts in television from a “hobby” to “an area of intense interest.”

These cryptic comments support what Steve Jobs’s biographer, Walter Isaacson, told an interviewer, which is that Jobs said off the record that he wanted to “reinvent” TV, that Apple had “licked” the problems associated with said reinvention, and that Apple’s solution would liberate TV viewers once and for all from “all these complicated remote controls.”

If you want to tease predictive meaning out of these two Apple CEO statements, the key is in what each of them said and to whom and why.  Why Cook’s Statements Were the Opposite of Jobs’

In his statements quoted above, Cook delivered a very clear, two-part message: 1) the current companies responsible for TV are the past; and 2) Apple is the future of TV.

Jobs’ comments weren’t inconsistent with Cook’s, but they were opposite in the fact that Jobs didn’t say them publicly. We hear of them not from Jobs, but from his biographer. And we hear of them not in the biography, but from off-the-cuff, out-of-school comments by the biographer who was saying things Jobs didn’t want public.

Cook on the other hand, was deliberately delivering his two-part message in the most public forum available to him: prime-time television.

Apple is disciplined on even hinting about future product plans.

So we learned this week that Apple has changed its policy regarding what it says about plans for TV. The old policy was: Say nothing about it. The new policy is: Say something very specific about it.

What’s important about Cook’s comments is not just what he said, but who he said them to. Those comments were directed at the Hollywood studios.

So let’s understand Cook’s statement in the way that Hollywood studio executives would understand it: It’s a bloody horse’s head at the foot of their bed.

Tim Cook is the Godfather of Silicon Valley

One of the most memorable lines in the history of Hollywood movies is when “The Godfather,” Vito Corleone, tells his consigliere to make a Hollywood studio chief “an offer he can’t refuse.”

This is how Godfathers get their way in Hollywood.

The context in The Godfather is that a studio head refuses to give singer Johnny Fontane a role in a major movie they’re working on.

The “offer he can’t refuse” is made in the form of that studio chief’s prized race horse being killed, and its head placed into its owner’s bed while he’s sleeping.

The “offer” represents a very clear and unmistakable communication. Here’s the offer: “If you do what we want you to do, we won’t kill you.”

Pretty hard to refuse, right?

It’s the same offer Cook is making to the TV studios in Hollywood: “If you do what we want you to do, we won’t kill you.”

The studios have many options for who they license their intellectual property to and under what conditions. And, in fact, these licensing deals constitute their entire business. That’s where the money comes from. From a studio’s perspective, the creative work of making TV shows is simply the means by which they make the most advantageous licensing deals.

However, Apple is unique among all these potential licensees. Apple is worth more than $500 billion and has more than $122 billion in cash.

Apple by itself is worth far more and has far more cash than Walt Disney, Comcast, Time-Warner, Viacom, Sony and all the other TV and movie studios in Hollywood combined.

When the CEO of a company that’s bigger and more powerful than your entire industry says he’s going to reinvent your industry, you pay attention.

And when he says that all the other potential licensees, the ones you’re currently doing business with, are obsolete, and that his company is the future, there’s no way to read that as anything other than a Godfather’s offer you can’t refuse: If you want a future — if you want to live — do things our way.

Of course, Apple’s plans for the re-invention of TV involve new technology, new interfaces and new hardware and software designs. But they also must include a new way to discover, browse, buy, rent, receive, record and watch TV content. And those new ways of interacting with content require totally new kinds of licensing contracts with the studios.

So now we know: When Apple approaches the Hollywood studios to talk about licensing agreements and the terms under which TV shows and movies are made available to Apple’s iTunes, iPod, iPhone, iPad, Apple TV and iTV of the future, here’s Apple’s offer:

“We’re going to re-invent TV. Our version of TV is the future. The current version of TV has no future. If you would like to have a future, sign here.”

It’s an offer they can’t refuse.

Picture courtesy of Paramount Pictures 

  • smkyml

    “So we learned this week that Apple has changed its policy regarding what it says about plans for TV.”

    Actually, we learned it back in May when Cook first said it to the folks at AllThingsD:

    http://www.youtube.com/watch?feature=player_embedded&v=D-235UwpjTU#!

    So, no news there.

    “One of the most memorable lines in the history of Hollywood movies is when “The Godfather,” Vito Corleone, tells his consigliere to make a Hollywood studio chief “an offer he can’t refuse.”

    Obviously not all that memorable to you because you get it wrong. Corleone doesn’t “tells his consigliere to make a Hollywood studio chief “an offer he can’t refuse”. He says *he* (Corleone) will make the offer – “I’m going to make him an offer he can’t refuse”. And Corleone says it to the Johnny Fontane character, not the Consigliere, Tom Hagen.

  • Ed Clowes

    If you’re going to make an offer they cant refuse, there needs to be an “or else”.

    There is no “or else” here because the folks being threatened in this scenario are the ones who actually own the content that consumers want. If Apple can’t sweet talk the studios into playing ball, there is no game, no matter how much Apple is worth.

  • Gadget

    Watch Apple buy HBO and AMC which has an incredible lineup of shows right now. If the production can fund itself, Apple could give it a 70% cut of the profits. If Apple needs to fund them, maybe the cut goes down to 30%. Top notch productions would flock to Apple’s model because I’m sure they are not seeing anywhere near that kind of return with all the middle-men currently in the industry. The major studios should be worried. Top notch TV goes where the money is. Right now Apple has more of that than anyone. When Apple said they were going to make a TV, what people aren’t understanding is the actual TV component will be a small portion of the vision. When Apple also rolls out a major studio division and creates a completely different distribution model, they will disrupt everything……again.

  • technochick

    More Mike bluster. Doesn’t have a clue what he’s talking about so he pews a pile of crap.

  • technochick
    Watch Apple buy HBO and AMC

    You talk like these are indie nets. They are not. HBO, for example, is owned by TimeWarner. They don’t need to sell and nothing old force them to.

    Apple has long had the practice of recognizing when others can do things better than they can and leaving them to do it, whether its a cell service, ISP, etc. They aren’t about to try to run a studio or net. They don’t even produce their own TV ads for Jobs sake. The only group that might have reason to worry is the cable companies, not the studios and nets.

  • Steven Quan

    Ya, I agree with the posters below. Elgan is off his rocker here. The studios are holding all the cards at this time. They don’t have to cede anything to Apple. The cable networks and tv studios are all profitable with the deals they currently have in place. Why should they cut a deal with Apple and cede power and control at the same time? There was a reason why Steve Jobs couldn’t cut a deal with any studios except Warner Bros. If I were a studio exec I would have a hard time ceding anything to Apple at this point.

  • FriarNurgle

    $99/yr or $9.99/month to stream everything in itunes (all media). Content publishers get a share based on what people watch. Streaming will be available on all Apple devices. Cable companies will not be happy but f’ em. Chances are Apple and the content publishers will make more money than the current business model.

    I’ll take that job now, Mr Cook.

  • HerbalEd

    Ya, I agree with the posters below. Elgan is off his rocker here. The studios are holding all the cards at this time. They don’t have to cede anything to Apple. The cable networks and tv studios are all profitable with the deals they currently have in place. Why should they cut a deal with Apple and cede power and control at the same time? There was a reason why Steve Jobs couldn’t cut a deal with any studios except Warner Bros. If I were a studio exec I would have a hard time ceding anything to Apple at this point.

    Ya, I agree with the posters below. Elgan is off his rocker here. The studios are holding all the cards at this time. They don’t have to cede anything to Apple. The cable networks and tv studios are all profitable with the deals they currently have in place. Why should they cut a deal with Apple and cede power and control at the same time? There was a reason why Steve Jobs couldn’t cut a deal with any studios except Warner Bros. If I were a studio exec I would have a hard time ceding anything to Apple at this point.

    Why should they? Simple. Because they’re going to make a lot more money.

  • HerbalEd

    If you’re going to make an offer they cant refuse, there needs to be an “or else”.

    There is no “or else” here because the folks being threatened in this scenario are the ones who actually own the content that consumers want. If Apple can’t sweet talk the studios into playing ball, there is no game, no matter how much Apple is worth.

    And what happens when the consumer wants it via their Apple TV set?

  • thegraphicmac

    Uh-huh. I see it’s “free LSD, Cocaine or Heroin Day” at Cult of Morons again.

  • eldernorm

    To all those that say it can’t be done….. er….. do you remember a fledgling company that was selling iTunes as a way to digitally sell music. A few hundred songs, then a few thousand, now a few million and pretty much EVERYONE is signing on. Music groups that said no…. Beatles, Aerosmith, etc are now saying yes. Studios said no… then said yes.

    If its the future and everyone else is going there, you don’t want to be left behind. iPods… stilling selling 70% of the worlds mp3 players for over 10 years.

    Just a real world thought.
    en

  • gamerdude99

    Save My Baby is now available on the App Store!
    Download Now!
    https://itunes.apple.com/us/app/a/id579202340?mt=8

About the author

Mike ElganMike Elgan writes about technology and culture for a wide variety of publications. Follow Mike on Google+, Facebook and Twitter.

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