Why Apple Should Use Its Billions to Crush Hollywood



You’ve no doubt seen this post suggesting that Apple could use its $70 billion in cash to buy the entire mobile phone industry. The idea is worth a chuckle, but buying the phone handset industry is neither desirable nor possible. Apple doesn’t want to sell Nokia phones, and regulators wouldn’t let the company buy, then close, all its competition.

No, instead Apple should use its billions to take over Hollywood.

Before getting into a new industry, most companies in technology start with the question: What can we make?

The great thing about Apple is that they ask: What should we make? What industry is so broken, and products so clunky and frustrating to use, that Apple could re-invented it with something elegant, beautiful and simple?

They’ve done this successfully four times with four industries: PCs, music players, cell phones and tablets.

Four culture-changing mega hits for a single company, by the way, is the current world record. Some other super successful companies have done this only once. Think Starbucks with its coffee stores, or Amazon.com with its book business. Many super successful companies have never achieved this.

In the case of music players and tablets, Apple changed the world through sheer market domination. In PCs and cell phones, they changed the world by creating a vision so compelling that competitors were forced to copy.

In other industries, Apple has failed to change the world.

One of these failures is the TV and movie watching experience with Apple TV. Yes, Apple TV is awesome. But the overwhelming majority of TV users neither use an Apple TV, nor use a system that copies Apple TV. Which is too bad, because our living rooms desperately need Apple’s touch.

The music industry, which is now Apple’s bitch, is a great model for what should happen with the TV and movie industries. Apple’s domination of electronic music sales was so complete that the only way for a band to succeed without iTunes was to be the fucking Beatles.

Hollywood deserves to be taken over by Apple for the same reason the music industry deserved it: Because Hollywood spends all its time and energy clinging to the past, actively blocking the future and cynically exploiting, manipulating and abusing its customers.

The living room experience sucks. We’re all being held hostage by cable TV companies, which present us with electronic equipment and user interfaces from the Spanish Inquisition. Pretending that the Internet never happened, TV studios still “broadcast” TV shows, as if we all received their broadcasts via rabbit-ear antennas or something.

When you browse the on-screen listings for something to watch, you’re confronted not by the tiny handful of great shows you want (which aren’t being broadcast at this moment, so you’re out of luck) but instead by the decline of Western Civilization. Infomercials. Re-runs. Shitty reality shows. Fluff. Dreck. Sewage. Porn-in-denial. Moronic cable talk shows so nakedly propagandistic they would make Joseph Goebbels blush.

Not to worry. Just record it with the DVR provided by the cable company. Never mind that it runs out of space with a couple dozen shows, or cuts off the Oscars broadcast before Best Picture is announced because the system is so stupid that it records only time, not the actual broadcast.

Nothing could be more obvious than that TV should work exactly like podcasts on iTunes – or TV shows on iTunes, for that matter. We should subscribe not to cable, but to seasons of our favorite shows — or buy them a la carte. Many shows should be free and advertiser supported like TV is now, but asynchronous.

Even if you have Apple TV, the experience of watching is terrible, because most of the best shows and movies are simply missing. The same is true for TV and movie offerings from Google, Amazon and Netflix. Hollywood is holding these movies and shows back for the same reason the music industry resisted rational pricing and distribution of electronic music in the 1990s — they’re afraid of the future, and intend to prevent it from happening.

Why isn’t every single movie available in HD on Apple TV or its competitors the second it’s released on DVD or every single TV show the second it’s broadcast? Why only the crappy movies you don’t want to watch? The reason: Hollywood.

Tragically, Apple doesn’t have the market power to force Hollywood to stop sucking. Apple TV has barely made a dent in market share for living room entertainment options. And Hollywood has plenty of competitors to play off each other, including Google, Amazon, Netflix and the cable and satellite operators. But the acquisition of such market power would be the best use of Apple’s $72 billion pile of cash that I can think of.

Netflix is worth $13 billion. Apple should buy the company and move all its employees to the spaceship. Boom. Done. Next?

Apple should ship a real Apple TV. No, not a box, but an actual TV set that looks just like the iMac, but much bigger, and with Apple TV electronics built in.

Apple should roll out Apple TV functionality to iMacs, iPads and even iPhones. Turn every Apple screen into a TV set that uses or works like iCloud, where you stop watching a TV show on your iPad and when you turn on your iTV, the show starts up where you left off.

Apple should turn the Apple TV box into a cable box and DVR with massive storage, and Apple should become a local cable company in all the major markets in the US.

Apple should spend five billion dollars on a relentless, all-media advertising campaign using Apple marketing pixie dust to convince everyone to embrace Apple as their TV and movie provider.

Then, with a significantly fortified negotiating position as the result of all this activity, Apple should go to each of the Hollywood TV and movie studios, and make them a Vito Corleone offer they can’t refuse: Either you sign a contract now to make all your content available for download on iTunes and Apple TV the second it’s released on DVD in the case of movies or the second it’s broadcast in the case of TV — or your content will never be made available via Apple. Play ball or be blacklisted forever.

The TV and home movie scene is a clunky, ugly, frustrating, broken mess — exactly the kind of thing Apple is great at fixing. And they’ve got the money to do it.

It’s time for Apple to use its massive cash reserves to fix home entertainment — and bring Hollywood to its knees.