Pre orders for Apple TV are off to a "great start" according to chief executive Tim Cook and as the service hits stores interest from advertisers in its ability to bring native content to television is growing, reports Minda Smiley and Seb Joseph.
"We want to provide the same innovation in the living room that we delivered in our iOS devices," said the Apple boss just days after eager fans were allowed to pre order the service. And while its only be available for a matter of days, its "apps not channels" focus is not only being billed as gamechanging for the viewing experience but also for the democratisation of more ad free services at lower cost like Netflix.
"People are already watching more TV through apps today and we think apps represent the future of TV," Cook told analysts on Apple's quarterly conference call earlier this week (26 October). "We've built a new foundation around this vision with a new operating system called tvOS that offers innovative ways to connect with your screen and to search for what you want."
News that Apple is pushing apps into the TV viewing experience should come as little surprise; it virtually invented the concept of the App Store and with it has positioned itself as the persistent layer between hardware and software, while also controlling what users can and can't run on it. Focusing on channels is why the first incarnation of Apple TV failed to scale and with apps firmly at the root at its latest push into television it brings it squarely into the view of those "cutting the cord" from cable and satellite. Now Apple doesn't have to do all the leg work when it comes to the future of the home's biggest screen, instead it can strive to be the platform for these innovations live on.
What does this mean for advertising? "The death as we know it," claimed Nissan's head of digital for Africa, Middle East and India at Nissan David Parkinson. "Apple like many others are starting to realise that the current way advertising works is unsustainable, in TV and online - high cost services vs free ones laden with advertising is under attack from the democratisation of more specific ad free services at lower cost like Netflix, streaming music and other pick and mix sources of entertainment.
"Their strategy on the News app adverts and ad blockers show how they feel about this. Their own ad forays have failed several times and they are concentrating on what they know best - owning the hardware and software experience."
It differs from the media owner status brands like Netflix and YouTube crave by creating an innovative and consumer friendly ecosystem that is closed and completely controlled by Apple. The technology giant can glean from 600 million active iTunes user accounts and data captured during the mobile TV experience, which could form a formidable ad proposition, particularly for its iAd mobile format. There's a war being waged between set top boxes and third party apps and Apple is manoeuvring itself to exploit both sides.
"Focusing on channels would mean that all Apple TV could ever become would be another version of television, but focusing on apps means that your television becomes another screen, and a screen beyond traditional TV, said Jed Hallam, head of digital strategy at Mindshare.
"With regards to how this is likely to affect how we advise our clients buy media - Apple TV (much like Netflix or YouTube) isn't likely to dethrone television as a major advertising medium any time soon, but we'll be watching closely to see how user adoption takes shape as the Apple TV App Store starts to shake up what one shared screen in every home means in the future."
It's a shift happening amid the web's transformation into a medium for paid services and the paid Internet of Things. And for those companies looking to survive the transition, Apple TV's apps model will likely accentuate the need for more genuine, engaging and native ways to promote their brands, focusing on where customers are rather than where the industry wants them to be.
"If Apple provides its own native ad platform, the rules of engagement will surely shift to programmatic creative," said Jon Goulding, managing partner at creative programmatic agency Atomic London. "Those advertisers who can target with the most relevant and situationally appropriate creative using data will succeed. For creative agencies the challenge will be how to adapt to new platforms and capabilities when discussing ideas with clients."
Given that colour TV hasn't changed a whole lot since it was first introduced in 1962, that's a pretty exciting prospect for marketers. "Apple TV's greatest potential lies in connecting the targeted and measurable world of digital with the reach and scale of TV," said Steve Carbone, head of digital and analytics at Mediacom North America.
"This is because tvOS is the first TV platform that enables developers to create native content and features, which means we will be able to produce experiences that can move between TV and mobile in ways that enhance the TV watching experience and become more productive for brands. Think more immersive and engaging interactions, for example, via custom 1:1 mobile messages that reference your name and interest triggered by a specific TV ad you're watching."
Nissan's Parkinson believes this will consist of a "combination of our paid services" with "real consumer value as well as linking brand more heavily to consumers everyday life through sponsorship, digital fused with experiential experiences and authentic product placement. It's going to be a radical shift change and we need to be ready".
Apple tvOS is set to become a pivotal part of its "iOS everywhere" plan, with the proliferation of apps embodying the reality that interruptive and irrelevant advertising is unacceptable.
"Brands must offer engaging experiences instead," said Chris Gorrell Barnes, founder and chief executive of content marketing agency Adjust Your Set. "This is the key thing to bring home. It is all very well brands putting content on tvOS but the big issue will be defining a clear proposition and a supporting content strategy that provides users with a better experience. That is where the true difficulty will lie."