The state of Apple’s TV quest

Will Apple build a TV set? Will they become a content distributor? The answer is complicated. This article does a good job laying out all the parameters.

One alternative being considered is that Apple could essentially become a cable company itself. Under that scenario, sources say, Apple would launch what is formally known as a virtual multichannel video programming distributor. MVPD is the catch-all term for pay TV services, whether delivered over cable lines, satellites, or otherwise. A virtual MVPD would offer such content entirely over the internet. Intel, Google, and Sony are known to be preparing virtual MVPDs of their own.

Just as happened in the music space, companies like Apple act as a disruption to an existing business model. In this case, the disruption to the TV space has been going on for a long time. A new studio system is evolving and, in many cases, succeeding. Netflix broke through with “House of Cards”, creating and distributing content completely outside the traditional mechanisms.

However Apple’s television service is formally regarded, it will still be seen as disrupting the TV industry. In its talks with content companies, say sources, Apple notes that it has nearly 600 million iTunes accounts and is good at getting people to pay for content. It made similar claims when it negotiated with companies in music and publishing, and it has indelibly changed those industries.

This is going to get interesting.