Apple's Jobs: Cable's Set-Top Box Stranglehold Stifles Innovation


Apple TV will remain a "hobby" at his company because the cable industry "squashed the opportunity for innovation in the TV market," Apple Inc. CEO Steve Jobs said at the opening session of the All Things Digital conference.

"The TV industry has a subsidized model that gives everyone a set-top box for free, so no one wants to buy a box," Jobs said. "Ask Tivo, ask Roku, ask us, ask Google in a few months," an allusion to the recently announced Google TV venture. Earlier in his remarks, Jobs had jabbed at friend-turned-foe Google's new role, especially in the mobile handset market, where its Android technology competes with Apple's iPhone platform.

He pointed out that Sony, Panasonic and many others have failed at getting into the household with a video delivery device (other than DVD or games units).

"The only way that's ever going to change is if you can go back to square one and tear up the set-top box and redesign it from scratch and ... get it to the consumer in a way that they're willing to pay for it," Jobs added. Although he did not dismiss the prospects for over-the-top video delivery, he repeatedly insisted that "the problem with innovation in the TV industry is the go-to-market strategy."

Jobs said that Apple chose to pursue the mobile and tablet market because the TV category has too many barriers.

"It's not a problem of technology. It's a fundamental go-to-market market problem," said the iconic Silicon Valley executive, dressed in his traditional black turtleneck shirt, jeans and running shoes in front of an audience of technology, entertainment and investment executives at the eighth annual "D" conference.

Adding to the complexity, he continued, is the "balkanization" of the global TV market, where every country has different technical standards and regulations. That makes it too difficult to develop a worldwide product, he said.

Jobs, who sits on The Walt Disney Co. board, mildly criticized content producers for "desperately grasping at anything they can" to retain control of the movies, music and other programs they want to distribute directly to the home digitally.

"The opportunities ... are huge for content owners. The way we market movies is undergoing a radical shift," Jobs said, suggesting that day-and-date release of new films to homes and theaters is imminent.

Viewers will be able "to watch a first-run movie at home if [they] are willing to spend a bucket of money."

Studios "need to embrace" this as a business model that allows customers "to watch wherever and whenever" they want to see a show. He said that studios appear "willing to experiment with TV shows" then will move to new movie distribution. He predicted that such changes will appear in the next 24 months.