Basically the Amazon model is to sell the hardware at cost so they can make their profits on the content. This seems to be the exact opposite model from Apple who makes great profits from their device sales and, according to the article, runs the popular iTunes "slightly above" break even.
I immediately wondered what impact these two models would have for IPTV.
Apple seems to be positioning its Apple TV as a replacement for major MSO legacy set top boxes. That could prove to be a brilliant strategy. There are tens of millions of legacy MPEG2 STB's out there. How great would it be if customers voluntarily upgraded their own STB's by purchasing $99 Apple TV boxes on their own? Apple would get the hardware sales, the MSO's would keep their subscribers while being able to offer new services and the customer would own their STB.
Amazon's model? In terms of IPTV their offering would seem to appeal mainly to cord-cutters. Whereas if Apple isn't making much off the content they they can position themselves as not being in competition with the big cable companies (if they just support the Apple TV STB). Apple's business plan seems to make more sense.
No comments:
Post a Comment