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Apple Is Back in Content

Apple has never really been a content provider before -- it has always simply acted as a channel for third--party content -- so this is a significant shift.


A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.

I wrote a post on my personal blog earlier this week called “Ten Quick Thoughts on WWDC,” and threatened to expand on some of those thoughts in more detail in the coming days. Here, then, is the first expansion on one of those thoughts, and it’s the last one on my list: Apple is retaking control of content.

Apple adrift

In my piece earlier this week, I wrote:

Apple has been big in content for 12 years, since the launch of the iTunes Store in 2003, and continuing with major launches like TV shows and movies in iTunes, iBooks, Newsstand and so on. However, for the last several years, Apple has seemed adrift in content, a victim rather than a driver of trends, and has seen its content revenues stagnate and fall, even as third-party apps explode (along with the associated revenue stream for Apple).

There was a time when Apple itself was the conduit for a lot of the content we consumed, whether buying music, renting movies or watching TV shows. When the download model dominated online content consumption, Apple dominated in the major categories. However, what we’ve seen over the last several years is the download model has been replaced with subscription and free, ad-supported streaming for content. Spotify, Deezer, Rdio and others have led the charge in music; Netflix, Hulu and Amazon have done the same in video; and subscription and streaming models have popped up for everything from books to games. For the first several years of this trend, Apple did very little to respond, and it felt as if Apple was adrift. The acquisition of Beats was the first big sign Apple intended to change this, but it wasn’t until this week that we really got clear signals of how it would respond.

Apps, Music, News … and TV?

The first signs of better curation actually came in the App Store over the last few weeks. Apple essentially overhauled the way games in the App Store are presented in the U.S. the week before WWDC, and the major change was the role of human curation rather than automatically generated lists. This trend of Apple reengaging in the layer between users and their content was evident in other areas at WWDC itself, notably with the new News app and with Apple Music.

With News, Apple is replacing the relatively hands-off approach it took with Newsstand (which really added no value above and beyond the underlying apps) and is moving into a more direct role with its own app, dictating design and feature functionality to partners, and doing the curation on behalf of users. With Music, Apple is not only providing standard subscription-service features, but adding its own radio station and its own custom content destination in the form of Connect. Again, Apple is taking a more direct role in not only content curation but in ownership. What we didn’t see at WWDC, of course, was Apple announce its upcoming TV service, but that will likely fit this now familiar pattern.

“For You” a significant theme

One of the other common themes in all of this is not just generic curation but personalized recommendations. Both the News app and the Music app have sections titled “For You,” which contain personalized recommendations based on your explicitly stated and implied interests. One important difference between the way this works in Music and in News is, in Music the emphasis is on human curation, while in News it appears to be largely algorithmic.

Based on Jimmy Iovine’s remarks onstage at WWDC, it appears that Apple believes music has a strong emotional component which machines alone can’t understand — presumably the same can’t be said for news. But it almost certainly can be said for video content, which is why I suspect we’ll be seeing a similar “For You” section in Apple’s TV service when that lands. Apple has, of course, done recommendations for a long time, mostly under the Genius brand in iTunes, but it hasn’t always been effective. Whether it’s any better now will be a major deciding factor in whether Apple Music, News app, and ultimately its TV service will be successful.

Exclusive content and formats

The other big trend in Apple’s reenergized content play is exclusive content and formats. Music has Beats 1 and the Connect platform for artists and fans, and News has custom formats for articles. Apple has never really been a content provider before — it has always simply acted as a channel for third-party content — so this is a significant shift. I’m particularly curious to see how this approach gets applied to its TV service, because we’ve already seen significant investments by Netflix, Amazon, Hulu, and HBO in original content over the last few years. I still can’t see Apple investing to that extent in exclusive content, but I can see Apple extending the Connect concept to TV shows and movies, and allowing creatives to create and share exclusive content with viewers.

There’s still an app for that

Despite all this, Apple isn’t going to be locking out or shutting down any third-party apps that compete with these services. Spotify, Pandora, and so on will continue to exist in the App Store, and may even make their way to the Apple TV if Apple does indeed open up the SDK at some point later this year. Apple is more open than ever to competing apps on its platforms, and this raises the bar for Apple’s own content services.

While Apple has an inherent advantage with these services by virtue of being able to pre-install them on every iPhone, iPad and Mac, that’s no guarantee everyone will suddenly dump competing apps and come running back. Apple’s content play can’t rely on the home-field advantage alone, but has to actually differentiate on quality.

That’s the big question I have coming out of WWDC. We saw so little of how well these new apps and services will work onstage, and there are so many questions remaining. We really will have to wait and see how these things — and especially the curation and recommendation side — work in practice. For now, all we know is that Apple is finally ready to try to recapture our content attention, but we still don’t know if it will work.

Jan Dawson is founder and chief analyst at Jackdaw, a technology research and consulting firm focused on the confluence of consumer devices, software, services and connectivity. During his 13 years as a technology analyst, Dawson has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. Prior to founding Jackdaw, Dawson worked at Ovum for a number of years, most recently as chief telecoms analyst, responsible for Ovum’s telecoms research agenda globally. Reach him @jandawson.

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