Friday, September 15, 2006

Cringely on Apple's media play: not based on advertising

Cringely is the most interesting commentator in the PC world, and writes for PBS. Bizarre. Anyway, here he has a particularly good column -- he points out something I hadn't noticed and nobody else has commented on. Apple's media play isn't based on advertising ...
PBS | I, Cringely . September 14, 2006 - Swimming With Sharks

.... Contrast this with Google or Yahoo and even with Microsoft in recent years when everything seemed to be moving to being ad-supported. Where is advertising in Apple's strategy? It is nowhere to be found.

By selling outright, Apple doesn't need ad sales to succeed, reducing its risk. It also reduces downloads, I am sure, but that's not all bad. Even if the system were heroically successful right from the start, it might have technical problems. By ramping slowly with retail sales only, Apple can hope to keep ahead of the demand curve.

Just as Apple isn't Microsoft relying on working with the TV networks and cable channels, Apple isn't dependent on advertising, either. PVR (personal video recorder) functionality and advertising can easily be added at a later date if that is justified by market conditions or revenue expectations. Yet for Microsoft or Google going the other way -- from free with ads to paid -- it is that much harder a task.

When Apple needs more revenue from its movie business it can always add commercials. When Apple needs more revenue from its hardware products, it can always sell a PVR upgrade for $99. The ongoing profit potential is immense...
This is dog-that-didn't bark stuff. Absence is harder to notice than presence, but Cringely is right. Fascinating, and complementary to the strategies of Apple's new best (boardroom) friend - Google.

The entire column is worth a careful read.

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