Steve Jobs was interviewed by Walt Mossberg and Kara Swisher yesterday at the D8 Conference. He was asked about Apple's plans for TV by someone from Hillcrest Labs, and here's what Jobs said (from Engadget's liveblog):
"The problem with innovation in the TV industry is the go to market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us... ask Google in a few months. So all you can do is ADD a box to the TV. You just end up with a table full of remotes, a cluster of boxes... and that's what we have today. The only way that's going to change is if you tear up the set top box, give it a new UI, and get it in front of consumers in a way they're going to want it. The TV is going to lose in our eyes until there is a better go to market strategy... otherwise you're just making another TiVo."
That quote has been read by some people as a refutation of last week's story that Apple is working on a $99 next-generation Apple TV based on the iPhone OS, but I think that it in fact supports it. Word has been spreading for some time that Apple has been negotiating with broadcast and cable networks to get VOD rights to all their programs (or as many as they have rights to supply.) Apple already sells episodes of many programs in the iTunes store and makes other video content available for free. The twist that has been talked about for this new initiative is that Apple would offer monthly subscriptions in addition to selling individual episodes.
Now, put this together with the $99 Apple TV rumor and what Jobs said about TV last night. Here's what you get: Apple's idea is not to become another set-top box, but to become the only set-top box. With the new Apple TV, you'd cancel your cable TV or satellite subscription because you can get all the shows you want, whenever you want, from Apple. If you're leasing a HD set-top box from your cable operator, you could pay for the Apple TV in less than a year from the savings alone. If you want live events and local news, sports, etc., you can get them over the air or via the Safari browser in the new Apple TV.
I don't think that Apple will announce the new Apple TV until it has all the content partnerships in place to make Jobs' vision workable. He'd rather forgo the set-top box business than launch an add-on device. The next Apple TV might be launched with 80% of the necessary partnerships, on the assumption that customer takeup with drive the remaining 20% of content providers to sign up, but it won't launch if it doesn't have an attractive lineup of content from day one.