Can Former Amazon Fire TV Exec Save Apple TV From Itself?
Feb 9, 2017 1:28 PM PT
Apple has hired Tim Twerdahl, the former head of Amazon's Fire TV unit, in an effort to revive its struggling Apple TV business, which has been losing market share to rival streaming content services.
Twerdahl joined Apple this month as vice president in charge of product marketing for Apple TV, and the company shifted the unit's former head to a post responsible for negotiating content deals, according to a Bloomberg report.
Amazon hired Twerdahl in 2013 as general manager of the Amazon Fire unit. Twerdahl previously was a vice president for smartwatch developer WIMM Labs. He spent almost two years at Roku, where he was vice president for consumer products.
Twerdahl reports to Greg Joswiak, vice president in charge of marketing the iPhone, Bloomberg reported, citing an anonymous source. Pete Distad, vice president of product marketing at Apple, now is negotiating content agreements under SVP Eddie Cue, who leads that effort.
After a promising beginning, Apple TV rapidly began losing share to rival streaming devices, according to data eMarketer released last fall. Apple TV is projected to grow from 20.5 million users in 2016 to just 25.8 million by 2020.
During the same period, Google Chromecast is expected to almost double it user base from 30.6 million in 2016 to 59.6 million by 2020. Amazon Fire TV is projected to grow from 28 million users to 54.6 million by 2020, and Roku is projected to expand from 29.9 million users in 2016 to 45.9 million by 2020.
Apple last fall announced a new television app designed to give users a unified experience for accessing content on an Apple TV, iPad or iPhone. The release included a new tune-in with Siri feature that allows users to access live news and sports feeds.
For Apple, the content ship largely has sailed. The company fell behind its rivals by negotiating itself out of potential deals with studios, and it fell behind streaming platforms at Amazon and Netflix in terms of developing original programming.
"Apple's entry into home video was completely botched," remarked Michael Jude, a program manager at Stratecast/Frost & Sullivan.
"It waited until the market had been pretty much defined by others, then came in with an overpriced product with substandard content," he told the E-Commerce Times.
Consumers shied away from Apple TV because it fell far behind its rivals in terms of a value proposition, Jude said. It then attempted to sell video content through the iTunes model, which didn't work well.
"Consumers will accept a high price if they get a premium level of content," he noted. "That means that Apple will need to provide live-streaming video from the usual sources, plus invest in unique content that users want."
CBS Interactive, for example, is developing a new Star Trek series for its own streaming-content business, which will help draw cord-cutting customers who are willing to pay a monthly fee for that service.
"The networks were wary of having an iTunes for TV proposition on their hands," said Tim Mulligan, senior analyst at Midia Research.
"iTunes worked because Steve Jobs was able to persuade the major record labels, and content IP was highly concentrated," he told the E-Commerce Times.
Television is a highly fragmented business, Mulligan observed. Networks don't want to repeat the same mistakes made by the music industry, which eventually gave Apple so much power that it became the de facto most powerful music distributor.
Pay TV companies put a great deal of pressure on the television networks through their carriage deals to make things more difficult in terms of providing content to video disruptors, he pointed out.
What Apple has been trying to accomplish is to develop value-added content on top of its core Apple Music business, which is fighting to compete with rival streaming service Spotify, said Dan Cryan, director of broadband and digital media at IHS.
Apple has been working for more than a year on Vital Signs, a series starring Dr. Dre, Cryan told the E-Commerce Times.
Dre is the iconic producer and hip hop artist who, along with partner Jimmy Iovine, launched headset maker Beats by Dr. Dre in 2006. They sold the firm to Apple in 2014.