Apple Is Ready for the ‘Breakdown of the Cable Bundle’

In a response to a question posted during the conference call that followed Apple’s announcement of its Q1 2019 results, Apple CEO Tim Cook outlined how Apple sees its opportunities in video content going forward, noting that he thinks that we will see the “breakdown of the cable bundle” accelerate this year as consumers look to modern streaming services as alternatives.

While the writing has been on the wall for a few years already that the traditional cable bundle is on its way out, Cook stated that he thinks “it will likely take place at a much faster pace this year,” which provides some insight into why Apple may be ramping up its Netflix rival at a more rapid pace in order to take advantage of a burgeoning market as more people find themselves dissatisfied with traditional cable services.

However, Cook noted that Apple is actually approaching the market in “a variety of ways” to take advantage of the shifting consumer preferences. While the company’s original content plans form a big part of that, Cook remained relatively cryptic on that point other than emphatically stating that Apple will definitely participate, as well as mentioning Apple’s “multi-year partnership with Oprah.”

We will participate in the original content world. We have signed a multi-year partnership with Oprah, but today I’m not ready to extend that conversation beyond that point. We’ve hired some great people that I have a super amount of confidence in and they’re working really hard and we’ll have something more to say on that later.

Apple CEO Tim Cook during Apple Earnings Call, Jan. 29, 2019

However, Cook also explained that it’s not just about the original content, and Apple plans to continue participating in working with other streaming services as well, noting how all of the third-party video subscriptions that are available on the App Store — and through the Apple TV app — will also become more important “as the bundle breaks down,” since he believes users will be looking to buy multiple services to replace their cable bundle. While Apple hasn’t succeeded at getting all third-party services involved with its own TV app — Netflix remains the one conspicuous holdout among major brands — the company does boast almost 100 different “channels” of content that it’s already delivering that way, having even succeeded in mending fences and getting its erstwhile rival, Amazon Prime Video, on board.

Cook also mentioned that Apple is also of course continuing to leverage its Apple TV set-top box as part of its strategy, but added how excited he is about the company’s recent addition of AirPlay 2 to major TV brands, which stands to enhance the living room experience for Apple’s customers by extending their iPhones and iPads onto the big screen.

While AirPlay 2 will simply allow users to stream content onto their TV screens, that alone will allow Apple to extend the reach of its TV app — and upcoming video streaming service — to users who might not otherwise be interested in purchasing an Apple TV (although it’s easy to see how this may also serve to woo new customers to the set-top box as well). However, Samsung has taken things a step further with the announcement that iTunes Movies and TV Shows will be coming to its smart TV platform, which also suggests the possibility that Apple’s TV app and original content service could make an appearance there as well, again extending its reach without the need for an Apple TV.

We see huge changes in customer behaviour taking place now and we think that it will accelerate as the year goes by to sort of the breakdown of the cable bundle that’s been talked about for years and I think that it will likely take place at a much faster pace this year.

Apple CEO Tim Cook during Apple Earnings Call, Jan. 29, 2019

Between the flurry of rumours and announcements we’ve seen already and then Cook’s comments yesterday, it definitely seems like 2019 will be the year that Apple finally makes its big push for the living room.