Between 1Q 2015 and 1Q 2016, Apple TV sold twice as many units as the previous year and still fell behind its direct competitors (Amazon, Roku and Google), taking 20% of the US streaming video players market. Although the 4th Gen device is projected to ship 24 million units worldwide by the end of this year, both Apple and third-party developers who were supposed to drown the tvOS App Store in apps keep quite. Is it just the calm before the storm or …the acceptance of defeat?
Apple TV timeline
The first official Apple TV was launched in May 2007, although the company considered going TV since 1993 – and made some awkward attempts to conquer the market with Apple Television Interactive Box and Apple Bandai Pippin.
The 1st Gen Apple TV enabled users to stream videos from their Macs and YouTube, as well as rent movies from iTunes. The second version of Apple TV was released in September 2010 and generated positive reviews, with Macworld saying the gadget “has the potential to erase its status as a hobby and become a hit”.
The 3rd Gen Apple TV hit the shelves in 2012 and was criticized for providing little compelling content. Nevertheless, the gadget sold 2.7 million units in 3 months.
In 2014, Tim Cook confirmed Apple TV generated $ 1 billion in revenues over the course of 12 months and said it was “a little more difficult to call it a hobby these days”.
In 2015 Apple TV cumulative sales reached 25 million units. The 4th Gen Apple TV was introduced in September.
Evolution of Apple TV
“We believe the future of TV is apps”, said Tim Cook some 14 months ago, rising controversy among dedicated cable TV adepts and leaving software vendors rubbing their hands.
Upon its launch the 4th Gen Apple TV was met with mixed reviews. Some critics felt the gadget was underdeveloped and labelled the big-screen gaming experience as disappointing. Others praised the tvOS app store and Siri remote. Nevertheless, the event didn’t go unnoticed by both Apple lovers and haters and raised the bar for smart TV manufacturers.
Here’s what makes the 4th Gen Apple TV different from its forerunners and product competitors:
- TV App Store. Now third-party companies can develop stand-alone TV apps, but the real benefits come when there is one app for all Apple devices (buy once, run everywhere). That’s what Hipster Whale (Crossy Road), Snowman (Alto’s Adventure), Mobiata (FlightBoard) and other forward-thinking companies did. Meanwhile, the TV App Store is growing;
- New Siri Remote. The gadget was specifically designed for the 4th Gen Apple TV and replaced the outdated Apple remote. It uses the Siri smart assistant to enable voice search and data input and is enhanced with a clickable touchpad;
- Games. The concept of Apple TV gaming is all about multi-player experience. Now users can play Angry Birds, Sonic the Hedgehog and other favorite mobile games with their friends and family using the Siri remote, game controllers and iOS-compatible devices. Although game developers no longer have to implement the remote support, the device was initially meant to replace game controllers. Tech experts were ambivalent towards the Apple TV gaming experience, saying the remote was only suitable for mobile-like games that mostly rely on jumping (thumb-swiping TV App Store hits like Badland). The good thing is, you can also use a dedicated controller like SteelSeries for sophisticated games (Transistor, Manticore Rising, Asphalt 8, etc.).
Why build Apple TV apps?
Between 2014 and 2015, Apple invested over $ 8 billion in research & development. While a large sum was most likely poured into Project Titan (rumor has it that Apple is working on a self-driving vehicle), a lot of money was still spent on product upgrades – including the revamped smart TV, of course.
A few months after the TV App Store’s launch Touch Arcade published a curious article claiming a popular tvOS app was making around $ 100 on a good day. There’s the obvious lack of consumer optimism, too: the US streaming player market is currently dominated by inexpensive stick devices like Chromecast and Fire TV, and numerous bugs found in the 4th Gen Apple TV at launch only made things worse.
Was Apple TV dead on arrival?
Probably not. Despite the gadget’s obvious flaws and the somewhat shaky state of the tvOS ecosystem, quite a few companies have launched TV apps to promote their brands through a new channel and shared their positive experience.
What industries can benefit from developing an Apple TV app?
E-commerce & Retail
“With Apple TV, you have a perfect environment for rich media like video and high resolution images providing a totally different shopping experience that can be used at home or in-store”
Marc Biel (CEO of Shopgate)
- 29% of online purchases are made on mobile;
- 60% of the top 100 global retailers now have a mobile website;
- “Buy online, pick in store” is trending.
Shopgate became the first e-commerce platform to offer tvOS app development services to its clients. The company integrates online catalogs with Apple TV apps, enabling store owners to manage application content through website CMS and customers to either make purchases inside an app or proceed to a retailer’s website. Shopgate treats commercial breaks as a perfect opportunity to shop. The Golden State Warriors and Oklahoma City Thunder NBA teams successfully use the Shopgate SaaS platform to sell merchandise to basketball amateurs – and it looks like more retailers will jump on the trend in the near future.
Another example comes from Gilt Groupe. The Gilt Apple TV app displays a carousel of clothing options (including pricing and sizes) and works great with the Siri remote. The app uses simple navigation logic and places the “buy now” button next to each catalog item. Going Apple TV was an obvious choice for Gilt since 80% of their mobile sales come from iOS devices.
“We believe the new Apple TV will make shopping from home even more compelling”
Michelle Peluso (CEO of Gilt)
Apple soon realized shopping on a big screen could revolutionize customer experience – and made it a separate category on both TV and ordinary App stores.
Tourism & Hospitality
“Travelers spend a lot of time planning, visiting as many as 38 websites before booking, and there is evidence that planning the trip can bring more happiness than the actual vacation”
Jessica Plautz (Mashable)
- Tourism is one of the world’s largest industries with the global economic contribution of $ 7.6 trillion (2014);
- Tourism apps are the 7th most-downloaded type of mobile software;
- 45% of smartphone owners use apps while planning a holiday.
As of now, tourism and hospitality Apple TV apps only promote hotels and locations (you can’t book a trip directly from your app). Yet, it’s the so-called “shared experience” that drives travel agencies and hotel chains to the new platform. With a beautiful TV app users can plan a vocation with their friends and family, looking through high-quality photos on a big screen. It’s a perfect way to brew a strong desire to travel (and gently push customers to the purchase stage).
Airbnb was one of the first companies to jump on the tvOS bandwagon. The app features high resolution pictures of homes & flats to rent from all over the world; location descriptions are limited to one or two lines of text. Users can swipe through the pics and save favorite locations to their wish lists.
“We think travel is best when it’s shared.”
Scott Raymond (engineering manager at Airbnb)
FlightBoard is by all means the most successful Apple TV travel app to date. The application provides relevant flight arrival & departure data from over 4 thousand airports worldwide. It also enables users to search flights by city and airline. As of November 20, 2016, FlightBoard (priced at $ 3.99) is the 14th top paid application on the store.
Wellness & Healthcare
- There are over 165 thousand wellness & healthcare mobile apps on the market (two thirds focus on general health issues like fitness, yoga and stress relief);
- 40 million US smartphone owners use a fitness or wellness app (with weight loss and nutrition tracking taking the lead);
- By 2017, healthcare and wellness mobile apps will be downloaded 1.7 billion times.
When it comes to Apple TV, Health and Fitness apps are doing pretty well, too. With no corresponding iOS entry, Fitness – Beachbody on Demand is #1 free & # 3 top-grossing app in its parent category and makes decent money through in-app purchases.
Despite being available for free, Daily Burn, the fitness pioneer of TV App Store, is currently ranked 1st top grossing app in its category. Paid users can access 20 challenging workout plans and monitor progress using the complimentary DailyBurn Tracker iOS application. Daily Burn is also available on Roku, Samsung Smart TV and Amazon Fire.
The popular category is not limited to fitness and yoga. The TV App Store offers several high-quality apps for relaxation and stress relief. White Noise (#2 paid Health & Fitness app) features 40 ambient sounds that help users reduce anxiety and relax after a hard working day. Magic Flowers, the visual healing application, uses beautiful timelapse flowers and nature sounds to create a relaxing atmosphere in your living room. Apple featured Magic Flowers in the “Best New Apps” category; it is the 19th best-selling paid Health & Fitness app on the store.
Building Wellness & Healthcare apps for Apple TV is a great way to showcase your video content on a big screen. However, there’s more to TV apps than you think.
Most Health & Fitness applications back up a smart gadget (training equipment, wristband, medication dispenser, etc.). With the launch of Apple HomeKit, Apple TV may soon become a universal hub for home appliances and iOS-compatible smart devices. After all, Apple is no stranger to the Internet of Things and Artificial Intelligence (technology that can potentially boil down terabytes of raw IoT data to something meaningful). In fact, Siri remains the best example of natural language interpretation program on the market.
“Although Apple TV is unlikely to trump the colossus of mobile gaming, it holds incredible promise, so its impact is likely to be significant. Considering tvOS is similar to iOS, which is already the go-to mobile platform for most experienced game developers, the foundation for new, innovative content to come into existence on Apple TV is already there.”
Björn Larsson (founder of Legendo Entertainment)
- In 2016, the global games market is projected to reach $ 99.6 billion (with mobile games driving 37% of the total revenue);
- Games account for 24.43% of all applications on the App Store (the leading app category);
- Gaming apps make up 75% of the global iOS revenue.
Apple TV could be a gold mine for game developers. tvOS is a totally new platform that is still pretty similar to iOS. There’s much less competition on the TV App Store (at least for now). If you check the TV App Store’s top 50 paid games, you’ll find only 5 apps priced at less than $ 1.99. Traditional app monetization strategies (including in-app purchases and advertising) work on Apple TV, too. Provided you address an experienced vendor who’s familiar with the AppLovin ad SDK, you’ll be able to seamlessly integrate large format ads into the game environment.
Most successful tvOS games are TV extensions of popular mobile franchises. Badland (currently #2 paid app) was released in 2013 and became an instant App Store success, winning Apple’s Game of the Year Award the same year. The Frogmind team could simply port their game to Android, Xbox, PlayStation and Apple TV and call it a day. Instead, the vendor chose to redesign controls, add new content and use the multiplayer option. It seems like the hard work’s paying off, right?
Another example comes from Snowman, the independent developers from Toronto who spent 18 (!) months readying their Alto’s Adventure app. The game hit the App Store in early 2015 and received universal acclaim. Snowman went on to launch the game for Android, Kindle Fire, Windows and Apple TV (where it’s currently ranked 1st on the paid app list).
Building games is always hit or miss, no matter what platform you choose. Provided you write a creative gameplay, focus on user experience and address a reliable vendor, your acquaintance with the TV App Store will be most pleasant.
Media & Entertainment
- By 2017, the global media and entertainment market will be worth $ 1.89 trillion;
- Entertainment is the fifth most popular app category on the App Store;
- In 2016, 16% of US television viewers unsubscribed from Pay TV services.
Last year CBS announced the much-anticipated Star Trek revival on the CBS All Excess on-demand service only. Fox no longer publishes day-to-day viewership ratings, because over-the-top video content now prevails over traditional television. US top mobile providers including Sprint and AT & T created new marketing campaigns to emphasize their unlimited wireless data offerings.
If you run an Entertainment & Media company, you ought to know one simple truth. Creating video content to attract eyeballs is no longer enough. Instead, you should turn viewers into fans – the loyal target audience who share similar values and come back to your channel on a daily basis.
Why not develop an Apple TV app and start building your fanbase now?
The TV App Store is currently dominated by large content providers including Netfix (#1 top grossing app), YouTube (#2 free app), Showtime (the 5th top grossing application on the store) and HBO (2nd biggest money maker). There were unexpected E & M hits, too. The 2015 holiday season was quite successful for fireplace apps (visually rich applications that feature timelapses of a burning fire).
- In 2014, the majority of financial brands increased marketing investments in social media (58%), mobile (59%) and online video (57%);
- By 2018, the US finance and insurance jobs will grow by 12% (plus 720 thousand employees);
- Finance and insurance amount for 7% of US GDP ($ 1.2 trillion).
Back in October, Fidelity Investments launched an Apple TV app to enable customers to study current market stats and generate investment ideas while they’re engaged in other activities. The app is integrated with the live Bloomberg TV news and provides real-time quotes from the world’s leading markets. It runs seamlessly on all iOS/tvOS devices including Apple Watch and doesn’t require login data.
However, the first business & finance TV app was developed by Bloomberg in 2013. They revamped the application for tvOS and now offer a live stream of business news and on-demand video content to its subscribers. The company decided to launch a TV app after its success with video content on mobile and 11% YOY growth of video consumption online.
Currently there are 30 business & finance apps on Apple TV (including Wall Street TV, StockEx and Gerber Kawasaki TV).
“Looking for a home impacts the whole family. With the new Apple TV, everyone can gather together to view beautiful images of homes and feel like a part of this major decision”
Jeremy Wacksman (CEO of Zillow)
- In 2016, the global real estate market is expected to grow by 2%, with investments growing by up to 6% ($ 1 trillion);
- Real estate is the largest US asset class ($ 40 trillion);
- The real estate software market will grow 5.04% in less than 3 years.
Zillow, the famous online real estate database company that lists over 110 million homes on its US catalog, launched the Real Estate by Zillow Apple TV app (currently #38 on Top 50 Free Apps Chart) back in October enabling potential customers to watch high-quality video content on a big screen and make the right buying decisions.
Trulia, a real estate website acquired by Zillow for $ 3.5 billion, joined the Apple TV team several months ago. Using the app, people who consider buying a house or look for an apartment to rent can go on virtual home tours and get an insight on neighborhoods (infrastructure, crime rate, school ratings, etc.).
As of now, the Apple TV Real Estate app category features 15 applications (including Toronto Real Estate, Homesnap and Keyboom!).
Apple TV: what does the future hold?
While some reviewers were quick to label the 4th Gen Apple TV a flop, I would call it a mild commercial success instead. There are several reasons why the highly anticipated device underperformed:
- Wrong pricing strategy. Upon its launch, the new Apple TV was priced at $ 149/199 for a 32GB and 64GB player, respectively. With the voice search capabilities, stylish remote and tvOS app store, Apple certainly put all of their eggs in one basket and didn’t realize Roku and Amazon were offering similar functionality at a lower price;
- Lack of promotion. Unless you follow Apple news and rumors websites, the chances are you didn’t even know they had a new streaming player out;
- Bad timing. The 3rd Gen Apple TV was released back in 2012. 3 years is a long time for a tech product; after all, the company completely overhauls iPhone design and functionality every two years.
With that said, Apple is expected to release the 5th Generation TV set (Apple TV 5G) before the NY or in early 2017. During the 2016 Apple earnings report conference Tim Cook called 2016 “another incredible year” and hinted towards a big revival of the company’s TV division. He went on to say the company was building the foundation for “what we believe can be a broader business over time”.
Although no new hardware has been announced so far, Apple made considerable changes to the tvOS 10 operating system, enabling users to search for movies and YouTube videos through voice commands and operate the Siri remote using the built-in speaker.
I’d like to end the article with a quote that perfectly defines the current state of Apple TV and tvOS applications:
“Brands need an audience, and for now, that audience is relatively small and brands don’t care about it enough to do more than spend a little test budget. But when it gets more mainstream and there are more ways to consume content, that’s going to change.”
Adam Foroughi (CEO of AppLovin)
By 2020, video on demand services will be used by 70 million US households. It’s going to be a huge market, and if you don’t enter it today (while the competition sleeps), you may fail to do so later on when building Apple TV apps becomes a trend of its own.