In a previous post, I wrote that Apple TV, even in its latest incarnation, is still crippled by the restrictions placed upon the content that can be purchased for view. These restrictions come not from Apple, but instead from "big content" - the handful of mega-corporations that control everything that we see and hear in the mass media (movies, TV, music from major labels). I wrote that it is these restrictions (finishing a rental 24 hours after you start watching it, waiting 30 days for hit movies to show up on iTunes, missing content on iTunes, etc) that are going to continue to keep Apple TV from becoming a huge hit, like the iPod.

However, I think that Apple is in a unique position to break this content logjam, and thus ensure a media-rich future for us all. There are a couple of things going on that make this a unique time for Apple:

1. Apple has $15 billion dollars in the bank, and the pundits and analysts are wondering what Apple is going to do with that cash.
2. There are rumors going around of Apple starting a music label, with Jay-Z.
3. The writers are on strike, hoping for residuals from Internet content. While striking, some writers are realizing that they don't need the big studios, and are instead going off and forming startups, centered around producing content that can be shown in a variety of ways (web streaming, download, traditional TV broadcast, etc).

Bring these three separate ideas together and what do you get? The possibility of Apple using some of its excess cash to fund new content-producing ventures. It is almost perfect for Apple - they don't have to hire a bunch of producers, writers, directors, etc. - they can just take a fraction of their warchest and use it much like a Venture Capitalist would - they could invest in small promising startups, enabling them to go and make some content. The only restriction that Apple would place, would be that one of the places where the content has to appear is on iTunes. If the company also wanted to do add-supported streaming through flash, that would be fine.

Content in hand, Apple could then use iTunes to promote it - putting it on the front page of the iTunes store, having it show up in recommendations for their customers, etc. There has already been some research to show that being placed on the front page of the iTunes store can be a powerful sales driver.

In effect, Apple could help to bring down the 4 or 5 big media companies that have been vexing them, and not allowing them to make the products and customer experience that they want, and in so doing create a much more fertile environment for realizing the dreams of creative hollywood.

Now, all of that being said, what are the odds of this actually happening? To date, Apple has shown that it would much rather work with the big media conglomerates than against them. Thus they haven't added DVD ripping to iTunes, nor has Apple done a DVR. Making such a move into becoming their own studio, or in reality a VC fund for new independent studios, would almost certainly antagonize the conglomerates. So, I don't see this as being very likely. However, I do think that Apple could be using this as a negotiating tactic -- in effect saying to the conglomerates: "play ball with us, or we'll start funding a bunch of upstarts that will ultimately take you down". That, I find to be highly likely (and could be the source of the Jay-Z rumor).

-Andy.

Technorati Tags: Apple, Apple TV, iTunes, Venture Capital, Startup, Jay-Z, Media Conglomerate