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Everyone is wondering what Apple should do with some of its $97 billion. I’m not a tech blogger. And, I’m sure everyone will tell me what a stupid idea this is. But, what the hell?

I think Apple should create digital entertainment content. Gasp!

More specifically, I think Apple should create what we currently think of as television shows. Really amazing ones.

It used to be that HBO was the only content distributor that had become a successful content creator. Now Showtime has done Dexter, Weeds, and Homeland. AMC has done Mad Men, Breaking Bad, and The Walking Dead. FX has done Nip/Tuck and Justified. USA Network has done…what they do. DirectTV and Netflix are getting in. And, I would argue that Starz’s first show, Boss, was the best show on television in 2011.

Apple controls iTunes, the iTunes Store, QuickTime, Final Cut Pro (yeah, yeah, I know), Mac OS X, iOS, and Apple TV. The Apple TV “hobby” is actually selling much better than it has in the past. Apple has deep ties to Hollywood. It makes quality products and markets them brilliantly. And, it is sitting on more than $97 billion.

Right now, the iTunes Store and Apple TV have a content problem. Shows air on broadcast or cable first for “free”. At best, they come to iTunes and Apple TV a day or two later. At worst, a premium cable show may not arrive for many months. Apple needs to make iTunes Store offerings “destination television”.

What if several of the best, buzziest shows out there didn’t come to iTunes/Apple TV after a delay but were on iTunes/Apple TV first or even only?

Apple has the technology, connections, focus on quality, cash, and cachet to make us all cable cutters. I just hope it has the desire and drive.

PC World’s Brennon Slattery weighed in yesterday about “Five iPod ‘Let’s Rock’ Updates That Should Have Been”. My thoughts on his thoughts:

1. Wireless iPods That Sync Directly to iTunes

I agree with Slattery here, but only to a point.

The iPhone and iPod Touch already have WiFi and already can use it to purchase music and applications from the iTunes Store. So, adding the ability to sync audio, apps, and photos via WiFi between iTunes on a Mac/PC and the iPhone/Touch wirelessly is a logical next step. I hope Apple takes it.

To protect battery life, syncs should still be manual and there should be limits on the number or size of new items that can be synced wirelessly. Given the large file sizes of videos, video syncing would likely have to still require a cable.

Where I part company with Slattery is adding wireless and wireless syncing to the Nano or the Classic.

The Nano is smaller, thinner, lighter, and cheaper than the iPhone or the Touch. Adding WiFi will increase the size of the Nano and drain its small battery much faster. Enhancing the Nano’s battery will further increase size. And, adding WiFi or an enhanced battery will increase cost.

The Nano starts at $149 and Apple would be unwise to move up from that price point. As WiFi hardware gets smaller, more energy efficient, and cheaper, maybe it can come to the Nano. But, we’re not there yet.

The iPod Classic is a relic on its way to the graveyard. Apple keeps it around because for no extra R&D they can sell the Classic to a few people who think they simply must have 120GB of digital media with them at all times. Apple shouldn’t invest any in additional R&D on the Classic and I doubt it will. As Marco noted, as soon as larger-capacity flash memory is available at a reasonable cost, the Classic will likely be retired.

2. Anything to do with the iPod Classic

Ugh. See paragraph above.

3. Radio Tuner

Meh. I’m not against having a radio tuner in iPods or the iPhone. And, it could probably be done without a lot of added weigh, thickness, or cost. But, do users really want a radio in their iPod? I’m guessing not.

Reception on small, portable radios is often poor. And, many people get an iPod so they can avoid advertising and exercise direct control of what music they listen to and when.

Those that want radio badly can already buy the external radio remote from Apple. And, there are alternatives to an actual radio on the iPod.

You can subscribe to podcasts from many radio stations, including podcasts for many NPR shows that Slattery and I love. (Admittedly, there are often time delays between a radio broadcast and the availability of a podcast of it.) And, if you have an iPhone or an iPod Touch with a wireless connection, you can use streaming audio applications that give you radio content. (Admittedly, the particular station you love may not be available in a streaming audio app.)

4. iTunes Subscription Service

Sorry to be repetitive, but meh. I’m not against having an iTunes subscription service either. But, I like to own my music content. And, I spend less on buying content of all types in an average month than other existing services would charge me for a monthly subscription. So, I probably won’t use an iTunes subscription service even if it comes.

The lack of a subscription service hasn’t seemed to hinder iPod sales or iTunes Store sales. Perhaps this just isn’t that big of a deal for most people.

5. The Beatles

Oh, please. Get over it. Steve Jobs has said Apple is ready when The Beatles are ready. It’ll happen when it happens. Haven’t you already bought the CDs and ripped them anyway? If so, what will The Beatles coming to the iTunes Store really get you? A nice digital booklet?

Random thoughts on today’s Apple Event:

• I loved how Steve handled (yet did not handle) the health question at the outset. Masterful.
• For me personally, the biggest news is that iPhone backups are getting faster and hopefully the dropped calls issue is being put to bed. Both cause ongoing pain. Can’t wait for the 2.1 release on Friday!
  
• I like revisions to the Nano and Touch a lot and they make for a compelling Christmas lineup along with iPhone. I hadn’t heard the accelerometer was coming to the Nano and am pleasantly surprised. Being able to shake in order to shuffle your songs is awesome!
• Glad HD TV shows are on iTunes and that NBC is back. This will make the Apple TV a stronger competitor against Netflix and Amazon/TiVo.
• $2.99 for one TV episode in HD feels pricey to me, but perhaps I just need to adjust.
• The iPod Classic is rapidly becoming the fruitcake that’s somehow always around at Christmas, yet few seem to want to eat. I give it one more year tops.
• I will have to play with the Genius feature in iTunes 8 before I know if I like it. Last.fm and Pandora have never been great at finding or pairing music for me.

While I will plead guilty to a long-term love affair with Apple, I’m not naive. Steve Jobs and Apple make decisions that are in the best interests of Apple first, shareholders second, and consumers third.

That said, I think Daniel Lyons (a.k.a the retired Fake Steve Jobs) is greatly exaggerating some of Apple’s actions in his “One Bad Apple” Newsweek article. Apple is far from perfect, but it doesn’t deserve many of these attacks. Let’s look at what’s accurate and what’s not so accurate.

That Vudu That Apple Does So Well?

Lyons paints Vudu as a victim targeted for termination by Apple in the market for streaming/downloadable video to home televisions. So Apple is evil for competing in this market? And, Apple is the only bad guy victimizing Vudu?

It’s not as if Vudu created this market and then Apple stole it from them. Apple has had a long-term interest in consumer digital video delivery and has done as much as anyone to create that market. (QuickTime, iTunes and iTunes Store with video, iPods with video, iPhones, Apple TV, etc.) Apple certainly didn’t make or revise the Apple TV simply because of Vudu.

I have no doubt that Apple was already focused on supporting rentals, broadening its movie catalog, and allowing direct movie downloads without a computer. Jobs said all along that Apple TV 1.0 was a “hobby” that they were working to perfect. And, lots of users and analysts were publicly calling for the features that came in Apple TV 2.0. They were not simply copied from Vudu.

Also, why don’t Netflix, Amazon/TiVo, or cable companies with On Demand get any “blame” for Vudu’s plight in Lyon’s article. If Vudu is laying off staff, I doubt that all of the blame can be laid at Apple’s door. The market for streaming/downloadable video to home TVs is a competitive place with major players.

Apple Owns Boardwalk and Park Place?

Lyons writes that:

“Apple owns popular hardware platforms (iPod, iPhone) and operates the only store that can sell music, movies and software programs for those platforms. Apple sets prices and takes 30 percent of the money. With iPhone, Apple decides which independent applications will be allowed, and it can pull the plug on any application at any time, without explanation<snip>”

Let’s break this tortured mess down:

• Apple operates the only store that can sell music for iPod/iPhone. As George Carlin would say, pure bullshit. The iPod and iPhone play numerous audio formats, including MP3s. It is a simple matter to buy music from Amazon MP3 or other online stores, put it into iTunes, and get it onto an iPod or iPhone. It is also a simple matter to purchase a CD, rip it in whatever audio format you like in iTunes, and get it onto an iPod or iPhone. Apple does not have a music monopoly on the iPod or iPhone and Lyons should be ashamed for implying it does. The fact that many iPod/iPhone users choose to use the iTunes Store to buy music doesn’t make the iTunes Store a music monopoly.
• Apple operates the only store that can sell movies for iPod/iPhone. Lyons is on firmer ground here, but just barely. No movie studio is allowing its films to be sold online without some sort of Digital Rights Management. And, there’s no standard for DRMed video. So, different stores and devices are using different DRM methods. That’s a shame, but it’s not Apple’s fault. If and when there is a standard for DRMed video, I think Apple should support it on iPods and iPhones. In fact, I’d love to see Apple show leadership in the creation of such a standard. Until then, I think it’s unfair to criticize Apple when no one else is offering a non-proprietary video store. Finally, if you are willing to use third-party software, it is already possible to get DVD video onto an iPod or iPhone.
  
• Apple operates the only store that can sell applications for iPod/iPhone. True. And, I would like to see this change. I applaud Apple for making it easy for developers to sell their applications and get payment, and for making it easy for users to purchase and install those applications. But, the App Store is a monopoly and I think it would be in the best interests of users for them to have more options for where and how they purchase apps. I won’t hold my breath.
  
• Apple sets prices and takes 30 percent of the money. This is a true statement for iPod/iPhone applications. But, it is untrue for music and video purchases and again Lyons should be ashamed for implying it. While I don’t know the specifics of the deals Apple has with record labels and movie studios, I do know that Apple is thought to only get a few pennies for each 99-cent audio track purchase. While the cut may be higher for video, I seriously doubt it’s anywhere near 30 percent. Is 30 percent too high of a cut for the iPod/iPhone App Store? I don’t know, ask a developer. Apple does help developers promote their applications, it handles all the financial transactions from sales, and it automates the downloading and installing of purchased applications. That’s certainly worth something.
  
• Apple decides which iPod/Phone apps will be allowed and it can pull an app at any time, without explanation. True. And, again, I would like to see this change. While this power can be used to ensure quality apps and to prevent fraud, it can also easily be abused. I think users who want to have this control for themselves should be able to have it. Again, I won’t hold my breath.
  

No White iPod Cases Allowed After Labor Day?

Last on his list of Apple gripes, Lyons takes the company to task for how it treats the makers of iPod and iPhone accessories. He says that Apple controls when accessory makers can announce new products, charges various fees to accessory makers, and takes large cuts on accessory sales in Apple retail stores (75 percent of the sales price in one noted case).

I have little knowledge of how Apple’s relationships with accessory vendors work. So, I don’t know whether these things are true or not.
If Apple asks a vendor to hold off on an accessory announcement because the physical design of an iPod/iPhone is changing and thus invalidating the accessory, that’s certainly reasonable. Beyond that, I don’t think a hold is reasonable.

I would have to see the specifics of the fees and sales cuts charged to have an opinion on whether they’re reasonable. Seventy-five percent is insane if true! But, I will say when it comes to sales cuts, keep in mind we live in a capitalist system. As Lyons own article somewhat notes, if you don’t like the deal the Apple Store is giving you to sell your accessory, go sell it at WAL-MART, Best Buy, Circuit City, or Target. Or, use an online store like Amazon or your own e-storefront.

Bring Back Fake Steve!

In closing, I want to say two things. First, Apple is an amazing, yet flawed company. It does many stupid and greedy things, just not all the stupid and greedy things mentioned in Lyons’ piece.

Second, I miss Fake Steve Jobs dearly. I found Lyons was more interesting, insightful, and (oddly) more accurate when he wrote about Apple as Fake Steve. Can we please, please, please have Fake Steve back?

I’ve been a loyal Apple iTunes Store music buyer for years and have never really cared that my music had DRM or that it’s in the AAC format. My music worked on my computer via iTunes, on my iPod with headphones or a speaker, on my car stereo with an iPod adapter, and on my TV via Apple TV. What more could I want?

Well, I’ve recently been enjoying listening to what people are putting on Muxtape and am loving audio on Tumblr more than ever with the new Sound Box alpha. But, I now realize that I can’t easily add my own audio to either service.

Most of my audio is DRMed AAC from the iTunes Store. So, unless I want burn CDs and re-rip tracks or use something like Audio Hijack Pro, there’s no way to convert it to an MP3 suitable for streaming on Muxtape or Tumblr. And, while the iTunes Plus audio isn’t DRMed, I would still have to use a third-party application to convert it to MP3 before being able to share it. Painful.

What got me thinking about of this was noticing that Muxtape has started letting users buy audio tracks from the Amazon MP3 Downloads store. I had never given Amazon’s online music offering a spin before today and I’m pretty impressed.

It’s not as easy-to-use or slick as the iTunes Store, but Amazon MP3 Downloads has lots to recommend it. It lets you buy high-quality, DRM-free MP3 tracks at reasonable prices in a web interface and makes it a snap to automatically import the tracks into iTunes or Windows Media Player (yuck!).

After my love affair with the Kindle, I was so enamored with Amazon that I bought its stock. (Sadly, AMZN has pretty much tanked since I got it.)  Because of its MP3 format and the lack of DRM, I may be an Amazon MP3 Downloads convert too. If Apple doesn’t cut some non-DRM deals with the other record companies soon, I’m betting a lot of people will be joining me.

Francisca and I have loved numerous HBO shows for years. Entourage continues to be one of our favorites and we like what we’ve seen so far of In Treatment. I say “what we’ve seen so far” because we don’t actually get HBO. We’re watching the first 15 episodes of In Treatment on our Apple TV via the free official podcast and getting Entourage via DVD.

We made a decision to cancel cable (including HBO) last year, because we didn’t watch enough TV in an average month to justify $89.70 a month plus tax. (That happens to be the minimum non-teaser price from our cable company to get a package that includes HBO.)

Many of the shows we watch are available for free via an HD Over-The-Air antenna that works with our HD TiVo. And, most of those that aren’t can purchased for $1.99 either via iTunes and sent to our Apple TV or via Amazon Unbox and sent to our TiVo.

I say “most” because HBO doesn’t sell any of its content on iTunes or Amazon Unbox. I would happily pay HBO $1.99 per 30-minute episode of In Treatmemt, which seems more than reasonable to me, if it would just sell the show digitally. But, it won’t.

Hell, HBO doesn’t even sell old, discontinued content digitally. If you want to watch Six Feet Under from 2001 or Sex in the City from 1998, it means buying or renting DVDs. Is HBO seriously thinking that digital sales would cannibalize DVD revenue for content that old? It strikes me as a company that just doesn’t understand where content delivery is heading.

Up until recently, HBO was by far the best content provider on cable and so could dictate the terms of content delivery. I think that is going to change. Networks like FX, AMC, and Showtime are creating great shows and selling them digitally (though sometimes after a delay from when they aired on cable). The earth is moving under HBO’s feet.

At some point, I think people will tire of paying their HBO Tax and want to get their content when and how they want it. Let’s just hope that HBO wakes up to this fact sooner rather than later, as I really would love to keep watching its shows.

Marco just wrote about his frustrations with paying so much for entertainment cable and getting so little in return. I reached this same boiling point a few months back, though my frustrations extended to Internet access in addition to entertainment cable. So, I killed cable and here was my solution:

• We switched from a cable modem to Verizon FiOS. It’s a lot faster for about the same money as I was paying for my cable modem. (Admittedly, not everyone can get FiOS, but there is probably a solution that is as good or better than your cable modem for about the same money.)
• My wife and I already didn’t have a home phone and we still don’t. With mobile phone, Skype, iChat, etc., a home phone is just more money, another number to remember, and another voice mail to check.
• I bought an HD Over-The-Air Antenna and a TiVo Series 3 (the lower-end model). So, we can now record broadcast content in HD for free. Sweet. As bonus, I can use the TiVo Series 3 to view Amazon Unbox content, which includes a pretty extensive TV and movie selection.
• I also bought an Apple TV, so we can view content from the iTunes store on our TV.
• We already had a DVD, so we can still buy or rent DVD content.

So, now we don’t pay for cable at all. We either get our entertainment in broadcast HD for free or we purchase/rent the specific content we want via Amazon Unbox, iTunes Store, or DVD. (If you watch live, non-broadcast sports, this plan won’t work for you. But, that’s not an issue for us.)

The upfront costs of all of this were significant, I won’t deny that. But, the monthly TiVo subscription of $17 is our only monthly payment now for TV entertainment. No cable bill. And, buying/renting the content we can’t get free via broadcast is costing a small fraction of what our cable bill did. Best of all, during the holidays and the writers’ strike, while everyone else is paying $80 or more a month for re-runs and reality shows, we’re only paying $17 for our TiVo.

We’re saving enough money that we’ll probably recoup our initial costs within a year a two. And, I so love not giving the cable company money each month!