Apple may have whiffed on its Apple TV+ announcement Monday by offering too few key details about the service. But the company did say that its TV app was coming to Roku and Fire TV devices, essentially sounding the death knell for Apple TV.

Apple had been telegraphing this move for months. At CES, the company announced that a version of iTunes was launching on Samsung smart TVs later this year and touted incoming AirPlay 2.0 support for smart TVs from Samsung, Sony, LG and Vizio. These moves, while not a complete distribution strategy by any means, signaled Apple’s willingness to break down its walled garden for the sake of getting its video service further out into the world.

Wide distribution is key if Apple wants to take on Netflix—which is the notable holdout for Apple’s video aggregation scheme. As Strategy Analytics pointed out, Apple’s new TV app (arriving via update in May) is starting out with a huge built-in disadvantage, with only 175 million addressable TVs compared to more than 900 million for Netflix.

Apple has plans to close the gap. The company is launching the TV app on Mac this fall; launching on smart TVs, starting with Samsung in spring followed by LG, Sony and Vizio; and on Roku and Amazon Fire TV devices “in the future.”

The Roku and Fire TV agreements were the announcements of the day, according to Alan Wolk, co-founder and lead analyst at consulting firm TV[R]EV. He pointed toward a tweet from Prashanth Pappu, founder of Vizbee, as a good summation of why those two deals are significant.

Wolk said that Apple used to be able to sit back, wait until an emerging product category became nascent, and then swoop in with a superior product and take over. But lately that strategy has failed, with Apple Music still dwarfed by Spotify and the pricey HomePod lagging behind Amazon and Google in the smart speaker market.

Apple TV is another example of the company’s hardware strategy falling flat. According to Parks Associates figures from the first quarter of 2018, Amazon and Roku combined control more than 50% of the streaming device market among U.S. broadband households. Apple has about 15% of the market. A big contributing factor to Roku and Google’s market dominance over Apple TV has to do with their $30 price points compared to Apple’s $180.

“There aren’t that many people going ‘I want to spend six times as much money,’” Wolk said.

Apple has been able to create perceived value because its products are so expensive. But Apple’s rigid adherence to premium pricing has come back to bite the company in the form of iPhone sales plateaus and sagging revenues for the company’s other devices.

“They’ve hit a point of diminishing returns,” Wolk said.

That hardware conundrum had sparked Apple’s renewed focus on growing its service revenues. The strategy appears to be paying off. In January, Apple said fiscal first-quarter services revenue reached an all-time high of $10.9 billion, up 19% over the previous year. That figure could keep climbing considering that, in addition to its video streaming service, Apple on Monday announced a subscription news and magazine service, a credit card and a streaming video game service.

The tradeoff for this services pipeline, at least in terms of video, appears to be the abandonment of the Apple TV. Once the Roku, Amazon and various smart TV deals are in place for the TV app, the Apple TV will essentially become an overpriced streaming box stripped of some of its exclusivity with Apple software and services like TV+.

Wolk said that at that point, Apple can let the Apple TV slowly die off and stop pushing upgrades; or do a complete reboot and put out a less expensive version of the device, similar to what the company did with the iPod Nano.

“I would think the former is more likely,” Wolk said. — Ben | @fierce__video

A Google executive offered new details on Wednesday about the company’s upcoming video game streaming service, telling Reuters that game makers may use competing cloud providers and must avoid some inappropriate content.

Google, owned by Alphabet Inc, unveiled Stadia on Tuesday, saying the service launching this year would make playing high-quality video games in an internet browser as easy as watching a movie on its YouTube service.

The game would operate on Google’s servers, receiving commands from a user’s controller and sending video streams to their screen. Player settings, leaderboards, matchmaking tools and other data related to the game would “not necessarily” have to reside on Google’s servers, Phil Harrison, a Google vice president, said in an interview.

Hosting the data elsewhere, however, could lead to slower loading times or less crisp streaming quality, he said.

“Obviously, we would want and incentivize the publisher to bring as much of their backend as possible” to Google servers, he said. “But Stadia can reach out to other public and private cloud services.”

The approach could limit Google’s revenue from Stadia. It has declined to comment on the business model for the new service, but attracting new customers to Google’s paid cloud computing program is one of Stadia’s aims.

If a game publisher was using Amazon for some tools, “the first thing I would do is introduce you to the Google Cloud team,” Harrison said.

In addition, Stadia will require games to follow content guidelines that build upon the system of Entertainment Software Rating Board (ESRB), a self-regulatory body, he said.

“We absolutely will not have A-O content,” Harrison said, referring to the ESRB’s moniker for the rare designation of a game as adult-only because of intense violence, pornography or real-money gambling.

He said Stadia’s guidelines would not be public.

Asked about growing public concerns about game addiction, Harrison said Stadia would empower parents with controls on “what you play, when you play and who you play with.”

Google views Stadia as connecting its various efforts in gaming, including selling them on its mobile app store, Harrison said. But game streaming, he said, is an opportunity to tackle among the most complex technical challenges around and potentially apply breakthroughs to other industries.

“We think we can grow a very significant games market vertical,” he said. “And by getting this right we can advance the state of the art of computing.”

Google is not working on a bespoke search engine that caters to China’s totalitarian tastes, and it has no plans to develop one, CEO Sundar Pichai told lawmakers on Capitol Hill Tuesday.

“Right now, we have no plans to launch in China,” he told members of the U.S. House Judiciary Committee at a public hearing on Google’s data collection, use and filtering practices.

“We don’t have a search product there,” he said. “Our core mission is to provide users access to information, and getting access to information is an important human right.”

Pichai acknowledged that the company had assigned some 100 workers to develop a search engine for totalitarian countries, however.

“We explored what search would look like if it were to be launched in a country like China,” he revealed.

A report about a Google search engine for China appeared in The Intercept this summer.

The project, code-named “Dragonfly,” had been under way since the spring of 2017, according to the report, but development picked up after Pichai met with Chinese government officials about a year ago.

Special Android apps also had been developed for the Chinese market, The Intercept stated, and had been demonstrated to the Chinese government for a possible rollout this year.

“We certainly hope they abandoned those plans,” said Chris Calabrese, vice president for policy for the Center for Democracy & Technology, an individual rights advocacy group in Washington, D.C.

“We didn’t think it was a good idea to build a search engine that would censor speech in order to go into the Chinese market,” he told the E-Commerce Times.

Google may have been testing the waters with its Chinese browser, maintained Russell Newman, assistant professor for the Institute for Liberal Arts & Interdisciplinary Studies at Emerson College in Boston.

“It’s an example of a firm seeing how far down the road it can go before it receives pushback,” he told the E-Commerce Times. “It discovers a limit, then pushes that limit a little more. I’d be surprised if they wholly gave up on the search engine for China.”

Mission: Protecting Privacy

In his opening remarks to the committee, Pichai declared that protecting the privacy and security of its users was an essential part of Google’s mission.

“We have invested an enormous amount of work over the years to bring choice, transparency and control to our users. These values are built into every product we make,” he said.

“We recognize the important role of governments, including this committee, in setting rules for the development and use of technology,” Pichai added. “To that end, we support federal privacy legislation and proposed a legislative framework for privacy earlier this year.”

Pichai also addressed a burning issue for Republican members of the panel.

“I lead this company without political bias and work to ensure that our products continue to operate that way,” he said. “To do otherwise would go against our core principles and our business interests.”

‘Bias Running Amok’

Among the Republicans on the committee who raised the issue of unfairness with respect to the way Google’s search algorithm treats conservative views was Mike Johnson, R-La.

“My conservative colleagues and I are fierce advocates of limited government, and we’re also committed guardians of free speech and the free marketplace of ideas,” he told Pichai.

“We do not want to impose burdensome government regulations on your industry,” Johnson continued. “However, we do believe we have an affirmative duty to ensure that the engine that processes as much as … 90 percent of all Internet searches, is never unfairly used to unfairly censor conservative viewpoints or suppress political views.”

Political bias is running amok at Google, charged committee member Louie Gohmert, R-Texas.

“You’re so surrounded by liberality that hates conservatism, hates people that really love our Constitution and the freedoms that it’s afforded people like you, that you don’t even recognize it,” he told Pichai, who was born in India.

“It’s like a blind man not even knowing what light looks like because you’re surrounded by darkness,” Gohmert added.

Despite Republican claims of liberal bias in Google’s algorithm, “there isn’t any evidence to back that up empirically,” Calabrese said.

Market Dominance

Committee members also were concerned about Google’s market dominance.

“I’m deeply concerned by reports of Google’s discriminatory conduct in the market for Internet search,” said David Cicilline, D-R.I.

Google has harmed competition in Europe by favoring its own products and services over rivals, and by deprioritizing or delisting its competitors’ content, he noted citing European Commission findings.

“It is important for the U.S. government to follow the lead of other countries and closely examine the market dominance of Google and Facebook, including their impact on industries such as news media,” observed David Chavern, CEO of the News Media Alliance in Arlington, Va., a trade association representing some 2,000 newspapers in the United States and Canada.

“We will continue to urge for more hearings to examine ways in which the duopoly impacts the business of journalism, which is essential to democracy and civic society,” he told the E-Commerce Times.

Prelude to Privacy Law

House and Senate hearings in recent months are just the prelude to data privacy legislation that could be introduced next year.

“We’re certainly going to see a wide variety of comprehensive privacy bills filed, and I think we’ll make some progress,” Calabrese said.

“Advocates have seen the need for privacy legislation for a long time,” he said, “and now that we have privacy legislation set to kick in in California in 2020, there’s a lot of companies who would rather be governed by a federal law than they would a bunch of different state laws.”

If a general privacy law is enacted, it shouldn’t use Europe’s General Data Protection Regulation as a model, maintained Alan McQuinn, senior policy analyst for the Information Technology and Innovation Foundation, a public policy and technology innovation organization in Washington, D.C.

“We don’t want to see the GDPR enacted here in the states,” he told the E-Commerce Times.

“It is highly likely to create a drag on the European economy and hurt innovation and businesses,” McQuinn explained.

Privacy rules should be styled to fit industries, such as healthcare, finance and commerce, he suggested.

“The sector-specific approach that the U.S. has taken toward privacy has allowed for more innovation,” McQuinn noted, “and created the powerhouse of the digital economy that we have here.”