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Sat, Nov 21, 2009 - 07:03 PM EST  —  AAPL: 199.92 (-0.59, -0.29%)  |  NASDAQ: 2146.04 (-10.78, -0.5%)

Apple poised to reinvent TV?
Tuesday, November 03, 2009 - 10:23 AM EST

Apple Store"It seems Apple is rethinking its TV strategy, in a way that might—if the company can pull it off—give consumers the option to pay Apple less than half as much as they currently pay their cable or satellite provider for a monthy TV subscription," Peter Burrows reports for BusinessWeek.

"According to All Things Digital’s Peter Kafka, Apple has been trying to convince programmerrs to make their shows available as part of a subscription, available via iTunes. The monthly price would be around $30, he reports," Burrows reports.

"No company is as well positioned to satisfy this demand than Apple. Many carriers have plans to make their content available in more numerous, and interesting ways... But only Apple has iTunes. Hundreds of millions of people have tthis program installed on their PCs, Macs, iPods and iPhones, and more than 75 million have an ongoing billing relationship with the online store by the same name," Burrows writes. "Rather than any one product, it seems to me Apple’s greatest imperative should be maintaining iTunes’ role in these consumers’ lives. The Apple TV may never be a hit. But consumers that decide to get their TV via iTunes rather than their current provider will be much more likely to buy new Apple products down the road. Certainly, many would consider a device for watching TV that is more portable than a MacBook, but larger than an iPhone. A tablet device, for example."

Burrows reports, "All of this remains conjecture, and assumes that Apple iTunes chief Eddy Cue can land the necessary content deals. It won’t be easy, since these partners will be loath to cross their current distributors. But don’t count Cue out."

Full article here.

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Nov 03, 09 - 10:33 am Comment from: fred

this will just give broadband providers a reason to increase the monthly fees and cap bandwith.

For example, no way Comcast will tolerate losing cable tv revenue while that same customer starts hogging bandwidth to watch tv via iTunes.

Nov 03, 09 - 10:35 am Comment from: Britney's Postpartum Sister™

I've had AppleTV since the beginning and have been thrilled with it. If they launch a TV subscription service and then a movie subscription service (one or the other or both) I'll save even more money on cable expenses.

Nov 03, 09 - 10:38 am Comment from: Tom

the puzzle is the need to maintain a cable or satellite account for live sports - shows and movies i would gladly drop cable for iTunes, but is the new data center going to be bad enough to stream live sports?

Nov 03, 09 - 10:40 am Comment from: Predrag

Most of these content providers are same people that fought and lost to Apple in the music industry. Despite Apple having saved their asses and extended their corporate lives, they perceive that battle as lost and are determined to not cede control of their video and TV content to Apple as well.

It will take a lot of effort and persuasion (perhaps even by Jobs himself) to get them over. Disney should provide for an excellent start. Once Disney is on board and successful (financially), others will have no choice.

Nov 03, 09 - 10:40 am Comment from: Jersey_Trader

If Apple was going to do this, Apple would need a extremely large server farm to stream the media. Much like the billion dollar one that Apple is building in North Carolina.

You would think that the talking heads could see the obvious clues!

Nov 03, 09 - 10:46 am Comment from: DogGone

The model that is working for me is Netflix's instant offering. I can watch content via my Netflix capable BluRay player or on my computer. I'm already paying for their subscription service and the instant stuff is free.

The only downside is that offering are limited to older stuff and some content isn't available all the time.

Apple have the same capabilities with the AppleTV and your Mac or PC and iTunes. I just can't see them getting a lot of content. I would gladly cut back on my cable but the reality is that the coverage would have to be wide to facilitate that.

Apple do have a wide audience in iTunes. The question is can they offer a reasonably priced service with good content?

Nov 03, 09 - 11:05 am Comment from: M.X.N.T.4.1.

I have my TV on for hours a day, even if I'm not watching it I'll typically have it on in the background, no way my internet connection could handle that and that's only 1 tv. Only a few countries could do this as a direct replacement for TV.

Nov 03, 09 - 11:08 am Comment from: HMCIV

Comcast your days are numbered. Either FIOS or Apple will be your final undoing in my home.

Nov 03, 09 - 11:10 am Comment from: Driver

No way Apple will be able to sign up ALL the channels that would allow people to ditch even their basic cable needs. And $30 is twice what I pay for cable already. USA, TNT, the networks, etc.. that's a lot of ducks to get in a row. And are they going to charge more for HD? I refuse to pay extra just for that.

Nov 03, 09 - 11:18 am Comment from: TigerCliff

I would like to see Apple (or anyone else) succeed in a *new* model. I still want a way to see live sporting events (with DVR functionality of course). I have DirectTV and there's so much junk -- there are really only a few programs worth watching. I'd be interested in a new model to get content. The current iTunes programming and per show model isn't quite there for me yet.

Nov 03, 09 - 11:21 am Comment from: hairbo

This certainly feels like the future of TV, but I'm not sure how you deal with live sports (which I would miss) or 24-hour news channels (which...come to think of it...I wouldn't miss at all).

Nov 03, 09 - 11:22 am Comment from: Predrag

I'd love to live in a country where monthly cable bill is $15. Unfortunately, here in the US, it's more like $80 (and that excludes any premium or local sports programming). That is, unless you are fortunate enough to live in an area where you are allowed to install a satellite dish, in which case you can get away with $50 or so... Still far more than $15.

Nov 03, 09 - 11:26 am Comment from: 84 Mac Guy

Here is how it will play out.

With the economy in the dumpster for a few years, people will start dropping cable, because when the choice is: spending $85/month on cable TV or food, food wins out.

The content providers will then see their income drop like a rock as cable TV delivers fewer and fewer subscribers. When the content providers' income drops, they start to get real hungry for new sources of $.

At that point Jobs/Cue walk in and mention that iTunes poured lots of money into the music industry--money that the industry thought was lost to piracy. iTunes can do the same for you boys in the TV industry. Why don't you give us a try?

The content providers then look at their spreadsheets again, realize the Apple/iTunes have a solid record of success and the most extensive customer base for media, and then sign on the dotted line.

The bottom line is that the stars seem to be aligning for a new approach to delivering TV shows. Personally, I would love to pick the cable channels I want from iTunes every month and pay a reasonable subscription fee for each channel. In essence, every consumer could be his/her own cable company by putting together a package of channels that they want rather than the ones Comcast offers you.

This could be nirvana for TV watchers.

BTW, for the naysayers who state that Comcast will simply raise their broadband rates to stem the tide, well, that's where the free market comes in with a little help from the FCC and net neutrality rules. I have four ways to get broadband internet into my home: Comcast, Verizon, Clear (4G wireless), and satellite. If Comcast raises their price, I'm sure their competitors will be happy to accommodate the new customers at a price less than Comcast.

Nov 03, 09 - 11:29 am Comment from: UVERSE FTW

@MXNT41

I have UVERSE and ALL their content is pushed through the pipe. HD looks great, stream NEVER stutters. I'm getting 25MB/sec pushed to my house.

Perhaps apple is teaming up with ATT on this one as well and they can subsidize the appleTV (almost free) if the customer gets a UVERSE account? Seems like a double FU to Verizon.

(1) iPhone remains ATT only

(2) AppleTV/tablet remains ATT only

Nov 03, 09 - 11:43 am Comment from: Msavwah

Apple ISP to rule them all!
Probably not likely but who knows
the isp's are the key to the whole thing in the end

Nov 03, 09 - 11:47 am Comment from: fred

Apple should buy ATT and compete directly with Comcast

Nov 03, 09 - 11:49 am Comment from: Jim

ATT stands for Apple, telephone & telegraph

Nov 03, 09 - 11:53 am Comment from: MacDust

Apple needs to open the SDK for TV and allow Apps. Good examples of the kind of apps that should run on it are already on the iPhone: MLB at Bat and NBA League Pass. Both of these apps allow you to see live games and real-time scoring, stats and camera angles. This is where the future of the TV should be focused on.

Nov 03, 09 - 11:53 am Comment from: breeze

The writing's on the wall

Nov 03, 09 - 11:55 am Comment from: TigerCliff

@84 Mac Guy, I would definitely like that direction -- choose your channels a la carte.

BTW, I filter all the shopping channels on DirecTV, and I swear my pesky DVR/receiver lets one or two of those creep back into my channel list.

Nov 03, 09 - 11:55 am Comment from: Botvinnik

@Tom: re "he puzzle is the need to maintain a cable or satellite account for live sports"

I subscribed to MLB-TV HD this past season, it worked FANTASTIC, every game live in high definition..so if Apple can pull off the same kind of format/stream through iTunes>tv..it can be done.

Nov 03, 09 - 11:55 am Comment from: Steve516

I'm ready to sign up... $30/month is what TV should cost (including the premium channels of course).

Nov 03, 09 - 11:58 am Comment from: DRMSSDB

The impediment here is not technological. As several have pointed out, it is the content providers. They want to stick to their dated method of trying manage access to shows in what seems to be an almost random way - check any on demand service, Hulu, or iTunes TV shows. Also, consider the Netflix streaming service - the studios were intractable, so Netflix had to do an end around and pay premium cable channels for access to the movies they were playing. The studios are, as someone pointed out, in pretty much the same place as the music labels - they want to use the old system (them in control of what you can see and when) that simply does not fit with how consumers are beginning to think about media.

I think this sounds like a great thing if Apple can get content providers to do something they have shown they are unwilling to do - let go and give consumers access to everything. That is the only way to get enough paying customers to support this model. Not going to happen any time soon, unfortunately.

Sports is more tricky, but I assume at some point the leagues are all going to be their own networks and provide games solely through those network and the internet (for the NFL, the latter is is already happening outside of North America via NFL.com and in Manhattan via a Direct TV-related internet-only package). That will also take time since their current system - broadcast networks guarantee them billions over a given period of time - still seems to be working pretty well for them.

Nov 03, 09 - 12:20 pm Comment from: Macintosher

Right on cue... Eddy Cue. Leading the next digital revolution.

Nov 03, 09 - 12:21 pm Comment from: the_steenmachine

Most people I know (including myself) get bundled services from a single provider, whether it's Verizon, ATT, Comcast, etc.

I happen to have Comcast. And while I have some nit-picky issues, the $99 / month package of high-speed internet / phone / cable is really hard to beat (even with a little xtra $ for HD). And our viewing habits span children's shows, sports, cooking, home improvement, on-demand, etc.

So Apple better have a good value proposition, or they are going to be fighting an uphill battle if it's $30 for JUST their TV shows, IMO.


MDN MW: could, as in it *could* be an interesting product.

Nov 03, 09 - 12:44 pm Comment from: G4Dualie

How long before Apple gets into the satellite business?

It could happen, if XM, DirecTV, and Dish can do it, so could Apple. It would certainly be cheaper than buying an antiquated pipe.

Nov 03, 09 - 01:00 pm Comment from: leodavinci

"The impediment here is not technological. As several have pointed out, it is the content providers. ..."

Actually, it's both.

There are technological limitations. The internet is a hodge-podge of hardware and software technologies. It's amazing it works at all.

And it's not just the content providers.

ISPs want a piece of the pie... simply because content travels over their pipes. As a consumer, I'm not happy about that business model. It means I'll pay more and I want my prices low.

IMO, due to the changes in our society due to the digital revolution, maybe we'd be better off if ISPs became non-profit, public utilites.

Nov 03, 09 - 01:28 pm Comment from: acid

Problem with current pay TV is that channels still program the broadcasting times of the shows. The consumers have to *work* on what to record and when to watch or let old recordings lapse. If you treat TV shows like movies and music - have what you want when you want - it will be a profitable business, as iTunes and Netflix have proved. So that's what Apple is after - the Genius bar will automatically arrange the TV programming according to your couch potato schedule and interests. Smart advertisers will also realize they then have a captured audience and new medium unlikely to be disrupted by the current fast-forward remote control habit.

Nov 03, 09 - 01:31 pm Comment from: Jeff

This would be great (If International), only problem I have is I currently subscribe to House MD and it Takes 6-8 hours each Tuesday to down load the HD\SD Version, this is most likely due to my Internet \ cable provider Rogers throttling the traffic.

I will be moving soon and I will no longer have the budget for cable currently over $100.00 per month so I intend to put up an antenna and get the fastest internet Rogers has in my area 10MB. I only watch a few shows and my kids will be staying with their mother so she will have to deal with their TV habits most of the time.

The subscription model works for me if I can choose the shows I want and I can download them once and watch whenever I have the time. Only hope that we can get some sort of net neutrality legislation in Canada.

Nov 03, 09 - 01:40 pm Comment from: Raymond in DC

This might work for some, but definitely not for me. I have only basic DSL and thus rely on over-the-air for local HD broadcasts and Netflix for my video offerings. And there's a big difference from browsing the offerings via iTunes and channel surfing - something perhaps built into guy DNA. Yes, if there's an episode of a favorite TV show I missed I might download it. But not otherwise.

Nov 03, 09 - 01:42 pm Comment from: anthony007

Why doesn't apple just get it over already and build a convergent TV/Internet/Itunes/DRV device in the 50 inch range already? That's something I'd buy

Nov 03, 09 - 03:55 pm Comment from: Leif Wright

Please, please, please let it be true!
I would gladly cancel cable (except for internet) if i could get a $30/month subscription to all the shows iTunes carries on my AppleTV.

Nov 03, 09 - 04:11 pm Comment from: Mike

Subscription ? Count me out. On-demand services are so much more cost effective for the consumer.

What's next? A subscription fee for tapwater, whether you use it or not ?!?!?

Nov 03, 09 - 04:16 pm Comment from: Not anthony007 (James Bond He Ain't)

@ anthony007

"Why doesn't apple just get it over already and build a convergent TV/Internet/Itunes/DRV device in the 50 inch range already? That's something I'd buy"

Apple just get it over already. A device in the 50 inch range already.

Every time I see one of your posts I wonder if your a troll, stupid or just live in a different galaxy.

Nov 03, 09 - 06:15 pm Comment from: cw

Toshiba plans to sell a tv in 2010 that has 4k * 2k resolution.
It will also up-scale 1920 * 1080 to 4k * 2k.
Now I ask again, can anyone pump out a 4k * 2k DOWNLOAD?
Hint----quad chip divides movie into 4 parts, and the quad core processes all four at a time? Hey I don't know, but...
Who is gonna say 1920 *1080 is all that will EVER happen?
You mean in 2050, or 3000 people will only have 1920 * 1080?
Why does Apple's new mac have as high a resolution as it does?
No reason at all?

Nov 04, 09 - 12:24 am Comment from: Ting

Here’s what I’d like: Anytime, anywhere, access to the entire current and back catelogues of content from high quality film and TV production companies and news channels across the globe available 24/7/365 through iTunes, TV and in the longer term, iPhone & iTablet. In short, I’d like to create my own TV programme to watch at my leisure on demand.

The barrier is the current paradigm and entrenched positions. Everything else is just technology, infrastructure investment and deal-doing.

Take for example the BBC in the UK and its iPlayer. This is only available to users in the UK and only carries BBC content. It is unlikely that other broadcasters would agree to channeling their content through the BBC to its user base. But as the record labels have shown, they will most likely be happy to go through an independant third party conduit like iTunes and TV

Based on the record to date, Apple seems to be the only company on Earth capable of dreaming so big and making it happen. It changed paradigms for the music industry through iTunes; mobile telephony through the iPhone; and may just be the one company that saves trees by hitting photo-copiers and news stands when it introduces the iTablet...

Nov 04, 09 - 02:37 am Comment from: Broadband Provider

this is a very good ptional for a customer besause every one could be want this service. this is best for every ine

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