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Summary:

Big Cable has just been given a lot more to worry about in a landscape that is already rapidly changing under its feet. All Things D is saying that Apple has been shopping around a subscription-based model for video content to TV networks recently, and it […]

Big Cable has just been given a lot more to worry about in a landscape that is already rapidly changing under its feet. All Things D is saying that Apple has been shopping around a subscription-based model for video content to TV networks recently, and it looks to be a fairly attractive deal from a consumer standpoint. It probably doesn’t look too shabby to networks, either, since it will help them stay relevant as more users turn away from their cable and satellite boxes and towards their computers.

According to “multiple sources” speaking to All Things Digital’s Peter Kafka, Apple is trying to gather support for a monthly subscription service that would see TV programs made available via iTunes in an on-demand basis. Luckily for most, Apple is keeping the proposed service open to all platforms, instead of trying to use it to bolster lackluster Apple TV sales figures, as one might reasonable expect.

Interestingly enough, Gene Munster actually predicted Apple might do something like this, though he predicted 2011 as the launch year. Apple’s proposed launch timeframe for the new service is early 2010, but that’ll be a tall order given the current state of buy-in from content providers. Networks are happy to provide shows for purchase on the iTunes service, but a move to a subscription model would represent a complete change in the relationship between Apple and the programmers.

Giving that much power over distribution to Cupertino could result in a relationship similar to the one that exists between Apple and record labels, in which the computer maker holds an uneven balance of power because of its ability to reach the consumer. Networks are probably also not very eager to damage the existing arrangements between themselves and cable/satellite providers, which still represents significant revenue from subscription fees, despite the recent consumer turn towards web-based content.

Apple’s proposal comes close on the heals of Hulu’s announced plans to begin charging for some of its service, and I don’t think the timing is coincidental. The time is coming when digital distribution becomes the default method for content provision, and Apple clearly means to spearhead the movement.

Success now will depend on offering a good enough revenue sharing deal to the networks to make it worth their while to sign on. It’s a question of finding the right tipping point to convince programmers that the potential gain outweighs the considerable risks. The key will be convincing multiple big name networks to join in, since this will only succeed if we as consumers think Apple is providing enough variety to justify ditching our cable subscription.

  1. My prediction / wish could come true….

    Panny on September 29th, 2009 at 1:32 pm
    http://theappleblog.com/2009/09/29/future-fodder-apple-tv-the-center-of-your-media-universe/
    A very good post, those features would go a long way and increase the value of Apple TV.
    One area that I think would transform Apple TV, is the TV show section. At one point I was very close to ditching cable and just using Apple TV – why? I could download most of my favorite shows and movies. What stopped me was the ‘live’ effect of TV – news, sports, shows that you want to watch live. If Apple could provide this content, then it could compete with cable and satellite while adding all the other features that cable & satellite couldn’t compete with.
    They could also offer ‘packs’ of programs at discounted rates and maybe even add advertisements for cheaper alternatives. I was working out that I may watch 6 shows a week – that’s about $50 a month with the advantage of ad free. My cable is more than that but I still want the ‘experience’ of live TV incase news breaks, a sporting event comes on or a live talk show, etc. If Apple can duplicate this ‘experience’ of TV… they’ll be onto something HUGE!

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  2. I’ve got to agree with Panny here. I’d love to ditch cable/satellite for an a la carte TV experience, but until you can get sports in HD this way, it’s just not going to happen for me. I just about never DVR sporting events because once they happen, it’s over and you have to move on to the next game. The cable/satellite provider who starts waking up and allowing customers to pick only the channels they want will make a killing.

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  3. [...] http://theappleblog.com/2009/11/02/apple-pitching-itunes-tv-for-30-a-month/One area that I think would transform Apple TV, is the TV show section. At one point I was very close to ditching cable and just using Apple TV – why? I could download most of my favorite shows and movies. What stopped me was the ‘live’ … [...]

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  4. I ditched cable TV. Bought a $50 outdoor antenna. Now I get true 1080i HDTV for free – great for NHL and NFL games. My friends were amazed at how great over the air (OTA) television reception is nowadays. They are ditching cable TV as well. You can get OTA PVR boxes too, or build your own.

    Whatever I don’t get off the air, I can get from Apple TV & the Internet.

    Before seeing the ‘light’ I was forking out $100 a month for cable TV.

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    1. I agree with this. I have an EyeTV tuner for my iMac, and considering the limitations of hooking up my digital cable box through it, I decided to try and make due with the new digital OTA since the switchover. I have to say, it’s not perfect, but I’m quite happy with it. Anything that I can’t get over the tuner, I can get in some form on the net.

      To me, the one-two punch that would have Apple completely dominating television as they currently do music would be if they came out with this $30 a month on-demand service, and also released a new AppleTV device capable of using it in addition to including a built-in digital tuner and DVR capabilities.

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  5. This thirty dollars a month business better include the ability to watch a few movies and some live sports broadcasts too. Thirty bucks for watching television shows is incredibly steep. Ten a month and wellstart talking but thirty is ridiculous.

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  6. So, if I ditch cable, how do I get the high speed internet connection I need to download or stream HD TV (I live more than 5 miles from my local switching station, so DSL is out; fiber isn’t even offered; and satellite is ridiculously expensive)? Oh, and I live in the mountains, I’d have to get a permit for a 50 foot antenna tower to get OTA TV (traditional TV antennas only got a very fuzzy channel 2 in my area before cable came to town in the late 80’s – people either had one of those huge satellite dishes or used VCRs for TV entertainment).

    Just curious. (In case you’re curious, iTunes does in fact offer all but two of the shows I watch regularly.)

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    1. i know with dsl you can get whats called a dry line so you don’t actually need a live telephone account to use it. maybe something similar exists for cable.

      and for the record. you don’t need to use parenthesis after every single sentence.

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  7. [...] at TheAppleBlog makes the point that such a plan could not only be attractive to consumers but to networks: It probably doesn’t [...]

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  8. If the goal was to pick off the dollars that customers currently allocated towards pay-channels; namely, HBO, Showtime, Starz, etc. it might work if for no other reason than when Tablet comes out you could have a TV anywhere offering to view same content on iPhone, Tablet, Desktop and Apple TV for one price.

    I do agree with others, though, that it sets up somewhat of an ALL-or-NONE as to whether same price includes Movies/TV and Music.

    Some fodder on this one in my post:

    Apple, TV and the Smart, Connected Living Room
    http://bit.ly/k4rOf

    Check it out, if interested.

    Mark

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  9. [...] predict what the future holds for such a personality, but recent evidence suggests that Jobs will next try to do for TV what he’s already done for music and cell phones. That is, to quickly and without much [...]

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  10. [...] Apple TV product that would see TV programs made available via iTunes in an on-demand basis (via The Apple Blog) And finally… a clever way to reuse an old iMac G4 as a lamp (seen at right, via [...]

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