Apple Singing New iTunes About Online TV Subscriptions?

Mad Men iTunes

The latest in subscription TV chatter: Apple (NSDQ: AAPL) is pitching network execs an iTunes-based monthly plan for $30, according to AllThingsD. As part of its increasingly deep TV “store,” iTunes already sells some subscriptions via season passes for specific shows — Mad Men is $2.99 an episode or $34.99 for Season 3 with shows delivered as they air. Often pilots, season premieres or select shows are free.

This could take the form of a collection of that programming: pay $30 a month and get a certain number of episodes from certain shows across various networks. Apple CEO Steve Jobs said in September that Apple already has more than 100 million iTunes accounts connected to credit cards. Three pieces of context to that:

— Those accounts span 23 countries so not all would be eligible.
— U.S. cable operators have 41.5 million digital subs and 40.5 million high-speed customers, according to SNL Kagan.
— Yes, Apple may have more relationships with customers in the U.S. (not sure of the split) than cable operators do than but that includes a substantial amount of one-offs, small purchases and iPhone apps — not a promise to pay $360 a year. Sure, some people using iTunes as a TV substitute probably pay that much or more once it all adds up but they would be the exception.

Another number for some context: NCTA estimates cable operators paid $3 billion in franchise fees last year. No one on the programming side wants to muck with that so the networks will have to be very careful about appearing to provide a subscription. The TV Everywhere concept being promoted by Time Warner (NYSE: TWX) is about adding multiplatform access to existing video customers and that’s a hard sell without — and even with — authentication at the heart. TW CEO Jeff Bewkes and others have said customers shouldn’t have to pay twice for the same content but that doesn’t mean programmers don’t want to be paid more.

As for broadcast, their hit shows are already out there for the most part. As long as iTunes isn’t trying to sell live streams of on-air programming, it’s not a stretch to see them taking part in some kind of package. Would Apple’s customers want to trade a la carte in for a package? That’s a different question.

One more thought: Apple could make iTunes a TV Everywhere portal with authentication, similar to the way Comcast’s Fancast is doing it in trials or Hulu might. A combination of that plus subscription downloads under the current time constraints or a longer delay could be interesting.

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