For months now, Apple has been rumored to have its eyes on a new type of iTunes TV subscription offering — and we may be on the verge of seeing this potentially disruptive idea come to fruition. Multiple sources have confirmed that Apple has been pitching TV networks to support a monthly subscription service that would deliver television programs via iTunes for fees far lower than $85-plus monthly cable bills, according to Peter Kafka at All Things D. NewTeeVee and TheAppleBlog have some interesting input on the possibility today, and have weighed in on the idea before. Here’s why this could be an important new business for Apple, and a possible threat to the cable giants.
As Liz at NewTeeVee writes:
A TV subscription product actually sounds promising given that iTunes already has an established business of selling digital content delivered over the Internet — TV episodes, even! — so it’s out in front of “TV Everywhere” Hulu-like sites for paying subscribers of cable companies and other TV operators, as well as Hulu itself.
Hulu’s board members have been making rumblings about charging for content, and few people doubt that the company can make a paid model work. In fact, some industry experts see Hulu as pointing to “the end of free TV” (GigaOM Pro, subscription required). Piper Jaffray analyst Gene Munster has already recommended that Apple jump on this trend by introducing a $30-$40 subscription sub-library of its TV shows that could look mighty attractive relative to expensive cable bills.
Darrell at TheAppleBlog makes the point that such a plan could not only be attractive to consumers but to networks:
It probably doesn’t look too shabby to networks, since it will help them stay relevant as more users turn away from their cable and satellite boxes and towards their computers.
Disney may be the first content provider to explore the idea with Apple, as Kafka surmises, given Disney’s long-standing interest in working with iTunes and Steve Jobs. If Apple does indeed keep the price low on a subscription TV service, there is little doubt that many people will be willing to pay. The company could also explore with networks incentives to subscribe, such as allowing early access to widely watched shows.