Sports fans received great news Wednesday when Apple (s AAPL) updated its Apple TV set-top box with new apps that will let them stream live and on-demand games from MLB.tv and the NBA. While the availability of sports will open up a whole new potential audience for the device, the more important addition is Apple TV’s ability to now stream live video, which could enable it to strike deals with content providers to stream linear TV channels.
Rumors of a live subscription service that could compete with traditional pay TV offerings have been swirling since even before the latest iteration of the Apple TV became available last fall. Apple was reportedly pitching TV programmers on launching a broadband-only video subscription service that would include live feeds from broadcast TV networks for a price of about $30 a month. At that price, Apple would be able to undercut most existing cable packages and offer a true cord-cutting alternative to the major cable and IPTV operators.
Those talks apparently went nowhere, with the big broadcasters and cable networks sticking to their traditional distribution partners instead. And when the new Apple TV launched, it only had access to on-demand video services, including Netflix, (s NFLX) YouTube (s GOOG) and Apple’s own iTunes movie and TV rental service. But all of that has changed now, as the latest Apple TV software update includes code that will allow content partners to stream live videos direct to the device.
There’s certainly an opportunity for content providers to tap into Apple TV’s live capabilities. For instance, independent cable network Wealth TV recently launched an app for Roku that will let its users subscribe to the networks without cable. And Al-Jazeera English, which lacks distribution through U.S. cable networks, has gotten a big boost from streaming live online and through Roku’s set-top box.
Granted, Apple TV isn’t an open ecosystem in the same way that the iPhone and iPad are — at least not yet. Not just any third-party developer can build apps for the device. At the same time, live video opens up interesting possibilities for Apple TV, whether it be through the creation of a bundle of TV channels or by enabling TV networks to partner with Apple and create their own live streaming services.