Apple in Negotiations With Content Providers for Internet-Based Subscription Television Service

[JAT]

The al-a-carte dream kills all that.

I presume you mean a dream that includes no commercials on these channels that currently have commercials? I'm not sure all of us believe in such a thing. I use Tivo to avoid them, myself.

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http://www.jsonline.com/blogs/sports/141097593.html

ESPN = 5.06
ESPN2 = 0.67
ESPNU, ESPN News, ESPN Classic < 0.37 per.

Probably less than $6.50 for the package.

It's always confusing. We get partial facts. For instance, I remember huge disputes about the Big Ten Network demanding near-ESPN pricing. Now, that chart you linked shows them far away from that level.

 

[giantfan1224]

My point wasn't entirely based upon replaceability....it's replaceability + price. You can replace a phone every 2 years for $200. iPads can be replaced every 2-3 years for $500 average. A television, presumably 55" with either 1080p or 4K resolution with online features is going to cost roughly $2K (which includes the typical Apple tax). That is why I think Apple would have a much tougher time competing in the flat panel/TV arena than in phones, tablets, computers.....and it is why I'd much rather see a new STB from them instead of an all-in-one. I have no plans to replace my 55" Samsung LED anytime soon.

My point is that the technology is actively evolving and there's plenty of cash being spent in that market. It will probably never be as profitable for them as the iPhone or iPad but there is certainly a lot of money to be made, if they can pull it off.

 

[olowott]

yawning

Some products just get free publicity and haven't seen what daylight looks like

 

[paul4339]

... Somebody has to be the loser in all of that. It won't be Apple, the Studios, the pipe toll masters (cable company & broadband providers). Who's left?

my guess is that it's the cable company and traditional provider that are to some degree double dipping, selling broadband and re-packaging & distributing media to be broadcast to our homes over the same wire (not that there's anything wrong with that from a business perspective).

IMO, they need new entrants in the broadband market to compete against the existing providers. The wireless providers are probably going to be it. These providers can sell internet or build private networks for companies (apple, amazon, even netflix).

.

 

[AppleScruff1]

I wonder what Comcast, Verizon and the other internet/tv providers will do when everyone drops their tv services and switches to Apple's content, which will still be delivered over their networks?

 

[paul4339]

I wonder what Comcast, Verizon and the other internet/tv providers will do when everyone drops their tv services and switches to Apple's content, which will still be delivered over their networks?

Nevermind Apple, isn't that kind of the trend now with Netflix traffic?

 

[dragje]

The content providers must adhere to the "guy remote" style of browsing - simple to do, REAL content for sample, easy to stay put and subscribe. If they don't, they and Apple are bound to fail miserably.

Again - IMHO.

Your IMHO is right IMHO. The only problem with many TV cable providers is that it's filled with garbage, read commercials. Each 5 minutes in some program's. I wonder how Apple model would cope with that aspect. For instance, I watch a popular Dutch TV program called Zomergasten. It's a program where the host is interviewing one guest for almost three hours in a row without -any- commercial break. During the interview the guest, mostly a scientist, writer, actor or politician describes his or her memory of his or her childhood using movie or tv scenes to back it up. It's really interesting to watch. But I don't think this is possible on the American cable. However, using a app it will have it's own rules. That is, it 'can' have it's own rules.

The program none stop way of interviewing the guest is part of the format itself. Add commercial breaks to it and the format will loose it's function.

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I wonder what Comcast, Verizon and the other internet/tv providers will do when everyone drops their tv services and switches to Apple's content, which will still be delivered over their networks?

That will not happen, at least not here in the Netherlands. Godthanks I may add.. What Apple can offer 'might' be interesting, but I wonder if all concepts of TV broadcasting would fit within their model....

 

[Chupa Chupa]

I wonder what Comcast, Verizon and the other internet/tv providers will do when everyone drops their tv services and switches to Apple's content, which will still be delivered over their networks?

Right now I have Verizon 25/25 FiOS Internet only (phone is included but don't use & pkg w/o phone is actuall more expensive). If I wanted to add TV it would only be $30 more.

 

[JAT]

As for another quote from the article:

Quartz claims that Apple does want to release a much-rumored television set -- not just a set-top box like the current Apple TV 'hobby' -- to "usurp the role of the cable box" and "control the entire experience of watching TV".

I'm not sure how an actual tv helps usurp the role of the cable box any more than a stand alone box. A tv monitor and AppleTV can already exist without the cable box.

I have nothing against Apple offering a tv, but I'd hope they'd still offer the same functionality in an AppleTV like box. I'd rather keep them separate.

Apple's world has it all in one box. That's the assumption. Which would simplify setup and wiring.

People like you and me don't care about that, but that's what they mean.

 

[MacManTexas56]

If cable companies start losing revenue, they will just increase the price of internet service to everyone. And/or worse, have tiered plans. COUNT ON IT!

TWC used to not track your data usage. now when you go online there is a tool to see how much you use each month. I'm sure tiered data will start when tv starts streaming over the net.

 

[JAT]

Right now I have Verizon 25/25 FiOS Internet only (phone is included but don't use & pkg w/o phone is actuall more expensive). If I wanted to add TV it would only be $30 more.

See, here's the problem or trick of it. What TV would only be $30 more? That might not include the 2 channels I actually want. Getting them might be another $15 for another add-on package.

These conversations get too simplified sometimes, the real facts change for everybody.

 

[AppleScruff1]

Nevermind Apple, isn't that kind of the trend now with Netflix traffic?

Quite true, but when the ISP's start losing a substantial portion of their TV revenue with another major player in the picture, what do you think will happen to your rates?

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Right now I have Verizon 25/25 FiOS Internet only (phone is included but don't use & pkg w/o phone is actuall more expensive). If I wanted to add TV it would only be $30 more.

I don't see Verizon losing tv revenue to a competitor for very long before they raise their rates. If enough people drop FIOS tv but keep the internet, rates will go up, IMO.

 

[m11rphy]

I'm not sure how an actual tv helps usurp the role of the cable box any more than a stand alone box. A tv monitor and AppleTV can already exist without the cable box.

I have nothing against Apple offering a tv, but I'd hope they'd still offer the same functionality in an AppleTV like box. I'd rather keep them separate.

Why would apple want to give you the same functionality as a $2000 tv in a $99 box ?

 

[paul4339]

Quite true, but when the ISP's start losing a substantial portion of their TV revenue with another major player in the picture, what do you think will happen to your rates?

I think they will do the typical trick of trying to increase the internet rates somehow... that's why more broadband providers entrants are needed (like wireless players) to apply downward pressure on the internet prices as well.

 

[LethalWolfe]

I guess channels are more like private equity fund's then; they foot the bill to create content, and then make money from it's sale. There's nothing wrong with that; but in theory any investor can foot the bill, even if that investor happens to also have a different non-traditional distribution mechanism. Look at the shows Netflix has footed the bill for; Amazon is also getting into that business.

Netflix, Amazon, Hulu, etc., still operate in a similar base fashion though in that you pay for everything, not just the show(s) you want.

There is more than one channel that has food shows, not just the food network. Sometimes I just want to watch food shows; whether it's on the Food Network, it's a clone show on National Geographic, or a re-run on FX doesn't matter as much. If I'm in the mood for a food show, all I care is that the system plays for me a food show that I have not yet seen.

That's why I think the computer-curated system like Pandora's is the key.

I think this can be accomplished today just by utilizing a universal search (or playlist) feature. You tell the device you want to watch The Avengers and it will search through all available services (over the air channels, cable channels you subscribe too, Amazon, Hulu, Netflix, etc.,) and find The Avengers for you. Or you say you want to watch a cooking show and the device will search all available services for just cooking shows.

I wonder what Comcast, Verizon and the other internet/tv providers will do when everyone drops their tv services and switches to Apple's content, which will still be delivered over their networks?

Comcast, Verizon, AT&T, etc., will just transition to VOIP. For example, all three I just mentioned have tested the waters w/MS by allowing the Xbox to act as the conduit for their content. TW is the cable company in my area and I see more TW commercials advertising it's broadband service than it's cableTV service.

 

[ckurt25]

Even if true, that's $6.50 forced upon all of the subscribers of the tier that gets ESPN for a total revenue from that provider of $X. Conceptually in al-a-carte world, some of those people wouldn't want ESPN or the ESPN bundle for $X - (that loss). ESPN would only be interested in a new model that would yield $X + (more money). So, they would price worst-case al-a-carte accordingly. In other words, it would not be $6.50 plus a little markup (plus Apple's markup) but probably something more like $30-$50 for the ESPN bundle al-a-carte. That's a guess on my part but that could be a guess that would go either way, meaning I could be too conservative in that guess as easily as it being too high.

So they'd jump from $6.50 to upwards of $50 for service? When basic cable service that carries ESPN in my market, on 2 different providers, is less than that? I don't think so... My guess is it would be $15 per month. When ESPN is making money at $5.05 for the one channel they won't price it where people will never use it. Remember, we paid $.99 ($1.29 now) for a song, more than a fair value to consumers. $15 seems about right for ESPN and Apple.

I could see a complete sports package for around $25. The ESPN family, Fox Sports, CBS, NBC, Big Ten Network and others. Give me that and the cable will be cut as soon as I can pick up the phone.

The adjustment people may have to make (and/or the providers like ESPN) is dealing without DVRs. If I want to record a baseball game because I'm out in the afternoon will I be able to watch it on demand, even while it's still in progress? Maybe they charge extra for that.

 

[MacManTexas56]

See, here's the problem or trick of it. What TV would only be $30 more? That might not include the 2 channels I actually want. Getting them might be another $15 for another add-on package.

These conversations get too simplified sometimes, the real facts change for everybody.

yes you are right, but go look at how "cable cutters" compare prices to make themselves feel better. They always act like cable tv is $100/month when that's not the case. They are going from one extreme to the next. If they are paying $100 for TV alone...they have a problem IMO. You can't compare having every channel known to man then go to zero channels and say all cable tv costs $100.

We have standard cable on TWC which is like 53 channels or so that we stream via our Roku with their app. We also have "extreme" internet at 30mbps...all for $99.98/month. Our TV portion which gets all the main network channels is less than $50/month.

 

[giantfan1224]

I don't see Verizon losing tv revenue to a competitor for very long before they raise their rates. If enough people drop FIOS tv but keep the internet, rates will go up, IMO.

That's only true if they're the sole internet provider. If they are in a given geographic area, and since the future is the internet and streaming content, then their monopoly won't last and they'll be forced to compete.

 

[Count Blah]

So, items that you personally have upgraded, not as offered by Apple, are lasting 5+ years. Good to know.

And that was has been dropped from three feet on it's power outlet corner onto tarmac and had it's shape bent back by needle nose pliers. Oh yeah, it was also just about submerged by water thanks to my 5 YO son dumping a ton of water on it. It had to dry for over a month before it started working again.

The unibody cMBP is a damn tough machine. My new one is also a cMBP, and I very happy with it as well.

 

[MacManTexas56]

Nice insult when you clearly don't understand people's motivation here. Cable cutters (I am one) don't mind paying, they just don't want to pay upwards of $80-$100 per month for a ton of channels they have no interest in watching. HBO + ESPN + Comedy Central + 5 other random channels are not worth that much. There's also the issue of not wanting to support oligopolies made up of dinosaur companies who have no clue how or desire to innovate, and actually oppose it until they are forced to act (DVRs). The cable companies have effectively halted the process of innovation in the television industry. It's well past time for a serious disruption.

why should they innovate if people like you are willing to pay $100/month for TV alone and have 5 hd boxes in your house?

It always amazes me the price that people pay when it comes to TV and cell phones etc. All common sense goes out the window.

 

[dragje]

Netflix, Amazon, Hulu, etc., still operate in a similar base fashion though in that you pay for everything, not just the show(s) you want.

That's exactly what I would like about this concept if Apple would be able to pull this off in the way you're suggesting. Verizon for example is broadcasting 95% crap, i.m.h.o. and even HBO which has nice series to broadcast doesn't have the content for everyone. For example, why paying 15 euro's each month if you only would like to see Game of Thrones and nothing else while the live show can be downloaded in HD quality just one hour later? Wait another few hours and you'll have subtitles along with it all for free....

A model that enables you, the customer, to only pay for each episode of a eerie of any channel you're interested in would be much more appealing.

 

[MacManTexas56]

That's exactly what I would like about this concept if Apple would be able to pull this off in the way you're suggesting. Netfix is broadcasting 95% crap, i.m.h.o. and even HBO which has nice series to broadcast doesn't have the content for everyone. For example, why paying 15 euro's each month if you only would like to see Game of Thrones and nothing else while the live show can be downloaded in HD quality just one hour later? Wait another few hours and you'll have subtitles along with it all for free....

A model that enables you, the customer, to only pay for each episode of a eerie of any channel you're interested in would be much more appealing.

it sounds appealing until they tell u the pricing structure. I think people are hoping that channels are gonna be like $2/month...do you really think they are going to sell themselves so cheap? What will end up happening is the consumer will end up paying more or about the same as a giant bundle.

 

[giantfan1224]

it sounds appealing until they tell u the pricing structure. I think people are hoping that channels are gonna be like $2/month...do you really think they are going to sell themselves so cheap? What will end up happening is the consumer will end up paying more or about the same as a giant bundle.

I, unfortunately, agree with you. It's why I think Apple is having such a hard time negotiating for content. An Apple TV with a la cart content doesn't make sense if it doesn't provide value to the consumer above and beyond what the cable companies provide. Content providers are hesitant to deal if they don't see it as a an increase revenue stream.

 

[Sky Blue]

A model that enables you, the customer, to only pay for each episode of a eerie of any channel you're interested in would be much more appealing.

Yeah, would be cool if Apple had a website or a portal that you could buy individual episodes or seasons from.

 

[MacManTexas56]

I, unfortunately, agree with you.

yeah man i wish things would change also....but companies are greedy here and always have been. Why would they make things cheap for the consumer NOW after all these years??

I mean people wishing for $20/month for ESPN?? seriously? package of 10 channels will be more than regular standard cable!