Apple in Talks With Content Providers for Web-Based TV Service

[whooleytoo]

Probably less relevant to anyone outside the US. Typically the reason I still have a cable TV subscription is for national news and live sports, and given Apple services are so US-centric they're unlikely to offer anything like that over here any year soon.

 

[Sol]

I hope Apple is not waiting for the content providers to let them stream their shows before they bring the next Apple TV to the market. Unfortunately that device's development has come to a stop, like the entire iPod line.

 

[malexandria]

Good, but Can't Cut The Chord

Sounds good for people who don't have to get their broadband through their cable company. I looked into cutting the chord last year and Xfinity would actually charge me $75 a month for Internet only service, versus the $120 a month I pay now. Not worth the hassle of cutting the chord - especially considering how much TV I watch. It'd be nice if there was competition where I am, but I can't even get DSL Service in my apartment complex. It sucks.

 

[porky]

In my experience, Amazon Instant Video is hands down better than Netflix. Don't know why others are so stuck on Netflix these days; maybe they never got to try Amazon.

Not everywhere in Europe is Amazon Instant Video available.... (Maybe even nowhere) Netflix in most European countries.

 

[69650]

I cut the cord 2 years ago. Now granted - I live in direct line-of-site with the Empire State Building and therefor get amazing signal quality through my antenna, but me (personally) has no reason to add to my set up.

Right now, I have the antenna which feeds into my 2 tuner Tablo. So I have a dual channel DVR which I can stream to my Apple TV, Roku, and other various devices. Having the Apple TV allows me to burn through the credit I still have for iTunes and rent movies when needed. Roku - well that does pretty much everything like that and more.

I'm not "missing" anything. Oh sure there's HBO and other pay channels. But we don't really watch that / have that much time to watch.

Now before you jump down my throat in a reply - I realize this is MY use case. But I know a lot of cord cutters who are pretty happy with their own set ups.

Apple would really need to step up the game (not saying they can't) to get current cord cutter's business. Those that haven't cut the cord, well - Apple might be able to sway them. But it comes down to pricing.

I also cut the cord a while ago. I'm very happy with the free-to-air channels we get in the UK. I only watch a couple of hours of tv max in the evenings anyway so why do I need hundreds of channels all with crap on. Most people I know only stay with cable for the sports channels.

I would actually be more interested if Apple continued to build on their range of specialist tv channels. I like to watch the business channels for example.

 

[bigchrisfgb]

Here in the UK the Premier League (the top league in Soccer) rights are due to be released for bidding in the next few months, it's expected to reach a record £5bn ($7.5bn) just for the UK rights. Both Apple and Google are expected to be bidding. This could be a way for Apple to enter the market. It's said that Sky (our biggest subscription TV provider) only make money because of it's sports and in particular football (Soccer) and that the other channels are not profitable.

 

[mattopotamus]

Sounds good for people who don't have to get their broadband through their cable company. I looked into cutting the chord last year and Xfinity would actually charge me $75 a month for Internet only service, versus the $120 a month I pay now. Not worth the hassle of cutting the chord - especially considering how much TV I watch. It'd be nice if there was competition where I am, but I can't even get DSL Service in my apartment complex. It sucks.

This seems to be something everyone forgets about. You may pay $120 for internet and TV now, but if you want to keep the same internet speeds the company will charge you ~$80 for internet only. Then you are going to subscribe to netflix, HBO, Showtime, etc. and be right back to your $120 if not more.

----------

In my experience, Amazon Instant Video is hands down better than Netflix. Don't know why others are so stuck on Netflix these days; maybe they never got to try Amazon.

the series. Netflix has much better series: Arrested Development, HOC, Orange, Wet Hot American summer, Daredevil coming soon

 

[samcraig]

This seems to be something everyone forgets about. You may pay $120 for internet and TV now, but if you want to keep the same internet speeds the company will charge you ~$80 for internet only. Then you are going to subscribe to netflix, HBO, Showtime, etc. and be right back to your $120 if not more.

-

My bill before cutting the cord was around $150. Now - internet only, it's $48.

I subscribe to netflix. I don't have tons of other services. I get a great OTA signal. We like to watch movies, but we don't have time to binge watch or see a ton, so iTunes/MGo for the one offs are fine.

While my initial setup was a few hundred, we're saving over 1K a year. We didn't "need" to save it. But it was money literally going down the drain because the programs we watched were almost entirely OTA.

 

[newdeal]

Apple will get into the TV market within the next 5 years as sites like popcorn time become more popular and the TV industry has to play catch up to combat piracy just like the music industry did. The only reason they have been safe so far is bandwidth and convenience but I can see popcorn time becoming the next Napster unless they take steps to combat it before it gets too big

 

[bbplayer5]

Sports - The only reason I have cable.

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Apple will get into the TV market within the next 5 years as sites like popcorn time become more popular and the TV industry has to play catch up to combat piracy just like the music industry did. The only reason they have been safe so far is bandwidth and convenience but I can see popcorn time becoming the next Napster unless they take steps to combat it before it gets too big

You can't really combat something like that. Even the Pirate Bay just came back online.

 

[Lord Hamsa]

The current model allows the content creators a lot of money. They aren't going to give up that model unless a new model makes them a similar amount of money or their is a massive disruption to the current delivery model. (Like what happened with the music industry when illegal digital downloads suddenly rendered their model obsolete.)

It's not the content creators who make money because of the current system, it's the distributors. HBO costs $30/month on my cable system by itself - but as little as $15 if I get other premium channels - do you think HBO is discounting me because I get Showtime too? Of course not, it's the cable company giving me a discount to upsell me more channels - but they're still making a profit at $15/month.

Without the cable company (i.e., the distributor) in the mix, if HBO could sell the feed directly to subscribers, they'd probably make as much by charging $15/month, after accounting for the internal overhead they'd have to incur for distribution (or farming it out to Apple, Amazon, and the like).

Look at digital publishing for an existing example of how cutting out the middle-man works out for the content creators. In the generic print model, the publisher prints books and ships them to a distributor (at the publisher's cost), for which the distributor given them approximately 35% of the list price of the book. The distributor then distributes (naturally) the books to warehouses/shops, selling them to the retailers at 50-60% of cover price. The retailer then sells the book at or less than cover price to recoup their investment and make some profit. (I'm simplifying, mostly with regards to unsold copies, but the main point stands.)

In the digital model, the recommended selling price is 50% of the print list price. The publisher typically gets 70% of the digital sales price with the storefront (distributor/retailer combined) claiming the rest as their cut (BTW, sounds an awful lot like Apple's 30% cut on iTunes and App stores, doesn't it?). 70% of 50% is the exact same cut as 35% of 100% to the publisher, and there's no worry about printing and shipping costs. The content creator is still getting what they got before, and with less capital investment.

So where are the savings coming from? The physical distribution chain is no longer necessary. The distributor/retailer might take a lower percentage per book sold, but they also have much less risk of unsold copies. So they're making their money too, again with less capital investment and risk.

Now, TV is a different beast, simply because there is no physical inventory like a printed book - it's all electronic distribution in the first place, after all - but the concepts still stand, even if the actual numbers change.

 

[sammaffei]

I don't understand why content creators would prefer to go through the cable providers to distribute their content...

Well, in the case of Comcast, the cable providers now OWN the content. Anything on NBC or Universal films is now owned by the big C. That purchase should have never been allowed.

 

[Elbon]

...A lot of people don't see the value anymore, and you lost all sales that way. I know I don't se the value anymore, I haven't had cable for a year now. Don't miss it one bit.

I haven't had cable for over five years now, and I haven't missed it. Netflix + TiVo (for OTA shows) gives me plenty of stuff to watch.

 

[2010mini]

In my experience, Amazon Instant Video is hands down better than Netflix. Don't know why others are so stuck on Netflix these days; maybe they never got to try Amazon.

I have both. The thing I do not like about Amazon is it is not a true all you can consume service. There are shows I want to watch that I have to pay separately for.

 

[teslo]

are they still using those web 2.0 icons?? good gawd, i wouldn't expect those from clueless pharmaceutical companies in 2015, let alone apple.

 

[Yvan256]

Web-based?

I agree with other posters, why are they calling this "Web-based"? Unless they're talking about going through a browser, it's "Internet-based". It's the same **** as the Office de la langue française, calling websites "Sites Internet". Godamnit.

 

[samcraig]

It's not the content creators who make money because of the current system, it's the distributors. HBO costs $30/month on my cable system by itself - but as little as $15 if I get other premium channels - do you think HBO is discounting me because I get Showtime too? Of course not, it's the cable company giving me a discount to upsell me more channels - but they're still making a profit at $15/month.

Without the cable company (i.e., the distributor) in the mix, if HBO could sell the feed directly to subscribers, they'd probably make as much by charging $15/month, after accounting for the internal overhead they'd have to incur for distribution (or farming it out to Apple, Amazon, and the like).

Look at digital publishing for an existing example of how cutting out the middle-man works out for the content creators. In the generic print model, the publisher prints books and ships them to a distributor (at the publisher's cost), for which the distributor given them approximately 35% of the list price of the book. The distributor then distributes (naturally) the books to warehouses/shops, selling them to the retailers at 50-60% of cover price. The retailer then sells the book at or less than cover price to recoup their investment and make some profit. (I'm simplifying, mostly with regards to unsold copies, but the main point stands.)

In the digital model, the recommended selling price is 50% of the print list price. The publisher typically gets 70% of the digital sales price with the storefront (distributor/retailer combined) claiming the rest as their cut (BTW, sounds an awful lot like Apple's 30% cut on iTunes and App stores, doesn't it?). 70% of 50% is the exact same cut as 35% of 100% to the publisher, and there's no worry about printing and shipping costs. The content creator is still getting what they got before, and with less capital investment.

So where are the savings coming from? The physical distribution chain is no longer necessary. The distributor/retailer might take a lower percentage per book sold, but they also have much less risk of unsold copies. So they're making their money too, again with less capital investment and risk.

Now, TV is a different beast, simply because there is no physical inventory like a printed book - it's all electronic distribution in the first place, after all - but the concepts still stand, even if the actual numbers change.

The slight flaw in this logic is that the middle man is also the pipe. Even if people jumped off cable for their tv and only used HBO to go, netflix, etc - they need internet.

I would imagine that if enough people "cut the cord" and solely relied on internet, then internet prices would greatly increase because these companies would want to keep their profits. This being said - I have no true insight into costs involved in delivering cable channels to a subscriber vs "just" collecting money and being a dumb pipe for internet. But I would guess that the content delivery side is pretty profitable...

 

[Lord Hamsa]

The slight flaw in this logic is that the middle man is also the pipe. Even if people jumped off cable for their tv and only used HBO to go, netflix, etc - they need internet.

Not so much a flaw as a point I didn't go into in detail. But yes, higher bandwidth usage will likely drive prices up in that regard. At the same time, if, say Comcast, becomes essentially an ISP utility rather than a cable television provider, they'll be able to make more profit proportional to cost by not having to deal with all of the physical and support costs of supplying television services. On the other hand, as essentially a utility, they'd be hostage (perhaps even more so than now) to government regulation on practices and prices.

I doubt very much that they'd lose out in the long run, but it's a very significant change to their business model, and all change carries risk, which is something large companies tend to be averse to.

The other thing really holding up this model is existing contracts and distribution agreements. It's going to take a few years for these to shake out, even if all the other pieces fall into place.

 

[Coleman2010]

No mention at all of 4K streaming.

 

[bbyrdhouse]

Would love to see this happen

AppleTv recently added the Tennis channel, now of they would add The Golf channel I would cancel DirectTv tomorrow.

I much prefer Netflix, ATV, and HD Antenna (for local channels) than the $ spent on DirecTv programming ....

200+ channels and we only watch ... maybe a dozen

 

[subjonas]

It would depend on how much it costs.

If 5 selected channels cost $50 a month... but you can get 70 channels on cable for $50 a month... it would make more sense to just get cable.

Cable, coupled with a DVR, can get you EVERY show that is broadcast on TV.

Online services still don't have everything yet so you might be missing some things.

Even if you choose just the channels you want... you're still paying for them when you're asleep and at work.

We now live in an on-demand world... why not just pay for the shows you want? We don't even need channels anymore.

True that. I haven't paid for cable for years, and even when I had it I barely watched it. So basically I only watch shows on streaming services like Netflix. And if it's a show I really want to watch and it's not available to stream I just buy the bluray set and I have it forever.
The only downside is you have to wait to watch things. You don't get to have that collective shared experience with mainstream. But I think if you can just get a spouse or friend to watch with you, it's good enough.

 

[Khaaaaaaaaaan]

They Lost This Market

IMO, given the delay in updating their "hobby", they have lost this market for now. Like many here, I grew tired of waiting for them to update the hardware and that god awful interface and provide something new and fresh AND finally give us the App Store. Well, I switched to Amazon's FireTV which pretty much does just about everything I wanted. Plex, Netlfix, Prime, games, music, rentals and so forth.

This market is pretty cramped right now and unless they release something that totally blows away the Fire, it's not going to take off like they think. I really, REALLY wanted the ATV to be THE center of all my content since I'm committed to the ecosystem. But there's only so long I'll wait for this. We'll see what (if anything) comes out of these latest rumors.

-K

 

[malexandria]

Finally! Someone who doesn't Whine about Netflix

You're entitled to your opinion but I disagree, I think Netflix is a tremendous value. That's if you like television or documentaries, their movie selection isn't as good, although they have quite a few movies. But being able to watch complete series on-demand of shows like Lost, Fringe, Poirot, White Collar, The Borgias, Mad Men, and hundreds of others is great. And older shows that aren't even on the air anymore like Mission Impossible, Friends, Frasier, Twin Peaks, all the Star Trek series, etc.

Sure, you can have a cable subscription and a TiVo and theoretically watch all of them, but you have to have set the season pass If you miss it, too bad. Plus you need to skip over commercials, which there is no need for with Netflix. And of course with Netflix you can watch shows on your tablet, phone, or computer as well as tv, and your progress will sync across all of them (some cable companies have apps to do this but they are usually terrible and many are subject to various restrictions).

You could watch Netflix all day, every day, and take a long time to get through even a small piece of it. They also let you watch 2 different simultaneous streams, so you can share the subscription with someone else in your family or a friend (they have a slightly more expensive subscription that allows 4 streams).

Finally someone who doesn't whine about paying $10 a month for Netflix. I'm with you, I think the value is great, especially if you love TV and binging. Cable OnDemand, frankly sucks because it rarely has full seasons, and the episodes they do have of a current show are so weirdly selected that it makes it almost worthless. At least with netflix you can sit down and watching ENTIRE seasons and series.

 

[drewyboy]

In my experience, Amazon Instant Video is hands down better than Netflix. Don't know why others are so stuck on Netflix these days; maybe they never got to try Amazon.

Because their app just flat out sucks. They purposely mix free prime content with paid for content. I don't want to see paid, I want to see what I'm getting for free with my prime account. Navigation is horrible too. And their content in nearly identical to Netflix, at least for content my family and I watch.

 

[IJ Reilly]

Because Apple doesn't own that content and can't just arbitrarily make decisions like that. I myself think one way Apple could have controlled this conversation long ago would be if they had have taken control of sports worldwide (they certainly have the money to do this). Every so often these sports come on the chopping block but Apple doesn't put in a bid. Apple could pay these sports institutions such as NBA, FIFA, Premier League Soccer, NFL etc. etc. billions for years-long contracts and provide those channels for free on the Apple TV and literally most sports fans on the planet would now own an Apple TV and then they would be in a great position of negotiation power. And perhaps then they could also globalise content rights with sports and when brokering deals simplifying the whole procedure for customers giving them all the same content at the same time for the same or very similar prices worldwide.

Pipe-dream™

A modest proposal, indeed. Professional sports franchises are now selling their in-market broadcasting rights for billions, each. Multiply that by perhaps a hundred sports franchises in the U.S. alone (not even considering worldwide), and in short order, you are looking at numbers that even Apple can't handle. Broadcast rights for some professional sports might be available on a complete league basis, but not for U.S. sports. Add to that, a lot of these media rights contracts run for decades, so they won't even come up for renewal for another generation. It's a stinking swamp, I tell you. Nobody who wades into it comes out alive.