The services for iTunes took the record labels by surprise. Other content owners learned from this move Apple made and are not willing to sell (or license) their lively hood to Apple - My guess, it also could turn around that content providers will offer near similar services through a consortium of their own. Lets face it, it not about the box next to your TV, its about who owns the content and the services provided.
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Apple Negotiating With Cable Companies and Networks to Allow Viewers to Pay to Skip Commercials
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The services for iTunes took the record labels by surprise. Other content owners learned from this move Apple made and are not willing to sell (or license) their lively hood to Apple - My guess, it also could turn around that content providers will offer near similar services through a consortium of their own. Lets face it, it not about the box next to your TV, its about who owns the content and the services provided.
No, the TV producers get the SAME or more money. They get it from Apple rather then from advertisers. And Apple gets the money from you.
It works because the typical Apple customer is affluent and can afford another $25 or so per month
The producers should like the idea if Apple offers a long term contract, money they can count on.
HobeSoundDarryl
macrumors G5
Making up a lower number doesn't make it true. To replace all of the commercial-driven revenue, it will need to be at least $54 per household per month, not "$25 or so". Commercials running during the shows we watch- even if we DVR skip them- and on the "hundreds of channels we never watch" throw a LOT of money into the pool. $25 would be emptying that pool by more than half.
If the content producers suddenly have their cash flows cut by more than 50%, their volume of output and likely quality of output must go down.
This dreaming doesn't work if we think Apple can replace the Comcasts with a commercial-free version of the existing model and we consumers end up paying a lot less than we do now. Apple will want to make theirs. Comcasts, etc will make up any losses taken by Apple in higher broadband rates "for heavier users" (tiers). If we consumers still end up paying less than now, who's left? The content producers would have to take a big hit to make all that work.
As is always the case in all calls for new revenue models: everyone in the chain wants the new model to make them MORE- not less- money. A successful change needs to show everyone how they are going to make more money. We consumers are the first link in the chain: one of the two sources of the money (with OPM paying for commercials being the other). If the source of the river goes from a big flow to a trickle, the river on downstream cannot roar.
Here's the bottom line. SOMEONE is going to be paying the bill.
Maybe it's Apple who offers a free service with Ads. Maybe it's Apple who also offers a premium service with less or no ads.
But at the end of the day - I can't believe anyone here thinks that they will either not be paying as much or the same to Apple than they would for cable. Unless they offer ala carte and you only choose a program or two.
But right now iTunes offers TV series - at what - 1.99 a show? (is that right? I never buy tv). A season is anywhere from 24-48 bucks (estimated).
What makes anyone think that they will simply reduce their revenues from that and give an entire channel for less than what they can make if you like a show?
Maybe it's Apple who offers a free service with Ads. Maybe it's Apple who also offers a premium service with less or no ads.
But at the end of the day - I can't believe anyone here thinks that they will either not be paying as much or the same to Apple than they would for cable. Unless they offer ala carte and you only choose a program or two.
But right now iTunes offers TV series - at what - 1.99 a show? (is that right? I never buy tv). A season is anywhere from 24-48 bucks (estimated).
What makes anyone think that they will simply reduce their revenues from that and give an entire channel for less than what they can make if you like a show?
The topic of tying to pry content out of the cable/satellite companies' control is very much of concern to me, as I plan to cut the cord once my current contract with DirecTV expires this coming winter. (As a long-time subscriber, I've become horrified at both the plummet in customer service/support and the increased add-a-fee attitude.)
For the most part, it won't be a problem. I really don't watch that many TV shows, so the ones I can't get OTA (probably get an Elgato EyeTV for the Mac to record that) I'll pay for individually in the iTunes store, which would allow me to spend less money and get the shows I really want to see, some of which (like Game of Thrones, for example) are on premium channels that I don't currently subscribe to.
Where it's going to cause the most change, however, are sports and other live events. Some of that stuff is on OTA, of course, and some of it is available in the season pass type subscriptions (and here, the rumor of DirecTV giving up exclusivity on the NFL package in 1-2 years might be big), but as a consumer, I'd like to be able to get a streaming subscription to channels like ESPN or NBCSN, without the cable/satellite lock-in, or at least to specific types of events (e.g., EPL on NBCSN, or maybe the whole NBC coverage for the Winter Olympics, or the upcoming World Cup).
For those, I'd expect that I'd get no commercials. If I'm paying the content provider directly (or indirectly through the iTunes store or the like), they're getting paid already, right? Or offer a two-tier option where one includes commercials and the other is commercial free.
For live events, of course, commercial-free begs the question of what is broadcast during commercial breaks. But they broadcasters can get creative there, starting with a simple soundtrack in the background while they show shots from the cameras, or maybe display stats, other scores, etc.
For the most part, it won't be a problem. I really don't watch that many TV shows, so the ones I can't get OTA (probably get an Elgato EyeTV for the Mac to record that) I'll pay for individually in the iTunes store, which would allow me to spend less money and get the shows I really want to see, some of which (like Game of Thrones, for example) are on premium channels that I don't currently subscribe to.
Where it's going to cause the most change, however, are sports and other live events. Some of that stuff is on OTA, of course, and some of it is available in the season pass type subscriptions (and here, the rumor of DirecTV giving up exclusivity on the NFL package in 1-2 years might be big), but as a consumer, I'd like to be able to get a streaming subscription to channels like ESPN or NBCSN, without the cable/satellite lock-in, or at least to specific types of events (e.g., EPL on NBCSN, or maybe the whole NBC coverage for the Winter Olympics, or the upcoming World Cup).
For those, I'd expect that I'd get no commercials. If I'm paying the content provider directly (or indirectly through the iTunes store or the like), they're getting paid already, right? Or offer a two-tier option where one includes commercials and the other is commercial free.
For live events, of course, commercial-free begs the question of what is broadcast during commercial breaks. But they broadcasters can get creative there, starting with a simple soundtrack in the background while they show shots from the cameras, or maybe display stats, other scores, etc.
FYI, cable has more profit margin than telephone and internet services combined. That's just on the cable companies end, not the content owner.
I can't say I'm fond of paying extra to fund other people's viewing habits, nor do I want them to subsidize mine. Let me pay for the content I want to watch, and let the content creators make their money based on the demand their shows create, not by piggy-backing unpopular content on other fees.
And your show might not ever make it into production. Why? Much greater risk to produce new shows if there isn't subsidies coming from other productions. Studios aren't going to fund as many shows on a "maybe"
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Ok. Let's go with Apple disrupting the system. Unless cable companies are making as much - how do you think they will respond? I think it's pretty fair to say that they will make up revenues by increasing internet costs and possibly metering as well. Again - any new system isn't going to come without its costs.
That presumes that "commercial skipping" fees are the only factor here. If people are paying for the content directly in the first place, it skews the revenue stream for the content distributor to start with. I don't know the numbers, but the math says
(subscriptions x subscription price) + (skippers + skipper price) - income from cable, et. al - ad revenue = ???
If "???" is greater than zero, then it's a good deal for the content distributors. If it's less, not so much.
I agree. After all - he made those eBook negotiations that had no negative consequences! Oh wait...
No one said it wouldn't end up with people in Jail
Just that it was ballsy..Nonsense. They do it all the time - look at how many shows get cancelled after only an episode or two airs, even in the "low-risk" reality genre. As with any investment, you have to take some risks, and there will always be some subset that don't pan out.
It may, of course, change the model, with more focus on funding pilots or short runs and less on committing to a new series until it's proven itself as one possible outcome. Another might be that shows get produced, at first at least, for less, cutting out the overpriced big name actors and gratuitous special effects. After all, a show that only costs $100,000 per episode to make is going to need to sell a lot fewer subscriptions to make money than one that costs $1,000,000 per episode.
Look at what the iTunes store distribution model has done for niche music. There's no reason to suspect it can't do the same for movies and television. (To some degree, it probably already does for movies.)
What?!
Paying to skip commercials? Never!
Just "time shift". Use your DVR to start recording a show then start watching the recording 20-25 mins after it starts. FFwd through the commercials and it'll end right on time. I never watch a show live anymore. Usually watch it an hour later, or even the next night. I cannot stand commercials. When cable TV bills are 130-200 per month, nobody should be forcefully subjected to commercials or be forced to pay to skip commercials.
Paying to skip commercials? Never!
Just "time shift". Use your DVR to start recording a show then start watching the recording 20-25 mins after it starts. FFwd through the commercials and it'll end right on time. I never watch a show live anymore. Usually watch it an hour later, or even the next night. I cannot stand commercials. When cable TV bills are 130-200 per month, nobody should be forcefully subjected to commercials or be forced to pay to skip commercials.
You typically leave no doubt about your feelings for Apple, and it tends to lean against. But a couple of statements I'll make here: First, I'm not sure whether your general negativity around Apple on this subject stems from your belief that Apple is somehow trying to replace one king with another, or because you think they've just been ineffective at disrupting this well entrenched business model thus far.
I'd say that Apple's moves in the video entertainment industry have thus far been less than revolutionary (although one could argue that they have put a little pressure on the current model). But I submit that it's the media distributors who are to blame here. They want to keep the status quo, or even engage in further incrementalism to squeeze more dollars and keep choices out of the hands of consumers. Apple, in the early years of this century used their dominant market position in music players to exert pressure on a music industry that was stuck in their old, greedy and shortsighted business model, but was losing ever larger chunks of revenue to easy pirating. In essence, Steve Jobs saved them from themselves. And the consumer ended up winning. Now, instead of having to go to some combination record store/head shop and pay $17 for a CD of 10 songs we'll never listen to in order to get the one we want, we can buy that one song for $.99 or $1.29, and get it on our devices (all of them) instantly. I won't go into all of the other reasons why we're better off than before, but they're well documented. And pirating of music is much less of an issue for the music industry, while they get what is now a FAIR price for their product.
In video media things have not yet worked out that way. The proliferation of viable competing hardware alternatives for delivery, along with back room deals between politicians and media companies (i.e., the NBC-Comcast merger, and the continuation of municipal cable monopolies among other things) have kept a player such as Apple from being able to bring forth the same disruption to this market. Contributing factors also include the mindless masses still being willing to pay $12 for a movie ticket so that Harrison Ford can make $20 million for a movie. Or to pay $20 for a Blu-ray disc that costs $2.00 to bring to market. But that's a complicated and detailed discussion that could warrant it's own website. Suffice to say, breaking up the video media cartel is a long, uphill battle.
You mention in one of your earlier posts that many people don't understand that cable companies subsidize a lot of the channels "that people watch" by charging for others (I paraphrase). But the fact of the matter is that cable companies bundle a lot of useless crap that nobody watches into "great packages" and then charge an outrageous price for the whole bundle, while spouting the line that they're protecting choice by underwriting the crap with the profits from the big money makers. Fact is, nobody would miss the crap channels if they went away, and the market would be better overall if they did, and the cable companies were forced to price the product on an a la carte basis. But, as has been shown time and time again, in many industries, bundling is good for the status quo business model and bottom line, while being oppressive and bad for the consumer (see, AT&T/Bell telephone companies, Cellular technology companies, gas transmission companies, etc.). What would really be good for the consumer is if the cable companies were forced to stop hiding their profits behind those niche channels that nobody wants or watches, and the consumer had the choice to pick the few decent channels that they want off of the "shelves" of any "store."
I see Apple as a company who is trying to innovate and find weaknesses in the fortress wall of these media companies in order to divide and conquer, and disrupt their market. In the end I see it as a good thing for consumers should they succeed. Am I giving Apple the benefit of the doubt? Yes. But they've earned it, IMO from what they did to the music industry, and what they've done so far to the mobile computing (i.e. cell phone) industry. And although their overall desktop/traditional laptop market share is still small in comparison to Windows, I've seen them do it to a certain degree in that market as well. Without Apple, Windows 7 would not have been nearly as good as it was, and the WinTel PC industry would still be trying to sell us netbooks, instead of playing catch up to Apple in the ultrabook category. Then there are the iMac copycats...
Second, this is a rumors site. Not the New York Times. By definition the people who visit and participate in this site do so for the rumors, and speculative discussion around said rumors. As far as your mantra that we shouldn't speculate, I believe that's a silly argument to make on a rumor website. I'll leave it at that.
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I don't watch a ton of TV - not even 1/4 of what my couch potato roommate watches..
But ill tell you what - i would miss commercials if they simply went away for ever. One of the problems i have with Netflix is the constant silence when flipping through searches.
I would also have a problem watching TV where i didn't know what was live and what was not! I don't think i could live without LIVE television!
But ill tell you what - i would miss commercials if they simply went away for ever. One of the problems i have with Netflix is the constant silence when flipping through searches.
I would also have a problem watching TV where i didn't know what was live and what was not! I don't think i could live without LIVE television!
Free is always nice, but I'm willing to pay for ad free content. Netflix is a great example, it baffles me whenever I hear anyone complain that it's too expensive. I'd love to pay HBO whatever they'd be getting if I had them as part of a cable subscription…they could offer that, but they just don't. The new iTunes radio is almost enough to get me to subscribe again to the (otherwise terrible) iTunes match.
Like I said, depends on what that pricing is.
Source?
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I'll just respond to this. I think you've mistaken by mantra. Speculation is fine. Stating opinions or speculation as fact I'm less "ok" with.
Saying "this is what Apple is going to do" - especially on something that is so vaporware right now seems silly. Sure - go ahead and speculate. But the "ego" (and yes - I have one too) of some people to imply they are inside cuppertino and have knowledge that others don't and/or their opinion trumps others is silly. In another thread someone tried to convince me that their speculation was more accurate than mine. Really? Again - nonsense.
Advertising has ruined the Television experience for me. I got rid of cable not to save money but because I simply could not tolerate the CONSTANT commercial breaks. I remember an hour long show would have 3 commercial breaks roughly every 15 mins. Now it seems like there is a commercial interruption every 5 minutes. Than we get stupid animated commercial graphics in the corners of the screen, scrolls on the bottom of the screen reminding us of what is coming up next. Watch an older hourly show on Netflix and it's often a little more than 50 mins. These were shows that we watched for Free over the air and we only had to watch 10 mins of advertising. No complaints there but now watch a newer hourly show on Netflix and its often just 40 mins. So to watch 40 mins (that I paid for) I need to negotiate 20 mins of advertising ? No thank you. I will wait to watch it on DVD or streaming and will gladly pay more for an ad free (or limited ads) experience
I am not anti advertising but it has gotten to the point that watching most shows involves an excessive amount of interruptions that ruin the viewing experience.
I am not anti advertising but it has gotten to the point that watching most shows involves an excessive amount of interruptions that ruin the viewing experience.
HobeSoundDarryl
macrumors G5
Source it yourself: total television advertising revenue for the U.S. It's posted regularly to show the fortunes of the television advertising industry. I used that number from about 2 or 3 years ago (last time I looked it up) divided by total number of U.S. households (look that up via census data or similar) divided by 12 months (I don't think I need a source to confirm 12 months in a year).
Edit: nevermind, here's one: http://www.mediapost.com/publicatio...to-pass-70-billion-for-the.html#axzz2ZE91sQLN
- $70 Billion in US television ad spending in 2011 per that source.
- 114,761,359 U.S. Households per: http://quickfacts.census.gov/qfd/states/00000.html
$70,000,000,000 divided by 114,761,359 = $609.96 per household per year
$609.96 divided by 12 = $50.83 per month to make up if our dream of commercial-free television comes to pass.
So, the year I looked at it, it was about $54 per household and in 2011 is was about $51. The point is that if we want commercial-free television, we're killing off a very lucrative subsidy paid for in other people's money. Unless Apple is going to lose a LOT of money to make up for that OR the content creators are going to take a HUGE haircut to live with much less revenues formerly realized from commercials running on channels "I" watch and "hundreds of channels 'I' never watch", the replacement model needs to bill us consumers at least (now) $51 per household to kill the commercials.
Our "greedy" cable bills also flows some of that subscription revenue to the content creators too, so if Apple becomes the new cable company alternative, THAT revenue needs to be put on top of the $51. And Apple likes to put their cut (30%?) right up on the very top. Add that together and we don't get a commercial-free replacement from Apple for anything like the usual dream of $5 or $10 or $30 per month.
And even if we want to believe that somehow Apple can do it without the content creators having to cut production volume, variety and quality to "starving artist" (can you say youtube?) levels, there's still that nagging problem of Apple's replacement being entirely dependent on the broadband pipe that is very likely owned by the cable companies this replacement solution would be aiming to hurt. Thus, broadband rates will go up, probably under the excuse of "higher bandwidth users" via ever-tightening tiers. We've already seen that movie and that's exactly how it plays out. In fact, some of the corporate players that injected ever-tightening tiers under the excuse of "higher bandwidth users" are also the very same players in the cable TV and broadband internet business. Why would we expect them to do anything different that benefits us consumers with lower out-of-pocket costs with this sequence of events?
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While I loathe commercials, I loathe paying monthly for channels I don't need even more. I wouldn't mind commercials if I was allowed to select only the programming I want, otherwise passing the payment onto customers to bypass ad revenue doesn't seem a "win" for consumers.
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I recently found an old BetaMax tape with recorded shows from the 80's ("Max Headroom", "Cheers", and a few other golden oldies). I was surprised to realize 1 hour network shows had ~10 minutes of commercial airtime, compared to 15-20 today. It's become even more prevalent via internet; YouTube, Facebook, general sites - anything to create more revenue that inevitably pushes visitors away.
If I see that Geico lizard one more time.
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I recently found an old BetaMax tape with recorded shows from the 80's ("Max Headroom", "Cheers", and a few other golden oldies). I was surprised to realize 1 hour network shows had ~10 minutes of commercial airtime, compared to 15-20 today. It's become even more prevalent via internet; YouTube, Facebook, general sites - anything to create more revenue that inevitably pushes visitors away.
If I see that Geico lizard one more time.
Safe to assume thought that Apple isn't getting into the cable TV business. They are just looking to make a deal with the cable companies to offer, presumable, a STREAMING service... an alternative to Cable+DVR. Probably a blend of on-demand and live. Who knows what the pricing will be. But the idea is the more you pay, the fewer ads you get. *IF* it's cheaper than cable (and for this to work it pretty much has to be)... then people may be willing to put up with ads. Or if you want to watch a LOT of stuff without ads... maybe the price will approach something similar to a $200 cable bill. All speculation at this point. Interesting approach though.
HobeSoundDarryl
macrumors G5
Unfortunately, I think this is probably the most likely play of any of the dreams posted in this thread. The only way we get the other dreams will require a way for Apple to bypass the middlemen (cable companies) who control our broadband pipes. Thus, there must be a companion rumor that makes it possible to link us consumers directly to iCloud without having to go through the toll booths of a Comcast, Time Warner, AT&T, Verizon, etc.
The analogy is very simple: look at iPhone. Regardless of the genius that one can attach to the iPhone product from Apple, it's toll masters still set the pricing for the service. If there was no service, the iPhone would be an iPod Touch. Thus, iPhone is heavily dependent on the middlemen that provide the service that makes it more than an iPod Touch.
This is not that different. Some of the middlemen are even the very same players. How we can dream that somehow they wouldn't flex while Apple was eating their cable TV business revenues is entirely beyond me.
The dreamers need to see a companion, viable rumor that makes it probable that Apple can link us consumers directly to iCloud. Then, something more like some of the more favorable incarnations of the dream actually has a chance. But even there, I don't see any scenario where we can replace what we actually like about the cable service with an Apple replacement and we (consumers) end up paying only a fraction of what we pay now. Apple will want theirs; the content creators will want (and need) to make as much money as they make now; who's left?