Competition is Good
I think thgat this is a stupendous idea if Apple can get the major networks (both broadcast and cable) on line. The cable companies have long needed competition but somehow have managed to hoodwink both the feds and local governments into providing monopolies that only result in spirally escalating fees. Here is San Francisco, basic cable will set you back $450 per annum. If you add in some premium channels and one or two subscription services, you can easily shell out $1200-1400 a year. And this does not include internet service, which for decent broadband speeds, adds another $500 (at least). This is a hell of a lot of money to pay for television, particularly in view of the fact that cable companies have slowly but steadily gotten us used to their double-dipping, which now occurs on every channel, save the premium subscription services such as HBO. In the beginning, cable operators touted their service as superior to broadcast television because cable was commercial free. Over the last twenty years, cable operators have introduced more and more commercials to the point now that purely cable channels, such as BBC America, TNT, SiFi, etc., interpolate as many (or even more!) advertisements than their broadcast TV competitors. This is double-dipping on a grand scale and there is simply nothing the consumer can do to protest because there is no cable competition in local markets. Given the amount of money involved and the number of lobbyists ion DC and each of the state capitols, it is highly unlikely that any antitrust action could ever be successfully prosecuted.
Delivery of content through iTunes is probably the only way to provide a significant alternative to local cable companies, Satellite providers are great for rural areas where cable can't reach, but it provides no realistic competition because of installation costs, the need to additional interior installations for each tv, poor reception during bad weather and the need to maintain a phone line or internet access for upstream communication (internet, pay-per-view services, etc) with the satellite provider. Apple's entry is, however, by no means a slam dunk. It will need to get licensed content from most if not all of the major tv content providers. Ideally, it will need to provide a way for end users to record content to their local hard drives or provide on demand services for a period of several weeks after a program has been broadcast. Most importantly, it will need to be able to provide all of the content, save for subscription services such as HBO and Showtime, in one cost saving package that is significantly cheaper than what cable providers offer, say $30-40 per month. Otherwise there will be little incentive to drop the cable connection. Finally, it will need to significantly increase the quality of its 780p HD offerings, the resolution of which is scarcely better than 480p resolution one gets from a DVD. If it can put all these pieces together, Apple could well become the leading content distributor on the planet. And as long as competition between Apple and other content providers is secured and fostered, consumers will be the ultimate winners.