CBS Turned Down Apple TV Subscription Service Deal

[WhoDaKat]

I cut the cord 2 months ago and it was the best thing I've ever done. A Macbook Pro, iPad, and Apple Tv are all I need. CBS is making a huge mistake. There's a new subscription world upon us and either they embrace it or people will steal content. I'm not paying over $100 for Hillbilly Handfishing and the rest of the garbage they feed us. Oh and I also haven't seen a commercial in 2 months!!

Couldn't agree more! I cut it 6 months ago, and got wide band internet and a Netflix subscription. The family wants to know why we ever watched TV the way "they" wanted us to!

Honestly, CBS's decision is irrelevant. I can watch every episode of every show I want, whenever I want (and I don't mean Netflix . And just like the man said above, I haven't seen a commercial in 6 months! What fools these network guys must be. So desperate to cling to the only thing they've known... pathetic.

 

[thenerdal]

I don't see how how Apple will innovate with a TV.

 

[Stridder44]

CBS apparently hates making money.

 

[Jerome Morrow]

I only have cheap OTA digital TV subscription, because i watch sports and Discovery channel, but everything else i get from Netflix, iTunes and DVD/Bluray.


CBS is not even worth torrenting.

 

[Eidorian]

CBS aims for a middle aged dull audience who are not tech savvy (no, BBT doesn't count - it's another bland sitcom about couples now) and neither are CBS. They refused Hulu and it took years for CBS to finally put their shows on the Web and their site is crap. Barely any episodes available, poor interface, cluttered site that's hard to find stuff on ...

They think that because they have the most network viewers they don't need to try and court the tech audience and other platforms. All the old folk still watch the magic box in the corner.

This is no surprise and it is completely in line with Les' other decisions (Hulu, Netflix). Broadcast networks make the vast majority of their money on ad time, and the rate for ad time is driven almost exclusively by broadcast ratings in the 18-49 demo. Remember: You may be the consumer, but the advertisers are the customers.

NBC and ABC have used digital distribution to try to drum up their broadcast ratings (if you like the show, maybe you'll start watching it live). CBS doesn't care. They don't need to beg for ratings for most of their shows; they are doing just fine as it is. Despite their reputation for being an "old person's" network, their scripted shows still pull in good numbers in demo. Moonves doesn't see any reason (aka any money) in selling his shows out to digital distributors. He's come out and said so in the past.

Now, as much as I'd love for Apple turn the TV industry on its head like they did the music industry, I just can't see how they can. Until the viewer becomes the customer, there is no way to leverage the networks to bend to their will on this.

60 Minutes and Meet the Press are the only things worth watching anymore.

 

[DVDxR]

People will just steal content. Their lack of desire to get in the game will only encourage video 'Napsters' to pop up all over the place. They don't seem to understand you can't force people to watch absolute garbage for $120/month. Furthermore their advertising model is broken and has been with DVR's. Apple is actually doing the industry a favor my mainstreaming it immediately before people start to steal it everywhere. The musicians b*tched and moaned about Napster 15 years ago but we now buy all our music off iTunes. This IS going to happen whether CBS or the advertisers like it or not.

Now I have to go off and steal some commercial free content to watch. Have a good night.

That's the other problem. The number of people cutting the cord and pirating TV (including myself) is a drop in the ocean. It is not as easy and TV is a bit of a different beast than music. Music you get once and enjoy whenever. TV is more time sensitive for most people. It can be automated sure (I do it) but most people don't have the savvy and no one is going to create a commercial product that will easily allow you to do it anytime soon. Then getting the content onto a TV another challenge. Again, doable but it requires being a bit of a geek to get it done.

When you get down to it you really can't compare them in this respect. The business model is totally different. If anything, it would be more accurate to compare TV to Radio, but even then the differences are substantial. You also have to consider that the music industry was slow to react legally to challengers like Napster, and didn't see the disruptive potential of the iTunes deal. Television execs have plenty of history to study where the music industry had none.

Don't think for a moment that I don't want to see this happen, I do. With a passion. I hope Steve found some brilliant strategy no one sees coming to make it happen. I would love to be able to just pay a small fee to subscribe to a show monthly and get it delivered day and date to my devices. There is just too much money in keeping things as they are now.

The pressure needs to be placed on advertisers to get with it and start paying rates comparable to broadcast rates for ad time in digital formats and stop worrying so much about live vs delayed viewers. Don't think you're going to replace the advertisers with subscribers either. I don't think most people would pay what it would take to replace advertising dollars on all but maybe the biggest hit shows.

 

[MisterK]

I had an idea today

What if Apple allowed commercial breaks but the commercials are targeted to me based on my preferences, location, and the shows I'm watching. This would make it that a show from anywhere in the world could have advertising that applies to me. This is great for the advertiser being able to reach a more likely customer, for me (because now I can choose between any show in the world on demand and see ads I might care about), and the publisher of the show (because they can now make revenue off advertisers from all over the world and not have to worry about securing them). Suddenly, with Apple taking care of the localized advertising partnerships, the traditional TV network becomes less important. Think of it like visiting a website from across the world, but you still see that local Groupon ad on the side from GoogleAds.

I'll give an example. I want to watch Indian Sesame Street but I live in San Francisco. I say "Watch Indian Sesame Street" and it comes up. After a few minutes I hit a commercial break. I see a commercial for Indian food in San Francisco, diapers, an Apple commercial, and some girl's toys. That's great. These are all things I might care about (no daughter yet, but for the sake of the example...).

I'm sure there are a few bugs in this, but imagine the budgets of shows when they become popular the world over. They would collect money from local advertisers in a million locations. And there would be large companies still doing national ad campaigns, of course.

Any show from anywhere in the world. Now include Podcasts... the advertiser doesn't care that it's low budget... just that I'm watching. I said I want to watch crazy French Bulldog videos and after a while a commercial break comes up for dog food, a local pet store, it still knows I like Indian food.....

These commercials wouldn't need to be any more frequent than what's on cable right now, but they could cover the entire cost of the shows.. no more cable bill and MUCH better advertisements.

 

[thenerdal]

What if Apple allowed commercial breaks but the commercials are targeted to me based on my preferences, location, and the shows I'm watching. This would make it that a show from anywhere in the world could have advertising that applies to me. This is great for the advertiser being able to reach a more likely customer, for me (because now I can choose between any show in the world on demand and see ads I might care about), and the publisher of the show (because they can now make revenue off advertisers from all over the world and not have to worry about securing them). Suddenly, with Apple taking care of the localized advertising partnerships, the traditional TV network becomes less important. Think of it like visiting a website from across the world, but you still see that local Groupon ad on the side from GoogleAds.

I'll give an example. I want to watch Indian Sesame Street but I live in San Francisco. I say "Watch Indian Sesame Street" and it comes up. After a few minutes I hit a commercial break. I see a commercial for Indian food in San Francisco, diapers, an Apple commercial, and some girl's toys. That's great. These are all things I might care about (no daughter yet, but for the sake of the example...).

I'm sure there are a few bugs in this, but imagine the budgets of shows when they become popular the world over. They would collect money from local advertisers in a million locations. And there would be large companies still doing national ad campaigns, of course.

Any show from anywhere in the world. Now include Podcasts... the advertiser doesn't care that it's low budget... just that I'm watching. I said I want to watch crazy French Bulldog videos and after a while a commercial break comes up for dog food, a local pet store, it still knows I like Indian food.....

These commercials wouldn't need to be any more frequent than what's on cable right now, but they could cover the entire cost of the shows.. no more cable bill and MUCH better advertisements.

That would seem hard to do since it's the TV networks that are in control of the commercials.

 

[kiljoy616]

Apple not giving them enough money or what?

What do you think?

 

[DVDxR]

What if Apple allowed commercial breaks but the commercials are targeted to me based on my preferences, location, and the shows I'm watching. This would make it that a show from anywhere in the world could have advertising that applies to me. This is great for the advertiser being able to reach a more likely customer, for me (because now I can choose between any show in the world on demand and see ads I might care about), and the publisher of the show (because they can now make revenue off advertisers from all over the world and not have to worry about securing them). Suddenly, with Apple taking care of the localized advertising partnerships, the traditional TV network becomes less important. Think of it like visiting a website from across the world, but you still see that local Groupon ad on the side from GoogleAds..

I've always thought about that type model. Create gaps in the show source and software to insert ads based on location and demographics. There are two problems. First the advertisers are just stubborn when it comes to ad rates for digital content. The second is any type of digital distribution that is not significantly delayed is going to create a situation where the channels are competing against their distributors (TV Stations, cable/sat providers) and right now that is where they make most of their money (get the most high-dollar eyeballs to sell to advertisers). Add in international distribution and it gets even worse.

And we are talking about a lot of money. Even with ad rates dropping due to viewer fragmentation (more content on at the same time via cable channels) a 30 minute show on broadcast TV pulls in 150-250K per 30 second spot. Considering most shows have 6-8 minutes of commercials per 30 minutes that adds up fast!

 

[MisterK]

Networks would no longer take care of the ads. Apple would.

That would seem hard to do since it's the TV networks that are in control of the commercials.

Sorry... I was unclear. That was my point. Apple should hook up iAds (actual video commercials) for TV shows and Podcasts and give the ad revenues to the shows' producers.

 

[kiljoy616]

I cut the cord 2 months ago and it was the best thing I've ever done. A Macbook Pro, iPad, and Apple Tv are all I need. CBS is making a huge mistake. There's a new subscription world upon us and either they embrace it or people will steal content. I'm not paying over $100 for Hillbilly Handfishing and the rest of the garbage they feed us. Oh and I also haven't seen a commercial in 2 months!!

Welcome to the clan, Its been even longer than that for me. I gave up on cable some years ago. You know I miss nothing from it, and have found a bit more things to do rather than been glue to the TV over useless content.

----------

I bought a house in Suffolk County, Long Island, NY.

Cablevision is a joke and in my town of Brookhaven, the politicians are controlling whether Verizon can push their Fios out east.

My biggest concern about cutting the cord and relying on Apple TV and streaming service is sports. I need NFL, MLB, NHL. What do people do to get their sports fix? ESPN plays all day long in the background just for something to listen to.

You get Apple TV2 they do have sport viewing on it. I don't watch it but its there.

 

[dethmaShine]

Can someone explain how these ad-splits work?

Thanks

 

[Tilpots]

Apple doesn't need CBS to be successful, plain and simple. 2 of the 4 networks would be more than enough to disrupt the status quo. ABC and Fox will join. CBS thinks its too big to fail and Comcast with NBC doesn't know the ropes yet. None of the 4 will control the top ten in a decade though, because independent entrepreneurs will storm the market. Choice will prevail. The democratization of TV will upend the major networks and finally, finally, the viewer will wrest control of their experience. (Hooray!)

 

[DVDxR]

Can someone explain how these ad-splits work?

Thanks

The distributor (Apple in this case) works with the network to book ads on the digital stream of the show. They then split the revenue from the ads based on some predetermined percentage.

 

[Trapped Wind]

That's the other problem. The number of people cutting the cord and pirating TV (including myself) is a drop in the ocean. It is not as easy and TV is a bit of a different beast than music. Music you get once and enjoy whenever. TV is more time sensitive for most people. It can be automated sure (I do it) but most people don't have the savvy and no one is going to create a commercial product that will easily allow you to do it anytime soon. Then getting the content onto a TV another challenge. Again, doable but it requires being a bit of a geek to get it done.

When you get down to it you really can't compare them in this respect. The business model is totally different. If anything, it would be more accurate to compare TV to Radio, but even then the differences are substantial. You also have to consider that the music industry was slow to react legally to challengers like Napster, and didn't see the disruptive potential of the iTunes deal. Television execs have plenty of history to study where the music industry had none.

Don't think for a moment that I don't want to see this happen, I do. With a passion. I hope Steve found some brilliant strategy no one sees coming to make it happen. I would love to be able to just pay a small fee to subscribe to a show monthly and get it delivered day and date to my devices. There is just too much money in keeping things as they are now.

The pressure needs to be placed on advertisers to get with it and start paying rates comparable to broadcast rates for ad time in digital formats and stop worrying so much about live vs delayed viewers. Don't think you're going to replace the advertisers with subscribers either. I don't think most people would pay what it would take to replace advertising dollars on all but maybe the biggest hit shows.

I agree with most of what you were saying. I guess I don't see a problem with subscriptions with less TV choices and better TV. Oh, and without advertising. The content on TV is absolutely horrible these days so I see it being all upside from here. Advertising isn't any better. I've seen enough boner medication ads to last a lifetime at this point. This whole cable free/advertising free movement should be a warning to all of them...either produce better shows or I'll continue to FoxyProxy/torrent/tunnel into different countries and watch their shows...without commercials. The one thing this experience has taught me for sure is that I don't need to watch the latest show on time. The next day works just fine. The industry is going to change or be changed.

----------

Couldn't agree more! I cut it 6 months ago, and got wide band internet and a Netflix subscription. The family wants to know why we ever watched TV the way "they" wanted us to!

Honestly, CBS's decision is irrelevant. I can watch every episode of every show I want, whenever I want (and I don't mean Netflix . And just like the man said above, I haven't seen a commercial in 6 months! What fools these network guys must be. So desperate to cling to the only thing they've known... pathetic.

I couldn't agree more!

And I agree about CBS. They haven't produced a really good show since Magnum PI and that was 20 years ago.

 

[iEvolution]

LOL@ CBS trying to live in the past instead of looking to the future.

 

[Gregintosh]

CBS has a market capitalization of about $16.4 Billion.

Apple has $81 billion in cash. And likely to add another $5+ billion by the end of this quarter.

If Apple really wanted to, they could BUY CBS and do whatever they want with ALL of CBS's content. Oh, and they'd still have ~$65 billion left over (maybe $70 billion after the year's over.. and growing).

 

[DVDxR]

I agree with most of what you were saying. I guess I don't see a problem with subscriptions with less TV choices and better TV. Oh, and without advertising. The content on TV is absolutely horrible these days so I see it being all upside from here. Advertising isn't any better. I've seen enough boner medication ads to last a lifetime at this point. This whole cable free/advertising free movement should be a warning to all of them...either produce better shows or I'll continue to FoxyProxy/torrent/tunnel into different countries and watch their shows...without commercials. The one thing this experience has taught me for sure is that I don't need to watch the latest show on time. The next day works just fine. The industry is going to change or be changed.

You have to remember networks make shows, but viewers keep them on the air. They make the crap that the majority of the people want to watch. It's not that they can't make good shows (well, except for maybe NBC which can't find its ass with a map and compass) it is just that the majority of viewers don't consider them good. Look at Mad Men. Fantastic show, but it gets destroyed when you compare its ratings to Jersey Shore. That's not the networks or advertisers fault. That's squarely on the viewing public.

What I'm getting at is be careful what you wish for. Fewer choices will not lead to better TV. God help us..

As for getting rid of ads, your talking about anywhere from $0.15 up to $1.00 per show in ad revenue, per viewer that they would have to replace. Even more for sports. Plus Apple will then need their cut, so tack on 30%.

 

[Aldaris]

LOL@ CBS trying to live in the past instead of looking to the future.

I'm sure it's not just CBS, Apple will be kicking up dust among all the Networks, and providers with a subscription deal.

As others have stated the 'cut the cord' and AppleTV is the ideal route at the moment, I'd join if it weren't for Dexter, just something that I'm not ready to give up just yet. For those of you unaware Showtime doesn't post their episodes/seasons until nearly a year after the finale airs on cable.

I'm just not ready to be a year behind, and don't want the torrent route, other than that everything else I'd care to watch can be got via iTunes or Netflix.

Comcast and others are wallet raping too much, and somethings gotta give or more and more will embrace the internet route. It is the future anyway right?

 

[dampfnudel]

Wirelessly posted (Mozilla/5.0 (iPod; CPU iPhone OS 5_0 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A334 Safari/7534.48.3)

TV execs are like greedy squirrels collecting as many acorns as possible before "winter" arrives. They're scared that the same thing that happened to the music industry is slowly happening to their industry.

 

[LethalWolfe]

Did anyone actually read the article or just base their opinion on the tiny slivers that were quoted in the OP?

From the article:

Now that decision seems to be paying off, as CBS and The CW, its joint venture with Time Warner, are striking big-money licensing deals with streaming providers that are contributing heavily to its top line. Earlier this year, CBS struck deals with both Netflix and Amazon to make classic library content like Cheers and The Wonder Years available on their streaming services. More recently, The CW has licensed its shows out to Netflix and Hulu in deals that Moonves said today would turn the network from a “money loser for CBS to a profitable venture.”

In both cases, CBS received lots of guaranteed money for streaming rights. In his prepared statements today, Moonves said CBS was receiving “hundreds of millions of dollars” from streaming providers like Netflix, Amazon and Hulu, and that there were potentially more deals in the works. As consumer demand for streaming content continues, Moonves said he feels good about being able to make significant money from online viewership year in and year out, regardless of which online distributor wins.

So CBS turned down streaming w/Apple because Netflix, Hulu and Amazon apparently offered better deals. Jeez, what a bone head move. I mean, what does Netflix know about streaming? And Amazon? Who even knows what Amazon is? And don't get me started on that old media dinosaur called Hulu...


Lethal

 

[AppleScruff1]

Good for CBS. It's about time someone doesn't cave in and bow to Apple. Apple is the monopoly now, even thought they once hated monopolies.

 

[ProwlingTiger]

Good for CBS. It's about time someone doesn't cave in and bow to Apple. Apple is the monopoly now, even thought they once hated monopolies.

You don't understand the definition of a monopoly.

 

[Peace]

Did anyone actually read the article or just base their opinion on the tiny slivers that were quoted in the OP?

From the article:

So CBS turned down streaming w/Apple because Netflix, Hulu and Amazon apparently offered better deals. Jeez, what a bone head move. I mean, what does Netflix know about streaming? And Amazon? Who even knows what Amazon is? And don't get me started on that old media dinosaur called Hulu...


Lethal

I don't think Apple was interested in paying hundreds of millions of dollars to stream old,outdated re-runs like Hulu and amazon. They already have prime time current shows from CBS for sale on iTunes.

Apple was wanting to stream current TV shows.