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Apple wants to replace cable TV for $30 a month
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Tech industry insiders are reporting that Apple has been conducting hush-hush negotiations with major TV networks to launch a subscription service for watching TV via iTunes. The rumored service -- which is rather vague in its parameters -- would be offered for $30 a month. A plan at that kind of price could be the death knell to traditional cable providers, which generally charge anywhere from $40 to $100 a month or even more.
So far, the report says, none of the networks have come to terms with Apple over this notion, but as the analyst at MediaMemo points out, this kind of on-demand/subscription viewing is going to happen, one way or another. Whether it's Apple that has the first major success with it or not, it's definitely the future.
Do you know anyone who would be interested in purchasing a subscription to every show on TV or even every show on a single network? Me neither. So how this would work, exactly? Will Apple present you with the opportunity to subscribe to say, ten shows, and then give you a buffet-style choice of any ten you want? Or are you stuck with every show, like with cable TV?
The difference, it seems, comes down to a vague distinction between "bill" and "subscription." With cable, you get everything, because the TV shows and networks make their money mostly from advertising that airs during the shows. But with a subscription-based service, you get something more akin to pay-cable networks like HBO and Showtime, where your subscription payment to the network negates their need to sell ads, so you get commercial-free entertainment.
If Apple is thinking of something similar for broadcast networks like ABC and NBC, or even basic cable networks like TNT and TBS, then this could completely change the business model of consumer television.
Imagine a future where you subscribe only to the networks -- or even better, the TV shows -- that you want to watch. Your bill amount is determined by the amount of TV you consume, and while you'd have the option of watching your shows live, your subscription would automatically deposit new episodes on the hard drive of your choice (such as Apple TV, perhaps?) when they become available, and store them there until you're ready to watch.
Can cable survive in the face of something like this? Or will the likes of Comcast and Time Warner find ways to adapt? They'll have to, if they want to live. Because anything that would reduce cable bills will be a success in the current economy.
Image: Apple, Inc.
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