Apple’s TV Plans Come Into Focus
Apple’s TV Plans Come Into Focus
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It looks as though Apple is solidifying its plans to deliver a streaming-TV service, which may have cable-TV providers quaking in their boots. Whether Apple has come up with the right formula to attract cord-cutters is a big unknown, however, as is the potential profitability of such a venture. Streaming-TV “will quickly be a very low-margin business,” predicted tech analyst Rob Enderle. |
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Email03/18/15 2:36 PM PT
Apple is expected to launch a Web-TV service this fall, offering 25 channels of content from various providers, according to The Wall Street Journal.
Apple’s pending move “is yet another sign that the traditional pay-TV provider lock on programming distribution continues to erode,” said Greg Ireland, a research manager at IDC.
“The availability of more options, particularly those from strong brands such as Apple, will attract attention from cord-cutters and current pay-TV subscribers alike,” he told the E-Commerce Times.
Channel availability, pricing and packaging will impact consumers’ decisions as to whether to switch from a cable service provider, but “the entry of Apple is a big deal insofar as [it] is a dominant consumer brand,” Ireland suggested, and it “will leave folks wondering when Amazon, Google and Netflix will join with similar services.”
What Apple May Offer
Apple reportedly will offer content from ABC, CBS and Fox over Apple TV.
Further, it is in talks with Disney, CBS and Fox, according the WSJ.
It’s likely that consumers will be offered a bundle with well-known channels only, unlike many cable-TV packages that include a slew of minor channels.
They will be charged US$30 to $40 a month for the service, which will run on all iOS devices. It is expected to hit the market in September.
“We’re seeing the rapid death of traditional cable,” said Rob Enderle, principal analyst at the Enderle Group.
NBCUniversal apparently is not included because its parent company, Comcast, has been on the outs with Apple following fruitless discussions about collaborating on a streaming-TV platform.
The HBO Booster Shot
HBO recently inked a deal with Apple as its exclusive digital launch partner for the HBO Now streaming TV service, slated to debut in April. It will cost $15 a month and will run on iOS devices.
However, Apple’s exclusive rights cover only the first three months after launch, and extend only to non-MVPDs (multichannel_video_programming_distributors) like Roku and Google Chromecast.
Still, “the more content there is, the more fruitful,” suggested Mike Jude, manager of the Stratecast consumer communication services program atFrost & Sullivan.
Possible Trouble Spots
Apple has several potential competitors, including Comcast’s X1, Dish’s Sling TV and Sony’s PlayStation Vue, which launched Wednesday in three U.S. cities.
“There are a lot of firms chasing this, and there isn’t a lot of room for the margins that Apple is used to,” Enderle pointed out, adding that this “will quickly be a very low-margin business.”
Another problem is that Apple might get dinged under the new Net neutrality rules, as it could be considered a common carrier, Jude told the E-Commerce Times.
“Does Apple have a carrier of last resort obligation?” he wondered. “Does it have a requirement to provide public service announcements? If a public consumer advocacy group came in and made a case that people who can’t afford access to broadband connections have Apple as their only access to the Internet, you could see some really strange rulemaking as the FCC tries to apply what’s effectively early 20th Century regulations to an evolving technology base.”
Still, Apple’s move into streaming “is going to make the competitive space global, whereas it used to be local,” Jude said. We’re talking hypercompetition on a global level within the telecom space.” 
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