Monday, November 9, 2009

Will Apple lower my cable bill?

For many years now, I've been looking forward to the day when I could completely disconnect from cable or satellite television providers and get all the movies and series I want delivered to my TV through the internet. There are several entities out there that want to make that happen. Leading the pack are Apple and Netflix. But there are also Amazon and Hulu and Boxee, and who knows what else?


The concept is simple. I should be able to save money by trimming the fat. For the last several years, I've been paying around $100 a month for access to some 400 TV channels. The thing is, I don't watch 400 channels. I set my channel guide to about 20 favorite stations, and rarely have reason to venture outside that range. Of course, those 20 channels are never packaged together in a low cost tier; so I have to keep adding tiers to get everything I want, which leaves me with 380 channels I'll never touch.

So the rumor that Apple is meeting with network executives to discuss a $30/month subscription-based, iTunes-powered TV service comes as welcome news to me. It also makes me extremely skeptical.

That $30 price point sounds too good to be true. Which means it is. I anticipate one of three things happening: 1) the actual cost will end up being higher; 2) the available content will be severely limited; or 3) Apple has no intention of completely replacing your cable/satellite. Any of these possibilities falls short of the ideal scenario where one could save money by trimming the fat.

The problem with rumors, of course, is that they offer so little detail. How would this whole thing work? Would it be instant streaming, along the lines of Netflix and Hulu? Or would it be file downloads, allowing for mobile viewing on iPhones? Would there be limits on the amount of hours you could view per month (a method Netflix originally implemented, then later dropped)?

Reliability would be an important issue. Would every episode of every show be available always, or would older episodes and/or series get dropped with no warning or explanation (another common occurrence on Netflix)?


How would it interface with your TV? According to the rumor, this service would not be tethered to the Apple TV, which makes it sound like it would be just another Hulu: great for when you're at your computer, but complicated to rig to your TV. As tech commentator Alex Lindsay points out, the newest iMacs come with a 27-inch display, which is larger than the average TV was 20 years ago. Apple may be positioning itself as a manufacturer of TVs that just happen to have computers inside of them.

If it is indeed Apple's intention to compete with cable and satellite TV services, then they shouldn't introduce this service without offering everything -- or at least damn near everything -- that those services provide. (I would be particularly impressed if they were able to get HBO and Showtime to cooperate.) Only by offering everything could they entice a sizable subscribership away from cable and satellite. Otherwise, they're asking people to pay an extra $30/month for what can only be a supplemental service. I wouldn't pay for that from Apple, and I wouldn't pay for it from Hulu either.

4 comments :

  1. Funny how you slid that last link in there at the very end....but if Hulu starts charging, I will set myself on fire.

    I get the impression that no one has really figured out how to make money off online content yet. I read that the South Park guys basically break even off their site, and you gotta believe Hulu isn't making dick...since they are about to start charging.

    I think the Itunes model is what cable TV will eventually morph into...sort of an a la carte of entertainment. Works for me, since I watch, like, 3 tv shows...one of which is on the verge of getting canceled every year.

    good read

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  2. To my knowledge, none of the sites that offer legal, streaming TV shows are making any money. If the ad-supported broadcasting method were to break down for any reason, there would not be enough money to produce any of the shows we watch. The way TV shows are currently streamed via the internet is adequate for now, but definitely has a lot of evolving to do before it can become a sustainable, independent system.

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  3. Ultimately, I think the whole entertainment industry is about to go bankrupt. The first of the titans to go will be radio, and that can only lead to movies. I guess that's the reason I have a hard time paying for something like Paranormal Activity. Film to profit, etc, will lower the costs of movies, and most people are downloading movies illegally these days anyways. You have companies like redbox that don't partake in profit sharing, which is going to put that under, being that you have to pay for rights to profit off viewings of films... That's why On Demand charges five to 10 dollars per title.

    There's really no money in it to be made anymore, because the people that started that technology gave it away for nothing, and it exists so massively to the point where it just has to be accepted. There is a part of me to that thinks about downloading illegal versions of movies just so I don't have to sit through 4 languages telling me that I'm not supposed to make illegal copies of stuff, that the oppinions expressed are that of the speaker, and that smoking is bad and gays are good and to not discriminate and that the environment is dying, and that Megan Fox has a new movie that I should care about. The fall of retail chains is also affecting the home video market, which surpasses theatrical profits according to video business magazine, and the video industry is hurting.

    I believe the next possible step is either a. studios make less movies and those will be sure bets, which is good for consumers, because let's face it, there are too many so called stars, that just aren't that talented apart from looking reasonably attractive. See Megan Fox or b. continue on the trend of making mediocre product that is vast and industrialized to the point of not caring.

    Then you get to television... Television is something that is going to change dramatically. The realities of the economy is going to affect advertising, which is going to be affect shows budgets, which is going to affect networks. There will be less channels, since the reality is most people only regularly watch about 10-15 channels, and look at a maximum of 30-35. I will never watch the golf channel, or the lifetime movies channel, or the wedding channel, and I watch less channels and television then the average. I would be happy with a movies, news, network, educational package. And have my guide only show me those channels, so I don't have to go through pages of crap to find out if I want to watch history channel or something on IFC.

    This is essentially the problem of the whole marketplace and economy. There are so many options that we've become predictable demograohics that have become so specialized that's it's impossible to make a profit. As soon as we start limiting choices and shrinking the marketplace, the economy can grow again. Is that a good thing? I'm not telling.

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  4. "There's really no money in it to be made anymore, because the people that started that technology gave it away for nothing, and it exists so massively to the point where it just has to be accepted."

    That's what everyone said about music, too. Then iTunes came around, and suddenly people were willing to pay a dollar per song. Now newspaper web sites are starting to shift toward charging as well, and early signs indicate it's working.

    My hope is that TV and movies will follow a similar route to music. We need to be able to import the DVDs we already own at no additional cost. Once people have all the DVDs they already own on their computer, they'll probably be willing to buy download movies from that point forward.

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