Early last year Bloomberg surfaced a rumor that Apple was in talks with Time Warner Cable to bring the pay TV provider’s experience to the Apple TV box. Though nothing came of the purported talks, it looks like pay television – of a sort – could be coming to Apple TV after all. Will it happen this time, and if it does what could this service look like?
The Wall Street Journal reports Apple is in talks with TV programmers including ABC, CBS and Fox, to bring 25 channels together into a TV service. The price range is rumored to be $30 to $40 a month, and the company is looking for a September release date.
Is there any reason to believe the rumors this time? The recent release of Sling TV shows that content providers are interested in a different formulation of pay TV services that includes a much skinnier bundle of channels. If companies like Disney are willing to do a deal with Dish, there’s no reason to believe they would shy away from a similar agreement with Apple.
The market has also shifted significantly in the year since the Bloomberg/TWC rumor. A host of TV channels have launched their own apps within the bounds of the pay TV ecosystem, like HBO GO and Showtime Anytime. Recently, some traditional TV providers have decided to go it alone online with standalone services. Most notably, HBO Now will launch on Apple TV next month for $15 a month.
Before he died, Steve Jobs intimated that Apple had made a major breakthrough with TV. And so it seems likely that Apple will finally get its shot at “reinventing the TV experience.” What can we expect from an Apple TV box that actually includes live television channels?
Perhaps we should start with what isn’t likely to happen. Don’t look for full DVR-like functionality for the major channels. Sling TV couldn’t get the rights to do it and I doubt Apple will either. As well, it’s unlikely we’ll see a massive on-demand library. That would compete with Apple’s own pay-per-view and show sales business through iTunes. It would also conflict with CBS All Access, which offers a large library of on-demand content as part of the enticement to sign up for the $5.99 a month service.
CBS and ABC are already bringing local affiliate channels to the All Access and Watch ABC apps, but they have not reached agreement with all affiliates. Many areas cannot receive their local broadcast channel through the app. The Apple service will likely suffer a similar problem making it very difficult for consumers to figure out exactly what channels they can and cannot get.
Areas where Apple will innovate include the guide interface, recommendations, search and the ability to link to on-demand assets in iTunes. Expect the service to be tightly intertwined with the Apple ecosystem.
Recently Apple cut the price of the Apple TV box to $69, leading to speculation that the company is clearing inventory in preparation for the launch of new hardware in the fall. This is sorely needed as the media player is behind major competitors in features and functions. The September target for the TV service sounds like a nice fit with that timetable. And new hardware would allow Apple to really go to town with features like Siri integration and gesture support.
Apple’s TV service will be entering a crowded online television market. And at $30 to $40 for 25 channels, it already sounds pricey. Sling TV announced it will add another 4 channels (including A&E and History) to the base $20 package, bringing the number available to 22. However, Apple has been able to command a premium for many of its products and services. The question is, will the reinvention of the experience be good enough to work that magic with television?
Why it matters
The rumor that Apple is readying a 25 channel TV services for release in September seems credible given the current market conditions.
Steve Jobs claimed Apple had “cracked” the TV experience: this will be the company’s chance to prove it.
License restrictions on DVR and on-demand content is liable to make the service rooted in live television.
The rumored price point of $30-$40 also sounds too high versus existing competitors like Sling TV.