Apple TV service looks less like a cord-cutting alternative, than simply another cord
With a small channel line-up, and a price point rumored to be dangerously close to entry level cable packages, the service may have limited appeal
The tech sites are twitter pated over the idea that Apple will launch a paid TV service this fall. According to the WSJ the service would launch with around 25 stations and be priced at $30 to $40 a month.
That cable companies like Comcast offer entry level packages at $49.99 a month (with 140 channels) means that Apple’s rumored service is less a real alternative to cable as a lower priced cable option. Adding in a subscription to HBO and suddenly Apple’s service starts to look priced like everyone else’s.
“The company is aiming to announce its new service in June and launch it in September, according to people familiar with the matter. The service would work across all devices powered by Apple’s iOS operating system, including iPhones, iPads and Apple TV set-top boxes,” the WSJ story (with three bylines) said yesterday.
For real cord-cutters, the real aim is not just to pay less for television, but to avoid much of the content which is inane.
But for years now the rumor was that Apple would launch something dramatic in the area of television. Walter Isaacson’s biography was clear that Steve Jobs felt he had “finally cracked it.”
“I’d like to create an integrated television set that is completely easy to use,’ Jobs told Isaacson. “It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it.”
But over the years the Apple TV has stayed pretty much unchanged since the hockey puck model now available was introduced in September 2010. In fact, if anything Apple has shown very little commitment to the product. Even at the Apple Watch event, where CEO Tim Cook announced that HBO would be available through Apple, the company did not introduce a new model, it simply dropped the price. It has been over two years since the device received any hardware updating. (The Apple TV 3rd generation was released in 2012, but in 2013 a minor update was issued.)
One should state the obvious, however, one shouldn’t diss a new service immediately – especially one not even officially announced, much less launched.
OK, but having said that, do you really look forward to a $40 TV service with two dozen channels? It sounds very much like a TV with rabbit ears that can receive UHF channels (are you old enough to remember that?).
My biggest problem with the idea of a true Apple TV offering is quality. As an early Apple TV adopter, the device has become one of the most important entertainment devices in my house. But it is also remains very frustrating. Despite exceptionally high broadband speeds (over 120 Mbps) I constantly find it hard to steam Apple movie trailers, always waiting minutes before they begin to play. Netflix, on the other hand, is fine. In other words, Apple still struggles with streaming. What part of the streaming of programming would they be responsible for? If any part, then I’m not interested.
The best argument I’ve heard so far for a new Apple TV service is that it actually wouldn’t be tied to your Apple TV device, but be available across devices. That’s true, but most cable companies are already moving in this direction, and likely by the time of any launch would already have written into their contracts that streaming to devices is part of the basic retransmission agreement.
Television in the U.S. is very reminiscent of the old airlines business: expensive, with limited choices, but profitable for the airlines. (Cable offers many channels, but often not the ones consumers often request like the BBC or Al Jazeera.)
Likewise, for the networks and the cable companies today’s market is very profitable, but increasingly under threat. That is why HBO’s move is so courageous: they are betting that the system will fall apart and they need to be ready to profit in a world of cord-cutters and streamers. But the networks will not be likely to agree to adding their content to Apple’s service without compensation in line with what they get from Comcast and Time Warner – that is why Apple is rumored to be pricing their limited service at levels that don’t sound like much of a bargain.
Apple may surprise observers and come in at a much lower price point, say $19.99. It would actually be consistent with Apple’s philosophy of using media to drive hardware sales. Apple certainly has the bankroll necessary to do this, and still pay the networks. But Apple likes to enter businesses that offer high margins. TV doesn’t sound like such a business based on the current set of rumors.