Apple squares up to the cable networks
NEW SUBSCRIPTION SERVICE RUMORED FOR 2015
The Apple TV digital media player has always had a slightly curious place in the Cupertino giant's hardware range. There has been such a device since 2007, and it is presently in its third generation - albeit, a generation that has not seen a significant update for three years. The microconsole has also long been likened to a "hobby" by Apple executives, and yet, bigger plans seem to be afoot - including a subscription service and possible 4K content.
There has been talk of Apple TV taking on a bigger role within the company for many years now, but there had been few stirrings in terms of actual announcements until, at the firm's most recent March 9 keynote, a price drop from $99 to $69 was confirmed. As insignificant a move as it may seem in the grand scheme of things, it has simply been the trigger for further speculation about the future of this forgotten child of the Apple family of products.
Despite the Apple TV never being a strong seller, the firm has continued to support it, and indeed, the last few years have seen evidence that it will soon be going up in the world, considerable improvements having been made to its hardware and content. Buy an Apple TV now, and you can already use it to watch more than 40 different channels, including HBO GO and Netflix.
WHISPERS OF A SUBSCRIPTION TV SERVICE
But with late former CEO Steve Jobs having been quoted in the past as having "finally cracked" television, as well as his successor Tim Cook admitting that it remained a field of "intense interest" for the company, many have wondered whether Apple TV will soon become more... much more. Such pondering has been further stoked by reports that the company is planning a limited, low-cost streaming service.
Various media sources - including The Wall Street Journal and The New York Times - have referred to talks apparently held between Apple and numerous "leading television groups", as the former looks to develop an Internet-based TV service that would be accessible through not just the Apple TV, but also the iPhone and iPad.
Anonymous "people briefed on the company's plans" are reported as claiming that the proposed service will be unveiled later this year and will offer a smaller and more affordable bundle of channels than is available through a typical cable subscription. These same sources cited networks owned by the television groups Disney, CBS, Discovery and Fox as possible providers of content for the new service. This means that viewers could be treated to the likes of CBS, ABC, Fox, ESPN and Discovery Channel, although the exact number of channels is yet to be confirmed.
THE CHANNELS AND PRICING THAT COULD SAVE OR SCUPPER APPLE TV
The Wall Street Journal's report suggested a lineup of 25 channels for the streaming service's initial rollout, but for those who might consider that a little on the light side, an article in The Journal provides some encouragement. It indicates that Apple is bidding to bulk up that offering through talks with both Discovery Channel and Viacom, so that it can offer such networks as Animal Planet, TLC, MTV, VH1, Nickelodeon and Comedy Central.
Naturally, a lot of the speculation about this subscription service has centered on pricing. One of the individuals mentioned in The Wall Street Journal's piece tipped a $20 to $25 monthly fee, while another daimed that it would be around $30. These sources suggested that the final price would depend on the aforementioned negotiations with television groups, as well as the exact channels offered.
Amid talk that even a $40 monthly subscription charge is not out of the question, one analyst has urged Apple to aim lower if it is not to price itself out of the market. In a note to investors that was shared with Applelnsider, Rod Hall of J.P. Morgan pointed out that Comcast offered both basic Internet and a cable television service for an incremental cost of lower than $40 per month, which would not make an Apple streaming-only service very attractive at the same price point.
PLUTO TV MIGHT POINT THE WAY AHEAD
There's certainly a lot for Apple to think about if it is to launch a successful subscription service of its own, which could launch as soon as September. Many eyes are on the company's Worldwide Developers Conference (WWDC) in June for the potential disclosure of further details.
A lot has been said, too, about the direction in which Apple TV could go with a streaming service like this - including 4K content. Unbeknown to most due to the lack of any announcement, the A8 chip in the iPhone 6 and iPhone 6 Plus has the ability to play back 4K ultra HD videos at 3840 x 2160 pixels, which isn't a feature shared by many of the other recent smartphone models.
What's more, the Wall Street billionaire with a significant stake in Apple, Carl Icahn, has previously written an open letter to Apple head honchos, urging them to get involved in the 4K TV market by about 2016. Further evidence that now is the time for a company like Apple to embrace 4K content comes in the emergence of Pluto TV, a startup that curates web-video content into channels akin to watching TV.
Pluto TV has been pressing ahead by signing distribution deals with AOL and Endemol Beyond USA. It also has its own Ultra HD channel and will be available on the NVIDIA Shield, a new Android TV powered 4K gaming console.
APPLE’S PLACE IN THE EVOLVING WORLD OF TV
In a recent blog post on the Stratechery website of the technology writer and consultant Ben Thompson, entitled The changing - and unchanging - structure of TV, he gave greater insight into these latest rumors about an Apple TV subscription service, suggesting how it might work and what it might mean for the wider world of TV.
He referred back to a previous pronouncement of his that "Cable TV is socialism that works; subscribers pay equally for everything, and watch only what they want, to the benefit of everyone. Any 'grand vision' Apple, or any other tech company, has for television is likely to sustain the current model, not disrupt it directly."
Thompson also outlined a series of factors that he said made Apple "a particularly attractive partner for content companies", including that the company was able to increase the addressable market by providing access to individuals, as well as that it was one of the few firms that had successfully convinced young people to pay for content. Thirdly, he added that the Cupertino firm was experienced in the management of the customer relationship.
He wrote: "I believe these factors explain why it is that HBO NOW is launching first with Apple: the people willing to pay for HBO are likely already using Apple devices, Apple can get them to pay, and Apple has the infrastructure to manage the relationship."
A STREAMING SERVICE WITH WIDE-RANGING BENEFITS
When one also considers the scope for such a subscription service to increase the attractiveness of the iPhone and Watch, it becomes clear just how profound the advantages could be across the Californian giant's ecosystem. Consumers will win, too, given the offer of superior integration with their devices, an improved user interface and Apple's already strong customer service offering.
It's almost like no one loses from such an arrangement - so is the Apple TV streaming service inevitable? It increasingly looks so, but we'll have to wait and see what happens in the months ahead. by Benjamin Kerry & Gavin Lcnaghan