Apple pitches $30 a month iTunes TV subscriptions - report

[AppleInsider]

Apple has reportedly reached out to TV networks in recent weeks with a proposed $30-per-month subscription plan to deliver content via iTunes -- a service it hopes to launch in early 2010.

Citing multiple sources, Peter Kafka at MediaMemo said Apple's subscription proposal is not based on any specific piece of hardware, like the Apple TV or forthcoming tablet. Rather, the plan would stick with the existing iTunes desktop software.

"Apple has told industry executives it wants to launch the service early next year," the report said, "but I have yet to hear of a single programmer that has made a firm commitment to the company, which has tasked iTunes boss Eddy Cue with promoting the idea."

If anyone does bite, the first expected is Disney, of which Apple co-founder Steve Jobs is the largest shareholder. Disney was the first to allow its content on iTunes and saw tremendous early success.

Kafka said that industry executives are "intrigued" by the prospect of a subscription plan on iTunes, as they are looking for new revenue streams as advertising returns diminish. However, cable networks are concerned about sacrificing existing relationships with providers like Comcast, and all content providers are worried that advertising revenue could decrease if live viewership shrinks.

"So Apple's proposed subscription service, which the company has floated in the past, is no longer a huge stretch," the report said. "Says one executive briefed on the company’s plans: 'I think they might get it right this time.'"

Apple has been long rumored to provide a subscription option for TV content. In August, Gene Munster, senior research analyst with Piper Jaffray, said he believes that Apple would release a new Apple TV in conjunction with a subscription TV account. But the agreements necessary to offer a subscription service would take some time.

"Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 or $40 per month)," Munster writes. "Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels."

Last week, the Apple TV software was updated to version 3.0. Improvements included a newly redesigned interface, support for iTunes Extras and iTunes LP, and streaming Internet radio.

[ View this article at AppleInsider.com ]

[anantksundaram]

No way. Apple will not get into the subscription business. They did not go the MVNO route with the iPhone when they could have, and they won't do it here.

In any event, I doubt that NBC - which will be owned by Comcast - will sign on.

[ascii]

If you had access to *all* the TV shows on iTunes for that price it might be worth it.

[bloggerblog]

YES!!!! Oh that will be great!

[tumme-totte]

I would take it ASAP. I'm in Sweden though and here Apple really need to accelerate if they want to take a seat worth defending in the long run!!!

[brucep]

Originally Posted by anantksundaram

No way. Apple will not get into the subscription business. They did not go the MVNO route with the iPhone when they could have, and they won't do it here.

In any event, I doubt that NBC - which will be owned by Comcast - will sign on.

MVNO WILL be for the nano phone .
and what does mvno have to do with TV service ??
I thought it was a phone carrier billing SW .

peace
9

[jpellino]

My SD TIVO I lifetime was fun while it lasted. if Apple does HD on this I'll be intrigued, though I'd have to pay cable more for internet w/o TV.

[512ke]

I doubt the networks will go for it unless the shows include commercials. They just found out that people who Tivo still watch almost half of the commercials. It's the major revenue stream worth a lot more than $30/month.

And if there are going to commercials, then why pay for what you can get for free simply by clicking on Hulu.com etc?

I don't see the business model for this personally.

[bdkennedy1]

I don't understand this at all. Why would I pay $30 a month for something I can get for free? I can go to Hulu.com and watch hundreds of TV shows for free.

[Cory Bauer]

At $30, I only see this being an attractive offer if the selection isn't limited to only certain shows, and can be streamed instantly in both iTunes and on Apple TV (as opposed to having to download the entire episode in HD and SD first — annoying). If Apple was smart, they'd be working to include iTunes streaming on other manufacturers' televisions, set top boxes and game consoles in the same fashion that Netflix and Blockbuster streaming is finding it's way into all of those devices. They're going to get nowhere fast if they keep trying to sell everyone an $230 Apple TV.

[Muncie]

Apple: Add Fox Soccer Channel and include in the monthly subscription. Then we'll be getting somewhere.

[YodaMac]

Wow! Apple has just so many hurdles and entrenched "interests" to overcome to make this a reality. I'll happily believe it when I see it, though.

[solipsism]

Originally Posted by anantksundaram

No way. Apple will not get into the subscription business. They did not go the MVNO route with the iPhone when they could have, and they won't do it here.

In any event, I doubt that NBC - which will be owned by Comcast - will sign on.

I can’t say I see a comparison between the two. I think a subscription model for TV rentals is long overdue.

[saarek]

All I want is unlimited movie rentals for a set fee, I spend £15 (around $40) a month renting in DVD's from Lovefilm.com, I'd buy an Apple TV if they set this up.

[paxman]

Originally Posted by anantksundaram

No way. Apple will not get into the subscription business. They did not go the MVNO route with the iPhone when they could have, and they won't do it here.

In any event, I doubt that NBC - which will be owned by Comcast - will sign on.

I wouldn't be so sure - the subscription model is pretty much all people know when it comes to TV programming. I don't think Apple's resistance to the subscription model in other areas will have any effect on a TV deal. Personally I like the idea of owning my music but I will never own movies or TV programming. Because of the way Television programming works the subscription model makes perfect sense. We all love the 'weekly instalment' of whatever programmes we enjoy and this also ensures Network loyalty for the networks.

For movies I think the 'Buy' model is ridiculous. I know some people like owning and re-visiting their movies but I think (apart from kids) they are the exception.

The competition in this instance will be against the existing cable / sat providers who are not going to be very happy. For Apple the attraction is ATV sales and god knows what other kind of hardware that could follow a succesful launch of such a service.

[gkarris]

Originally Posted by ascii

If you had access to *all* the TV shows on iTunes for that price it might be worth it.

yes...

$30-$40/month for access to a bunch of old shows is sort of a joke... especially if you can get entire seasons of shows on DVD for closeout prices of $13-$20 each...

[dannhasnojetpack]

I'd only be down if i could get all iTunes content with the plan. It's all or nothing for me, and I have a feeling I'm not the only one that feels this way

[cmf2]

If this is supposed to replace my cable, I need live streaming for my hockey and football games and must watch tv shows (as opposed to time delayed streams, like the current delay on the availability of tv show downloads). I don't think this will be the complete solution I would need. Of course I will wait and see if anything comes of this.

[joe in miami]

Something similar to Sirius - $14.99/month including movies, new and old, HD, watch anywhere (TV, iPod, iPhone). Add iTunes Music for only $4.99 extra month. $19.99 for the whole iTunes library.

[Postulant]

Originally Posted by saarek

All I want is unlimited movie rentals for a set fee, I spend £15 (around $40) a month renting in DVD's from Lovefilm.com, I'd buy an Apple TV if they set this up.

Yep, count me in. Unlimited movie rentals would be sweet.

[cmf2]

Originally Posted by joe in miami

Something similar to Sirius - $14.99/month including movies, new and old, HD, watch anywhere (TV, iPod, iPhone). Add iTunes Music for only $4.99 extra month. $19.99 for the whole iTunes library.

And your justification for such a plan would be?

[YodaMac]

Originally Posted by gkarris

yes...

$30-$40/month for access to a bunch of old shows is sort of a joke... especially if you can get entire seasons of shows on DVD for closeout prices of $13-$20 each...

uh... $20 per season on DVD sure adds up to a lot MORE than $40 pretty quick. Plus the whole reason I don't purchase TV shows on iTunes now is that... I don't want to OWN them, just watch them once. Same with the DVD's - I don't want to OWN them.

I'd love it if iTunes would even just allow TV series rentals - instead of purchases. I'd take that over a monthly subscription if the fee was nominal.

[walshbj]

Hulu is not the same as having a download for your apple tv or iPod. Plenty of non techies don't want to watch on hulu, they want seamless viewing in the living room. Last time I looked at boxee for atv it wasn't ready for people who don't have time to mess around.
I'm willing to pay for convenience and flexibility.

[YodaMac]

Originally Posted by walshbj

Hulu is not the same as having a download for your apple tv or iPod. Plenty of non techies don't want to watch on hulu, they want seamless viewing in the living room. Last time I looked at boxee for atv it wasn't ready for people who don't have time to mess around.
I'm willing to pay for convenience and flexibility.

Agreed. I do not want to watch TV on my computer, but in my living room - or even "on the go" (iPhone).

[solipsism]

Originally Posted by walshbj

Hulu is not the same as having a download for your apple tv or iPod. Plenty of non techies don't want to watch on hulu, they want seamless viewing in the living room. Last time I looked at boxee for atv it wasn't ready for people who don't have time to mess around.
I'm willing to pay for convenience and flexibility.

Even for us “techies” Hulu on the AppleTV via Boxee is a poor experience. The machine is just too slow to run Flash with 480p video without issues. I think they still haven’t been able to get HW acceleration going, but maybe Flash 10 fixed that.

A cheaper and better way to go if you want Hulu in your living room (and are willing to deal with the quality) is an HTPC. Hulu makes an app for Windows, Linux and OS X with the 10-foot-interface guidelines. It’s still Flash-based, but it designed around a display and navigation with a remote.

• http://www.hulu.com/labs/hulu-desktop

[isaidso]

Originally Posted by paxman

I wouldn't be so sure - the subscription model is pretty much all people know when it comes to TV programming. I don't think Apple's resistance to the subscription model in other areas will have any effect on a TV deal. Personally I like the idea of owning my music but I will never own movies or TV programming. Because of the way Television programming works the subscription model makes perfect sense. We all love the 'weekly instalment' of whatever programmes we enjoy and this also ensures Network loyalty for the networks.

For movies I think the 'Buy' model is ridiculous. I know some people like owning and re-visiting their movies but I think (apart from kids) they are the exception.

The competition in this instance will be against the existing cable / sat providers who are not going to be very happy. For Apple the attraction is ATV sales and god knows what other kind of hardware that could follow a succesful launch of such a service.

On the nose about TV subscription model. It's the only thing that actually MAKES sense there.

[gkarris]

Originally Posted by YodaMac

uh... $20 per season on DVD sure adds up to a lot MORE than $40 pretty quick. Plus the whole reason I don't purchase TV shows on iTunes now is that... I don't want to OWN them, just watch them once. Same with the DVD's - I don't want to OWN them.

I'd love it if iTunes would even just allow TV series rentals - instead of purchases. I'd take that over a monthly subscription if the fee was nominal.

My point was for those of us who would rather own, it's cheaper just to buy them...

I would like Apple to offer TV show rentals for, say, 49 cents each...

[Jackhead]

Originally Posted by YodaMac

Agreed. I do not want to watch TV on my computer, but in my living room - or even "on the go" (iPhone).

Maybe on a 'tablet' device?...

[joe in miami]

Originally Posted by cmf2

And your justification for such a plan would be?

Price elasticity. The lower the price, the more buyers. At minimum, they should consider tiered pricing. If you download 50 items, you should pay more than those that download 5 items.

Hulu offers a lot of free content, (but you have to watch it on your computer), Netflix offers downloads via XBOX with an $8.00/month subscription, You Tube etc, etc, etc. I use DVR to watch my two or three shows that I have an interest in.

I will not give up satellite HDTV because I need local, sports, disney, Nick, Animal Planet, History, etc, etc. I have 3 kids, different ages, different preferences, many that are not on iTunes.

To add another $30 bucks for TV reruns (no new releases) is too much, IMO.

[hillstones]

Originally Posted by YodaMac

uh... $20 per season on DVD sure adds up to a lot MORE than $40 pretty quick. Plus the whole reason I don't purchase TV shows on iTunes now is that... I don't want to OWN them, just watch them once. Same with the DVD's - I don't want to OWN them.

I'd love it if iTunes would even just allow TV series rentals - instead of purchases. I'd take that over a monthly subscription if the fee was nominal.

Didn't you already watch the TV show when it originally aired? Why would you pay for a subscription for something you already watched once? If you miss the show, watch it online for free (Hulu, etc).

The iTunes TV content doesn't cover everything that is broadcast on cable/satellite/OTA. So why would anyone spend money on iTunes TV content when almost everyone already has either Cable, satellite, or over the air broadcasting? And no one is giving up their service provider to lose access to all the sports programming that iTunes will never have live.

[hillstones]

Originally Posted by joe in miami

Hulu offers a lot of free content, (but you have to watch it on your computer), Netflix offers downloads via XBOX with an $8.00/month subscription, You Tube etc, etc, etc. I use DVR to watch my two or three shows that I have an interest in.

I will not give up satellite HDTV because I need local, sports, disney, Nick, Animal Planet, History, etc, etc. I have 3 kids, different ages, different preferences, many that are not on iTunes.

To add another $30 bucks for TV reruns (no new releases) is too much, IMO.

Well said! Hulu is great if you happen to miss one episode. I don't mind catching one show on Hulu on the computer, but I am not watching an entire season on the computer.

Families will never give up their service provider because iTunes is too limiting in content (not Apple's fault of course). TiVo HD now offers Netflix, Amazon OnDemand, and Blockbuster for pay per view movies and TV, in addition to your live TV broadcasting from cable. No one will give up their local and sports programming for an iTunes subscription.

[brucep]

Originally Posted by bdkennedy1

I don't understand this at all. Why would I pay $30 a month for something I can get for free? I can go to Hulu.com and watch hundreds of TV shows for free.

ditto

HUlU
and all the networks them selves offfer tons of free stuff
the ABC network player is very nice .

maybe this service would include movies and music ???

i really don't understand this at all .

where'd i put my nano phone ??

[Jerry602]

Even the current TV show pricing model makes sense to replace your cable (I did). I was paying over $80/month for digital cable plus DVR. I finally figured out that I was not watching enough shows to justify the cost. Buying TV shows on Apple TV is only $2/show (and a little less if you buy a season pass)...for that $80 I was paying I can actually buy up to 40 shows a month and the cost is a wash. No need for DVR if you can watch the show on demand. I don't watch nearly that many, and actually when it came down to it I only have about 3-4 show subscriptions at a time which costs me more like $30/month. I also watched CNN and network news, but those shows are free on Apple TV video podcasts...and are easier to watch because you can watch them whenever you want (Anderson cooper 360, nightline, etc.) and with a DVR I was not usually recording them. Overall these things are worth it for many, and may not be worth it for people who watch enormous amounts of TV...but it seems like nearly every type of show is available on Apple TV right now, even discovery channel shows and whatnot.

[cmf2]

Originally Posted by joe in miami

Price elasticity. The lower the price, the more buyers. At minimum, they should consider tiered pricing. If you download 50 items, you should pay more than those that download 5 items.

Hulu offers a lot of free content, (but you have to watch it on your computer), Netflix offers downloads via XBOX with an $8.00/month subscription, You Tube etc, etc, etc. I use DVR to watch my two or three shows that I have an interest in.

I will not give up satellite HDTV because I need local, sports, disney, Nick, Animal Planet, History, etc, etc. I have 3 kids, different ages, different preferences, many that are not on iTunes.

To add another $30 bucks for TV reruns (no new releases) is too much, IMO.

You've made several assumptions, including the lack of live streaming and content limited to the current iTunes library. With that in mind, I might be inclined to agree with you. But if that is the case, I would see little value in it at all. I don't think this can work as a supplement to cable, at least it won't work for me.

[filburt]

Agreed. $30 is way too high, especially when you consider that many high-speed ISP in the US have monthly data transfer cap.

Whether Apple likes it or not, subscription TV service will be competing with Hulu and Netflix Watch Instantly. It must be competitive or risk not getting any traction.

For $30/month, it must provide access to just about every recently aired TV shows, from network channels (e.g., CBS, ABC), basic cable (e.g., Comedy Central), and premium channels (e.g., HBO). Even better, it should provide tiered pricing, say $10/month for network, $20 for network and cable, and $30 for everything. Throw in n-number of free movie rentals a month, as well as free HD for all, you may have something.

[Kolchak]

If only the cable and satellite companies would provide a la carte service, we wouldn't need services like this. Now if they can get shows from National Geographic Channel, History Channel, Discovery and Science Channel, I'd ditch my $60/mo DirecTV in a heartbeat.

[Anya]

Originally Posted by tumme-totte

I would take it ASAP. I'm in Sweden though and here Apple really need to accelerate if they want to take a seat worth defending in the long run!!!

Sadly, not only in Sweden.

[BenRoethig]

If they think this will replace your cable bill, they're completely out of touch. Complement maybe. This is basically a commercial free Hulu. It would be certainly more attractive if came with a number of complementary downloads. Right now, I'd place this (rumor) in the same category in as the ATV itself, oh so close, but Apple's going about based on a misunderstanding about what the consumer wants.

[bobrk]

Too high. I get Netflix for $15.

[cmf2]

Originally Posted by BenRoethig

If they think this will replace your cable bill, they're completely out of touch. Complement maybe. This is basically a commercial free Hulu. It would be certainly more attractive if came with a number of complementary downloads. Right now, I'd place this (rumor) in the same category in as the ATV itself, oh so close, but Apple's going about based on a misunderstanding about what the consumer wants.

I don't think we have enough information to make statements like that. I doubt that Apple will simply be adding a "watch now" option to their TV shows and charging $30 a month for it. Although I have my doubts that it will be a full cable replacement as well. At this point we have no idea what Apple plans to do with a streaming service.