Apple's subscription TV service predicted to cost below $40 to compete with cable providers
With Apple's anticipated subscription television service said to be targeting a price between $30 and $40 per month, one analyst has predicted that the company will come in on the low end of that range, or else risk pricing itself out of the market.
Rod Hall of J.P. Morgan issued a note to investors on Wednesday, a copy of which was provided to AppleInsider, in which he said a $40-per-month price tag for a subscription TV service would be too high.
In his view, the incremental cost of cable television service from a provider like Comcast, in addition to basic Internet, is less than $40 per month. And so if Apple were to exceed the price of a basic cable package, there would be very little reason for consumers to "cut the cord" and go with a streaming-only solution from Apple.
The rumored price range for the service was first reported on Monday by The Wall Street Journal, which said that Apple could launch the service as soon as September with prices ranging from $30 to $40 per month. At those prices, it would be more costly than the already-available Sling TV from Dish Network, priced at $20 per month.
A key factor in pricing, of course, is exactly what channels Apple's service would offer. Reports have suggested that Apple is in talks with broadcast networks ABC, CBS and Fox, as well as other cable networks owned by Viacom and Discovery, though apparently talks have stalled with Comcast-owned NBC.
But if other content owners forge a deal with Apple, Comcast could find itself forced to play along, based on the terms of the deal it reached with the U.S. Federal Communications Commission in 2011 to purchase NBCUniversal. The final judgment rules that Comcast must treat online video services as essentially equal to cable companies.
Beyond a subscription TV service, Hall has also predicted that Apple will launch new Apple TV hardware, potentially with the same A8X chip found in the iPad Air 2. He believes it would be accompanied by a new App Store for the Apple TV that would allow users to download games and other content, competing more directly with modern game consoles like the Xbox One and PlayStation 4.
Rod Hall of J.P. Morgan issued a note to investors on Wednesday, a copy of which was provided to AppleInsider, in which he said a $40-per-month price tag for a subscription TV service would be too high.
In his view, the incremental cost of cable television service from a provider like Comcast, in addition to basic Internet, is less than $40 per month. And so if Apple were to exceed the price of a basic cable package, there would be very little reason for consumers to "cut the cord" and go with a streaming-only solution from Apple.
The rumored price range for the service was first reported on Monday by The Wall Street Journal, which said that Apple could launch the service as soon as September with prices ranging from $30 to $40 per month. At those prices, it would be more costly than the already-available Sling TV from Dish Network, priced at $20 per month.
A key factor in pricing, of course, is exactly what channels Apple's service would offer. Reports have suggested that Apple is in talks with broadcast networks ABC, CBS and Fox, as well as other cable networks owned by Viacom and Discovery, though apparently talks have stalled with Comcast-owned NBC.
But if other content owners forge a deal with Apple, Comcast could find itself forced to play along, based on the terms of the deal it reached with the U.S. Federal Communications Commission in 2011 to purchase NBCUniversal. The final judgment rules that Comcast must treat online video services as essentially equal to cable companies.
Beyond a subscription TV service, Hall has also predicted that Apple will launch new Apple TV hardware, potentially with the same A8X chip found in the iPad Air 2. He believes it would be accompanied by a new App Store for the Apple TV that would allow users to download games and other content, competing more directly with modern game consoles like the Xbox One and PlayStation 4.
Comments
This sounds interesting and could be a game changer, depending upon which channels and what content is going to be available for it.
I still subscribe to cable, and I also have other online subscriptions like Netflix, but I look forward to seeing exactly what this Apple service will be offering.
Comcast and the corrupt politicians that let them get away with this need to be taken down.
Can't wait.
To me the WORST part about CableTV is the HORRIBLE cable boxes they give you. Most of them are POS and old as hell. Yet the still charge you $20 a month, EVERY MONTH per box. Also horrible is the user interface. Straight from the 1990's. So aweful.
With AppleTV that will end.
Things I'm looking forward to with AppleTV:
1. Cheaper. Pay $30 instead of $90
2. Better user interface.
3. Own your own equipment instead of paying $20 a month for POS crap
4. Better picture quality
5. Watch anywhere with iPad/iPhone (TimeWarner does not allow this)
But what about DVR? The ultimate is if you don't need a DVR and you can simply stream shows from the past few days.
You mentioned Time Warner, so I assume that that's what you use. I'm also on Time Warner.
If you want a brand new cable box, just take your old box to a Time Warner store and exchange it for a new one, it doesn't cost anything. I've done that a few times already with my boxes. The new box that I have allows it to be controlled by my iOS devices. It's much better than using their horrible remote.
They are bad. I think I've had this discussion several times with [@]mstone[/@] over the years.
While I think unlimited should be standard for land connections, how on earth do you bump up on 300gb a month?? That's 10gb downloaded per day. I didn't realize it was possible to consume that much data.
While I think unlimited should be standard for land connections, how on earth do you bump up on 300gb a month?? That's 10gb downloaded per day. I didn't realize it was possible to consume that much data.
Streaming HD movies can eat up a bit of bandwidth.
And maybe somebody downloads Blu-Ray rips, that can be more than 10 GB for one movie.
Can't wait.
To me the WORST part about CableTV is the HORRIBLE cable boxes they give you. Most of them are POS and old as hell. Yet the still charge you $20 a month, EVERY MONTH per box. Also horrible is the user interface. Straight from the 1990's. So aweful.
With AppleTV that will end.
Things I'm looking forward to with AppleTV:
1. Cheaper. Pay $30 instead of $90
2. Better user interface.
3. Own your own equipment instead of paying $20 a month for POS crap
4. Better picture quality
5. Watch anywhere with iPad/iPhone (TimeWarner does not allow this)
But what about DVR? The ultimate is if you don't need a DVR and you can simply stream shows from the past few days.
Unfortunately, streaming does not typically let you skip through the commercials like a DVR does. There are other benefits to a DVR as well. I can watch recorded TV if my cable internet happens to go down. The pause, fast forward and rewind functions are instant and much more responsive.
Last year when everybody at home started to use Netflix the data usage went through the roof. I have Comcast and due to the data cap I had to cancel Netflix. I would really like to use Apple's new offering but I am afraid that I won't be able to afford the overage charges for data.
I don't. I use an over the air antenna and I just have comcast for internet.
1. Cheaper. Pay $30 instead of $90
For $30, we should expect $30 worth of programming. A fair assumption as online video must be treated equal to cable companies.
If the service doesn't offer at least everything a DVR does, then what's the point of paying so much just to be trapped in a different hell?
While I think unlimited should be standard for land connections, how on earth do you bump up on 300gb a month?? That's 10gb downloaded per day. I didn't realize it was possible to consume that much data.
There are 4 people in my family and I work from home. That is only 2,500 MB a day each. Everyone has one computer and one laptop running both Windows and Mac OS X, and everyone one has or more handheld devices. Just the operating system updates alone put a huge dent in the 300 GB number. We literally watch no more than one or two movies a month through Apple TV. The rest of the bandwidth are game updates, new games, audio and video streaming (like YouTube for example -not full fledged sit down and watch TV streaming). With 4 tech savvy people it is a constant struggle. There is no way we could add streaming TV to that. Not even close.
Can't wait.
To me the WORST part about CableTV is the HORRIBLE cable boxes they give you. Most of them are POS and old as hell. Yet the still charge you $20 a month, EVERY MONTH per box. Also horrible is the user interface. Straight from the 1990's. So aweful.
With AppleTV that will end.
Things I'm looking forward to with AppleTV:
1. Cheaper. Pay $30 instead of $90
2. Better user interface.
3. Own your own equipment instead of paying $20 a month for POS crap
4. Better picture quality
5. Watch anywhere with iPad/iPhone (TimeWarner does not allow this)
But what about DVR? The ultimate is if you don't need a DVR and you can simply stream shows from the past few days.
Here is a pricing option. $30/month for the package in HDTV. $40 for the package in 4k.
The thing that I'm really waiting to see is how well it will support "flipping" through channels. Right now the Apple TV is designed assuming that you know what you want to watch and you navigate down to wherever you need to get to watch that content. It's the exact opposite of the way most people watch TV.
Also, the big problem that no one has seemed to have solved yet is how to manage all these separate inputs with one box. If I'm watching TV for example and want to switch over to the Apple TV it still takes me two remotes to do it (and yes, one of them is a smart remote otherwise it would take three remotes!)
So...
- What will happen to existing Apple TV? Discontinued this year? Still offered as a lower tier device? I say the latter.
- Will there be a new Apple TV this year? Will it have DVR capability as an option? I say yes to both.
- Will broadband providers revise their plans to more strictly cap data speed/amount, i.e. complicate with pricing tiers? Probably yes.
Paying so much? The average cable plan with HD-DVR boxes is close to $100.
How is paying $30 the same hell as paying $100?
Apple will figure out something with DVR. Its not rocket science. DVR has been around for ages.
I pay around $120 for cable, land line, and internet. Standard Triple Play discount. If I cancel cable part, then internet alone jumps up to $60 or more. Add that to your $30 AppleTV bill….
So...
- What will happen to existing Apple TV? Discontinued this year? Still offered as a lower tier device? I say the latter.
- Will there be a new Apple TV this year? Will it have DVR capability as an option? I say yes to both.
- Will broadband providers revise their plans to more strictly cap data speed/amount, i.e. complicate with pricing tiers? Probably yes.
Apple TV will never have DVR capability. Ever. From Apple's point of view why would you ever want to mess around with recording schedules and culling repeats and all kinds of other hassles when you can just on-demand watch the episode that you want from the cloud? Other than possibly pausing live-tv it's unnecessary.