Apple HDTV could cost cable more than 10% of customers

“Over the next 12 months, as much as 10 percent of U.S. households could cancel their cable or satellite TV, based on the popularity of Netflix and other streaming services, according to the latest surveys from the Consumer Electronics Association (CEA) and Credit Suisse,” John Melloy reports for CNBC.

“If a rumored Apple-made HDTV is released, pay-TV subscription losses could be even greater if the company offers a la carte pricing, allowing consumers to individually purchase shows, or entire series or channels, investors said,” Melloy reports. “An Apple flat panel, speculated about in the blogosphere for a while now, gained a bit of credence this week after a note from UBS technology analyst Maynard Um.”

Advertisement: Students, Parents and Faculty save up to $200 on a new Mac.

Melloy reports, “‘The first adopters will bite no matter what and for regular folks, Apple needs to demonstrate the value proposition of a la carte pricing (paying by channel or even by season of show),’ said Josh Brown, money manager and author of The Reformed Broker blog. ‘It may take a while or could be instantaneous like iPhone. Either way, if I were Comcast or Cablevision I’d be quaking.'”

Full article here.

[Attribution: USA Today. Thanks to MacDailyNews Reader “Edward W.” for the heads up.]

38 Comments

  1. makes no sense. You can already get an “apple HDTV” for $99 on top of the HDTV you already own. Why, again, would Apple get into such a crowded and low-margin business?

    1. The TV could become the center hub of all iDevices. It could handle the internet connection, create a wireless network, retrieve updates and content, store tons of movies and television shows, act as a DVR…

      1. This all could be done by existing or updated AppleTV.

        There is simply no way how Apple would release TV set with 40% margins (twice of the industry average) and have significant impact on the market — unless they would invent something beyond what AppleTV can do and thus justify higher prices. And such invention seem to be highly improbable to happen.

        And even more improbable is variant of Apple entering TV set business with AppleTV-like features with competitive prices. It is basically law at Apple that they can not do business with lower than 35-34% margins.

        For their media business, Apple has set 43% margin (iTunes Music Store, App Store, iBooks, et cetera: 70% of 100% is 43% margin).

        1. I would say it’s pretty obvious Apple would offer a product that’s superior to just Apple TV + Flat screen TV. As always, Apple’s version will be integrated, automated, and sleek.

          Have you seen the mess of Remote controls people have in their living rooms? Now imagine if Steve Jobs got rid of all but one of those…. How much would you pay for that?

          1. I might pay the premium, but for really wide approach this would not make big impact due to price.

            If Apple’s approach would be to release TV with AppleTV integrated, then it makes not sense that Apple did not do, for example, it last year already.

            My point is that either Apple will not release anything about TV sets, or they will release something more than just TV+AppleTV in one body. However, for now, there are no ideas what more than that combination Apple could offer.

  2. I’ve been cutting back and finding alternatives for a couple years now. Added an antenna, netflix, Torrents and cut cable. Unless this is the holy grail of content to price ratio I won’t bite. But, I surely hope Apple comes through with something that is.

    My other concern is that if we end up getting all content through the net, will our online cost rise to the point that it’s what we’re having to deal with now?

    1. i just moved from LA to NY & TWC here (had them in LA) is a whopping $40 more for the same exact service here! So I didn’t connect and got Clear for WiFi over 4G which surprisingly is pretty good. Never been down once I the 4 months I’ve had it. I miss some shows though and have been wondering if I get AppleTV box and may be just TWC Internet instead of Clear, might I be content and never get over priced cable TV again. Cable will hopefully find them in the same boat the record industry is in having ripped off their customers for decades. I used to work for several labels and was horrified about the obscene margins we were making off CDs that only cost $1.65 to make! Sorry to see my ex-industry and so many friends hurting but the labels overcharged and price fixed and as soon as an alternative became available (the Internet, bit torrents, etc.) it was over. Cable, satellite, FIOS and the studios are on the same path and the consumer is just waiting on the edge of their seats for a workable alternative. Why should anyone pay $100s of $ a month whether their TV is on or not? The greed will put them out of biz or close to it or certainly cause a major restructuring like the record industry. Too bad because we need a way for artists to be discovered, make a living and provide us great music. Sorry, this post was a bit all over the place.

      But back to point. So what are you using to connect to the net?

    2. Doing the same thing here. Cut back to basic basic cable, use the QAM tuner to get the HD Channels off the cable (they cannot filter out the hd channels) and apple tv / netflix based for most TV. Using cable for basic things and subscribe to several things like burn notice on usa network and mythbusters on discovery via iTunes store.

  3. as a cablevision customer it has always irked me that i had to pay for sports and junk that i never watch and that stuff i wanted was small parts of expensive packaging
    unfortunately you would still have to pay cable for basic connection to the internet but that would be better than watching “tin cup” or” Judge dredd” over and over and over (not to mention “waterboy”) PLUS the dolan’s treat their business like its a mom and pop candy store . customer service sucks and if i could take money out of their pockets and put it somewhere else I’m there!!

    1. In my view, à la carte model works better for music (and to certain extent movies maybe) than TV. You may think you don’t need the extra baggage of channels that no one watches, but I’m afraid if we go by popularity driven scene, many of us maybe left at mercy of Glee, Nascar, Cinemax etc. crowds (not that there’s anything wrong with them).

      I’m allergic, i.e., to ABC’s Desperate Housewives with those annoyingly comical sound effects now a trademark of Disney TV’s sense of cuteness (grates on my nerves really). However, that doesn’t mean others can’t/shouldn’t enjoy the exact same thing. I prefer Men of a Certain Age (one of the best shows on TV IMO), or Discovery Wings, NFL, cooking channels etc. However, because thanks to this à la carte model, many 16 years olds may not care for these shows, and suddenly these channels may lose funding.

      Sometimes it’s fun to just discover a strange show (or even lame) like a rerun of Family Feud, Judge Dredd or Travel Channel etc. on a passive delta state late at night. I’ve discovered so many good movies accidentally this way, ordinarily I wouldn’t even be aware of them. A la carte model might one day deny you from these unexpected gems of TV life.

      1. Your reasoning is exactly why à la carte was shelved for channel packaging originally. And it’s especially valid in these days of quarterly profit über alles.

        1. But “Channel Packaging” will be the reason I leave cable. I have cable now, not for myself, but for others and when they leave, cable is so out of here.

          @krquet says “A la carte model might one day deny you from these unexpected gems of TV life.” The word “rare” was left off in front of ‘gem’… ‘rare gems of TV life’… To which I say, let the shows producers advertise it like CNN advertises on Fox News or if a new sitcom, throw out a free episode, like on iTunes or let word of mouth do the trick.

          The only thing I’ve seen from my cable provider is rates go up, quality go down, content remains the same and no matter how many channels there are, I still seem to flip through them all and STILL nothing good is on!

          1. It may not be a bad thing when you find yourself no programs to watch. It means, you should turn off the TV and enjoy a nice walk in the park etc.

            The point I was trying to make is: if you opt for the pick and choose model, all of a sudden you may find the choices are shrunk (sex, titillation, violence and whatever American Idol loving teenage girls prefer); the majority likes à la Facebook will be crowned as the de facto winner. Personal tastes (simple, odd, elitist or quirky) will give way for the collective middle of the way average C graders. Gaussian zenith will dictate your TV viewing habit.

            In other words, you may never wake up from a Microsoft dominated world nightmare. Trust me, some may think à la carte is a chest thumping freedom call against socialist dictatorship, but it’s not. You want the whole gamut of experience, the good, the bad and the lame to appreciate the colours of your particular niche, just like in life as a Mac user.

        2. Well, I left cable over a year ago and haven’t looked back for a second… well maybe a second or two. I loved the cutting edge shows on HBO and Showtime, but to access them required my paying for channels that I would NEVER watch.

          Instead of a la carte, my model would be that you have access to ALL the channels, but you only pay for the time that your TV is turned on.

          If I turn off all the lights in my house for a week, the electrical company doesn’t make any money on me, likewise, the water company and the gas company.

          I’d be MORE willing to go to a la carte pricing for cable… they might even win me back as a customer, but the “pay for what you watch” model is an easy way for me to say YES!!

      2. Or, maybe when customers have the chance to pick and choose their programming, studios and networks will work harder at producing valuable content. They can start by getting rid of realty shows where 98% of them are just pap!

        I’ve been so over movies and the trash they put out. It’s been 4 years time between the last two movies I saw in an actual theater. I cancelled the yearly subscription to the paper for it’s pap and found out I don’t miss it at all. Now, I’m getting pretty much over cable. I wish there was a way, a service that allowed me to pick and choose the programs, news, sports and movies I like and let me pay for my selections and you can pay for yours and let the producers of such battle it out to produce the content that people will turn on, tune in and not drop out! Right Mr. O’Leary?!

        1. Now now, you’re spot on. For too long we’ve been force-fed every bit of junk that “writers” come up with, most of totally unoriginal regurgitations of themes and plots of long ago. Bring back the goodies like the original Alfred Hitchcock Show, which featured writers like Roald Dahl and Rod Serling.

          Reality shows sell to the lowest common denominator, to people who don’t want to exercise their brains by getting engrossed in a really well-plotted movie or show.

          In my case, my cable operator is also my ISP and land-line phone company so I can’t completely cut the cord. I do need my Internet connection.

          As for a la carte, I’ve been wishing and hoping for that for the last 40 years or so. Same with some way of signaling the advertisers that I’ve muted or switched channels whenever their really annoying ads come on (like how many people go out and buy their wives brand new Lexuses and park it in the driveway Xmas even? What wife won’t feel like she’s been bought when presented with such a gift? Sheer idiocy!)

      3. A-la-carte is the way to go. Parents pay for the TV. If parents decide that crap is not worth paying for, and instead decides to buy History Channel, Discovery, Science, etc. then that is what the 16 year old will indirectly “fund” and we will in fact see LESS mindless crap. If the kids grow up and get their own jobs, they can decide if they want to pay for the American Idol crap.

  4. I read our cable company is considering metering internet usage, my assumption is so they can charge more the more you use. I’m worried it will become too expensive to use Netflix and other services such as Apple choice TV. I would love to have the choice but so far I think the cable and dish companies have us locked in. Just as the wireless companies have gone to higher pricing for internet usage. One way or the other the consumer is going to pay HIGHER prices.

    1. Trust me, as cable TV subscriptions continue to nose dive, look for much, MUCH higher, metered internet services from the cable companies.

      We live in the USA where the only thing that matters is that the rich continue to get richer, and always at our expense.

      I can easily see a time where I do without internet at home. because of the pricing model service providers will invoke… probably sooner than later.

      1. if the internet becomes too expensive for the masses, i am sure hacked solutions will appear (such as “free” radio based networking using ham radio channels)

    1. Why do Canadians stand for this? Is there no movement to force Internet providers to provide uncapped access? I can’t believe Canada of all places would put up with this.

  5. It’s not really Apple who is doing it… IF they open up the AppleTV like they have the iPad and iPhone and companies start moving their iOS apps over to it like HBO Go, Hulu+, Vudu, ESPN3, then why not? You can already get NBA games, MLB games, Netflix movies and tv shows at an a la carte rate. I have hulu plus and I am waiting for it to wind up on appleTV.

    Right now none of these ipad apps work with fullscreen mirroring. That may change when iOS5 moves out of beta, who knows. Not to mention it would be easy for manufacturers to embed appleTV’s inside television sets.

  6. Whats up with Canada laws that limit bandwidth, it that limiting socialistic control from a socialistic leaning government or is it big biz capitalism taking advantage of the little guy? Opinions please from Canada residents.

    1. Well I notice that Verizon is also now starting to set limits on downloads. Here in Canada I pay for a service with a monthly limit of 125 GB of download/upload traffic.($60 per month) And over the limit it costs per GB of data. So netflix is fine but when you go over your limit it starts to add up.

  7. A la carte would be the ultimate choice for individuals. Would it work on a channel or program basis? I can see people paying for either but it could be expensive given what we pay for season passes on iTunes.

  8. Building the functions of the existing AppleTV into the display is a bad idea. The AppleTV and display need to remain separate so that the AppleTV can be upgraded with new capabilities without obsoleting the display.

    Anyone want to toss their 60 inch flatscreen in the trash in order to upgrade the processor or add more memory or add some other function that cost $10?

    Apple would make a monumental anti-green mistake to integrate the AppleTV into the display.

  9. What goes unnoticed a lot is that Apple is a champion for the little guy. Just like it did for musicians through iTunes, for software developers through the app store and authors through iBooks, Apple has allowed independent artists to self publish their works. If they do that for independent film and tv creators, it will create a whole new channel for them to distribute their work without having to go through the studio system. Bravo Apple!

  10. Trading a cable bill for higher Internet bill doesn’t sound like a deal to me.
    6 to one, half dozen the other.
    Have to wait and see what other benefits there will be.

  11. I would like to explain that as long as the shift is from video to streaming, cable rates will stay the same, only video prices will eventually go down as ISP prices go up, along with speed, so you will pay about the same rate regardless.
    This is because plant maintenance price is a constant, and revenue has to be adjusted to cover that.

    I would like to explain that à la carte is not offered by cable companies because broadcasters want to spread ad revenue out among as many channels as possible and require said channels in rebroadcast negotiations.

    I would like to explain that à la carte would not lower your rates substantially just as you do not get lower prices from a 7-11 as from a supermarket.

    I would also like to explain that as Hollywood loses revenue from less cable and satellite movie channels, streaming services such as NetFlix will continue to raise their rates to make up the difference to Hollywood.

    I would like to explain these things, along with how more competitive rates for video and internet access from more distributers is affecting the market, but that would kill all the fun.

    Besides, it’s been explained time and time again to (mostly) no avail.

  12. Hardly the catastrophe it’s being made out to be- people will at most cut back their cable to Internet-only. Heavy-duty broadband is required for AppleTv.

    Here’s the dirty little secret about AppleTv that I found out when my Gen 1 unit died recently (having been a happy user for years) and I replaced it with a new one- it requires 6MB + Broadband! I say “secret” because it ain’t on the box, and it ain’t on the main AppleTv page- it’s buried on the specs page. This is a problem, because the new unit is virtually unusable on my 1.5 MB DSL.

    Imagine my shock- I never had problems using the Gen 1. Sure, I was used to downloading things overnight before being able to watch them- no big deal. One assumes a new box with much more modern processor will be that much better, yes? Hah!

    The user experience of the ATV 2 is a FREAKING NIGHTMARE. I can’t believe I just said that about an Apple product, but it’s true. Whatever voodoo is involved in the new streaming paradigm for renting movies, simply doesn’t work most of the time.

    Click Rent. It loads for a few minutes, then you you get the movie’s icon- 29 days left. Click on the movie- click Play- loading, loading, loading…. 2 minutes later- “An error occurred loading this content. Try again later”

    OVER. AND OVER. AND OVER.

    I spent, literally, A WEEK trying to play the first movie I rented. Sitting there on my couch punching play, back, play, back, play…. Like a damned-dirty-ape trying to get the machine to spit out a banana.

    W. T. F. ??!!

    Finally got the movie to download. What changed? What did I do differently? Nothing. I rented 2 more movies last night- same thing. I can’t start downloading either one. “Try again later”.

    Something about the authorization process? Something timing-out because my Internet’s too slow? Some lunatic HDMI / DRM conflict? Because TV show rentals work just fine, as expected. When a movie finally works it still has to download/buffer overnight- again, fine, expected – 3-4 GB over 1.5 DSL.

    But – it DOESN’T EFFING WORK.

    I am truly, truly shocked that a 2nd Gen of an Apple product I have happily used for years- is unusable. Glitchy, maddeningly frustrating. A head-scratching, hair-tearing bag of hurt.

    Yes, I’m going to kill my DSL for 10 MB cable- have been contemplating that for a while- but am not convinced it will solve the problem, because plenty of people with fast cable report the same problem.

    Color me astonished.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.