Apple’s iTV project may not be so revolutionary; virtually impossible for Apple to offer a la carte channels

“It looks like Apple’s mysterious ‘AppleTV’ project may not be so revolutionary — or disruptive — after all,” Julia Boorstin reports for CNBC. “After months of speculation that Apple will upend the TV business, allowing consumers to ‘cut the cord’ and buy TV channels a la carte, the latest word is that Apple will not threaten cable operators and their media giant partners.”

The Wall Street Journal reports the tech giant is in talks with cable operators to use its device as a set top box. If this is true, cable and media moguls must be breathing a huge sigh of relief,” Boorstin reports. “Though nothing has been settled, Apple would offer a service from the cable operators, likely charging them a fee — it takes 30 percent of much of the content it sells. Ultimately Apple would offer a cool interface to seamlessly navigate TV and web content.”

Boorstin reports, “(If this is true) Bottom line: Apple is focusing on the box and not the delivery system because the content creation and delivery companies are just far too entrenched to be disrupted. The largest media company — Disney — and the largest distribution company — Comcast — struck a ten year distribution deal earlier this year. That means it’s going to be virtually impossible for Apple to offer channels a la carte…. Media companies are wary of giving too much control to Apple — look at the disaster that befell the music industry when Steve Jobs controlled all transactions.”

Read more in the full article here.

MacDailyNews Take: Look at the disaster that befell the music industry? You mean, Apple saving its ass from all-out piracy? Without Apple or Steve Jobs there would be no music industry of which to speak today. And Steve Jobs never “controlled all transactions.” Not even close. Stick to reporting facts, Julia.

Related articles:
Apple in talks with U.S. cable operators over transforming Apple TV into set-top box for live television – August 16, 2012


  1. IMO, iTunes/AppleTV should take on YouTube/Google vis-a-vis courting content producers. Apple should develop their original programming as well as more direct-to-internet content like Joss Whedon’s Dr. Horrible’s Sing-Along blog.

    1. Good idea, Apple should let iTunes users upload all sorts of copyrighted material for everyone to enjoy, make it easy to replicate so when one copy of the video is taken down two others appear and then suggest content producers be satisfied with a pittance share of online ad revenue.

  2. Landing a man on the moon was impossible until it was done. After the cold war we thought it was impossible for someone to attack or home land until 9/11. And just the other day we thought it was impossible to land a 1 ton or so craft on Mars and that is done. So why would anybody think it is impossible for Apple to do? It will be not as easy as the Music Companies but it will be eventually done. There are always possibilities.

  3. I’m wondering just what value would an Apple set-top box add to anyone’s TV viewing habits or workflow? Unless the device lets me cut the cord with the Comcast bundled channel lineup, I can’t imagine why I’d be interested in buying one.

    Just to view NFL games I have to sign up to pay ten bux more a month for a year and get an “incredible” package of unwanted and unnecessary channels ranging from the Amelia Earhart Challenge Channel to the Zarkoff Film Archive channel. All I want is to watch football.

  4. When anyone writes things like “look at the disaster that befell the music industry…” what they are referring to is the “disaster” that music moguls aren’t raking in money hand-over-fist the way they did prior to iTunes.

  5. Huh???

    Apple is already offering “a la carte” channels via app store apps like the ABC player.

    People don’t want live “a la carte” channels. They want on demand “a la carte” channels.

  6. No matter what other services Apple offers, I believe it would want its iTV to connect to cable TV service so it can integrate various formats: cable, iTunes video (TV, movies), pay-per-view content, DVD/CD, over-air broadcasts. Who wants 3-4-5 devices and remote controls?

    So I don’t see this news report as evidence that Apple is unable to sign up content providers.

  7. Apple’s going about this the right way. Their rumored iTV is DOA without content. Just ask Google how bypassing the content providers was a boon to their still-born TV platform.

    A la carte channels will remain one of those techie pipe dreams, until somebody shows the content providers how this type of setup would create new revenue streams that at least match what they currently get. It’s that simple.

    While people like to blame the cable companies, it’s actually the content providers that have imposed these ridiculous carriage fee hikes. The bottomline is that the channels that people watch (and if unavailable, will cancel their pay TV service over) cost a lot more. The economics of the industry are built around these channels being available on the basic service tier. Most of the less desirable channels are on the channel grid because they’ve been bundled with the more desirable ones. If these channels get split up, then the cost per channel will escalate accordingly.

    For example, right now ESPN charges about $4 a month for each subscriber, and that’s the monthly revenue that ESPN collects from carriage fees alone). If they get dumped off the basic tier into an a la carte option, there’s no way that the a la carte cost per subscriber will be $4, because that rate is based on ESPN being available to 80 million subscribers. The short of it is that unless you only subscribe to a select few channels, a la carte channel could very well create a situation where subscribers wind up paying more for fewer channels.

    For now, it will all boil down to what the market will bear. I think the subscription fees are close to the upper limit of what many households will pay for. While so-called cord cutting gets a lot of play in the tech press, the reality of it is that cable/satellite subscriptions have simply reached their natural saturation point (80% of U.S. households subscribe to pay TV services). The subscription rates have not grown much in recent years, but cord cutting has not actually led to a drop in actual subscriptions when you look at all forms of pay TV together (cable, satellite, fiber, and IPTV).

    What Apple potentially adds to the mix here is a new and innovative way of integrating different pieces in the living room together. Thus far, no convergence device brings web content and TV content together in a compelling way, and respects how most consumers prefer to watch TV (i.e., sitting back on a sofa, and viewing on a big screen). Some of the iPad apps out there are getting close (Directv’s iPad app is quite good and new functions are getting added to it regularly), but they’re not quite there yet. Apple has a market opportunity here, but in order to fit all of the puzzle pieces together, they have to ensure content availability. And for the moment, that means playing ball with the service and content providers. Google tried to piece together a platform by scraping together a bunch of “free” web content. But, they forgot that the content providers won’t give something away without getting something in return.

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