Apple pitches ad-skipping for new Apple TV service, sources say

“Apple has a new trick up its sleeve as it tries to launch a long-awaited television service: technology that allows viewers to skip commercials and that pays media companies for the skipped views,” Jessica Lessin reports.

“For more than a year, Apple has been seeking rights from cable companies and television networks for a service that would allow users to watch live and on-demand television over an Apple set-top box or TV,” Lessin reports. “In recent discussions, Apple told media executives it wants to offer a ‘premium’ version of the service that would allow users to skip ads and would compensate television networks for the lost revenue, according to people briefed on the conversations… Discussions have been highly secretive. CEO Tim Cook and senior vice president Eddy Cue held talks with some media companies last week at a conference in Sun Valley hosted by investment bank Allen & Co., the people briefed on the discussions said.”

Lessin writes, “It is a risky idea. Ad-skipping would disrupt the entrenched system of television ratings—the basis for buying TV ads. In fact, television broadcasters sued Dish Network when it introduced similar technology last year. On the other hand, it is no secret that fewer and fewer people are watching commercials thanks to DVRs; networks may very well be eager to make, rather than lose, money off the practice.”

Read more in the full article here.

[Thanks to MacDailyNews Readers “Fred Mertz” and “Lynn Weiler” for the heads up.]


  1. most of the readers here are probably too young to remember this but cable t.v. was originally pitched in the u.s. as something that wouldn’t have ads because you were paying a monthly service fee. that is how it was originally sold to consumers and to get the gov’t approval.

    1. very interesting! All I know is that they’ve been slowly but surely increasing the count, putting them in the corner while your watching a program, and generally being the greedy assholes we expect them to be. Nothing would please me more than to see massive disruption in the industry and the collapse of cable providers. It’s a pipe dream, I know.

      1. Excellent point.
        Still, if you think about it, it appears very odd to pay for NOT being forced to watch anything the TV channels see fit to harass us with.
        Obviously, the compensation for NOT watching adds would go to the companies trying to advertise their products.

        But we all know the TV channels also add additional very annoying previews of programs, i.e., adds for themselves. What we will see happening is a further increase of those previews, because it would mean money in their own pockets.

        1. I know I like seeing some ads, some ads are even fun to watch when they are done cleverly, advertisers have to up their game on the quality and creativity of commercials they make. I enjoy watching the superbowl ads, why?, because they are generally better commercials than what you see other times of the year. Budweiser always makes great ones…

        2. “appears very odd to pay for NOT being forced to watch anything the TV channels see fit to harass us with.” That is one of the reasons one buys programming on iTunes. Judging from the popularity of this service I would say lots of people are willing to pay not to have commercial interrupt the program.

    2. Hmmm… so do I understand this to mean that:
      1) Apple pays the Networks a few cents per viewer, per skipped ad;
      2 Then the viewer is happy cause they didn’t have to see the ad,
      3) And the Networks are happy cause they are getting some money,
      4) And after a while, advertisers are pissed cause viewers are not seeing their ads,
      5) Then after a while, the advertisers don’t give Netwotks money to place ads, and
      6) then the Networks crumble cause the no longer get ad revenue?

    3. Slippery Slopes.

      This is what a so called “Free Market” at work looks like without any regulation. I am sure at the time people warned about this and were called all sorts of names for saying anything against the free market forces.

      This is also what government take advantage of when they want introduce something obtrusive into your life. Take bio-printing on passports for example. Government introduces it as an option…at first. Making it look like you are free to do whatever you want. Later on it becomes impossible to do anything without one of these documents.

    4. Interesting.
      To be honest. I have always questioned why I should have to watch commercials when I pay for the service. I just don’t get it. I pay and still get served ads… Imagine if iTunes Radio was like that… It’s actually kinda stupid. People need to wake up. It is probably just so accepted that no one reacts or think about how ridiculous it is.

  2. I so DO remember that, and it infuriates me how these things morph.

    (Our lottery was sold originally 30 years ago as a benefit for the general state budget and for higher education but became a way to fund new stadiums for local tycoons.)

    Cable was turned into something much different than how it was first pitched.

    Those are reasons why I’m leary of stuff that gets around a law by promising something good for all of us, which later actually benefits a few of us, a promise nobody remembers to check up on — a scam that has been used to great effect over the ages.

    Few people understand that OTA (over the air) digital TV broadcasts are superior in quality by far to the highly compressed cable TV channels, and yet there is a company selling rabbit ears and calling it “FreeTV” and charging for it, when in actuality it truly is already free!

    1. Or how we allocated billions of tax dollars to create High Occupancy Vehicle (HOV) lanes on the freeways in an attempt to alieve traffic congestion only for the State award buyers of hybrid cars a free pass to drive in these lanes with a single occupant. So much for incentivizing car pooling. As for cable TV I remember when I first got cable 40 years ago and watched the premium HBO for the first time. No commercials right? EXCEPT FOR THEIRS! Even then they were constantly hawking their upcoming shows and movies.

      1. I am always confused by these claims. How do you get your internet connection? Is that not a cable, wire, physical hook-up of some sort? Don’t you pay for that? Unless you use the wireless of some unsuspecting and not very smart neighbor, you are paying for some connection, Granted, it is hopefully less expensive than cable TV. But, unless I am totally clueless, you are not getting Netflix and iTunes access for nothing.

        1. You DO need an internet connection… that’s true.

          This is the setup I personally have:

          Internet: $30-60/month
          Phone: Magic Jack – $20/year
          TV: Over the air digital television – FREE
          TV: Netflix – $8/month
          TV: Apple TV – $2/show

          For me, what was once over $200/month has turned into about $50-80 for all of my phone, internet and television needs… a substantial savings. Hopefully your confusion is over 🙂

  3. ok, talk about things morphing into something no one expected, when the income tax amendment was first proposed the OPPONENTS said that we were letting a camel’s nose into the tent and the next thing you would know, the income tax rate would CLIMB to 2%!!! that’s what the opponents were saying!!

  4. Wow… If Apple created a “smart DVR function” that would AUTOMATICALLY skip commercials without me hitting the FF button and using the “hit-or-miss” approach to stop FF, that would be a killer feature.

    As I’ve commented in the past, Apple’s path to TV dominance is to work WITH the cable service providers, NOT against them. iPhone’s initial success was the result of working WITH the various wireless service providers (usually one per market), NOT creating Apple’s own competing wireless service that replicated what already existed.

    The simple truth is, Apple TV will stay a “hobby” unless it can provide EVERYTHING the typical cable customer currently gets over cable, from Day One, at the same cost or less. The ONLY way that happens is if Apple works with cable companies, to provide an ultra-slick user interface to replace the horrendously bad user experience of cable boxes (which is like a poor copy of 1990’s Tivo).

    Apple would still provide its own content over the Internet, as it does now with the Apple TV mini-box, but the cable-based content would exist seamlessly alongside, as a choice on the Apple TV interface. This includes services, such as “on-demand” and “pay-per-view.” The customer gets EVERYTHING they have now from cable, plus the content provided through Apple. That’s how to make Apple TV succeed on the scale of iPhone and iMac.

    The cable companies are happy, because they get to keep their existing cable customers (Apple is not trying to steal them). They also have a new weapon (Apple’s user interface) against current alternative services, such as the telephone company (AT&T U-verse) and satellite (DISH and DIRECTV). They can subsidize the cost of Apple TV hardware by replacing the current monthly cable box “rental” fee they charge with a service fee to use an Apple TV.

    Apple is happy, because they get to sell the hardware. The Apple TV mini-box (obviously a new version) would be the “free with contract” choice, but Apple can also release their long-rumored complete TV, and sell it (partially) subsidized with an upfront price that is on par with low-end HDTV sets of similar size. So, again, Apple is following its iPhone model. Let the service provider subsidize the cost. Apple is able to sell the complete “smart” Apple TV with an upfront price tag that matches or beats the competition’s “dumb monitors.”

    Cable customers are happy simply to be rid of the stupid cable box, and have it replaced by an Apple TV, along with Apple’s “value added” services. And I’d be willing to pay extra for “automatic commercial skipping.”

    1. I suppose that not only Apple, but also many other companies already created software that would automatically skip advertisements. The issue was and is that the licensing of such feature is hell, and even Apple may not overcome the hurdles.

      If they would, this would be “revolutionary”.

    2. Interesting speculation. I wonder what effect this commercial skipping would have on the sale of programs on iTunes? No commercials is one of the advantages of the iTunes material.

  5. Apple could buy one of the premium content providers outright (HBO) and reverse the licensing argument whilst offering the superior UI and integration with other services that would change the game entirely. Multiple revenue streams (HWare, ads, ad skips, other services, contents sales and rental, PPV, etc) all wrapped up in a single integrated elegant device/system that works. The rest would have to come to the party. Apple alone has the money and it would change the entire model and give people what they want.

  6. The number of commercials on TV is ridiculous and any solution would be welcomed. Same with the internet. If you try to watch video news clips the percentage of time spent on ads increases hugely with many websites forcing you to watch between a 15 to 30 second commercial with every tiny news clip. At first, I did not get ads much with the iPad, but now that has changed, too. Why can’t someone offer a premium service for TV, internet and email that gets rid of all of this junk?

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