“The cable bundle is misunderstood. While analysts and pundits focus on when the cable bundle will finally succumb to Netflix, HBO, and Hulu, the reality is the future of television will be built on the back of the video bundle,” Neil Cybart writes for Above Avalon. “Due to superior economics, video bundles are one of the best values in the media space and will remain the dominate way we receive premium video content. We are quickly approaching the point where Apple can capitalize on market dislocation to destroy the modern-day big cable bundle with a more lean bundle that is built to thrive in a mobile world. ”
“The cable bundle has been one of the best consumer deals in the modern era. By subsidizing the true cost of content, the bundle makes it possible for consumers to receive a vast amount of video content for an artificially low monthly price. The bundle works marvelously well as long as everyone pays into the system,” Cybart writes. “This has been the case for the last 20 years. Nielsen estimated there were 116 million homes in the U.S. with televisions, with approximately 100 million having some form of pay TV for the 2014-2015 TV season. ESPN is one of the most widely distributed cable networks, reaching 95 million homes. ESPN has a farther reach than Facebook, a testament of how much power the cable bundle represents.”
“The modern-day cable bundle is now vulnerable,” Cybart writes. “Apple’s strategy to destroy the large cable bundle would entail taking the best parts of the current bundle and creating an improved bundle. Essentially, Apple would be using a slimmer cable bundle to kill the large cable bundle. This may not seem too innovative, however it is one way of addressing the biggest issue people have with their large cable bundle: finding and watching content at a time of their choosing.”
Much more in the full article – recommended – here.
MacDailyNews Take: Bundles are forever. Hopefully, they’ll just get skinnier and smarter.
Apple’s Internet TV service will certainly have to offer ESPN. It will also likely require the “Big Four” networks (ABC, CBS, Fox, NBC) – although it could launch with three out of four and eventually hammer out a deal with whichever one is being the most reticent.
Beyond the Big Four, if you go by ratings (total viewers), the top 20 cable networks are:
7. Fox News
12. Adult Swim
13. Nick at Nite
15. ABC Family
Source: Nielsen estimates, full year 2014
Of course, Apple TV will also need to continue providing access to Netflix, Hulu, Amazon Prime, etc. for subscribers of those services.
5 major Apple TV leaks reveal radical overhaul – August 20, 2015
Apple’s next-gen Apple TV to cost $149? – August 19, 2015
Will Apple TV kill cable? – August 19, 2015
Apple’s Internet TV: How many TV networks will make the cut? – August 18, 2015
The next-gen Apple TV’s marquee feature – August 18, 2015
What September’s new iOS 9-based Apple TV is likely to deliver – August 17, 2015