Several news outlets are reporting that Apple is finally ready to enter the TV business. However, the way they’re choosing to enter the market differs greatly from what was previously expected. Many speculated that Apple would actually produce a television, but that no longer seems to be the case. According to the Wall Street Journal Apple is slated to unveil their new streaming TV subscription service later this year. This is huge, and I’m excited.
Why This Matters
Those of us who have attempted to “cut the cord” know how difficult it is to do so. There are no shortage of sans-cable options, but many of them don’t offer interesting packages for most people. Cable companies have had a stranglehold on the industry and many of the standalone streaming apps, like HBO GO for instance, required a subscription to a cable provider in order to use it. This is not ideal and defeats the purpose of cutting the cord to begin with.
Apple’s new streaming service won’t be enough to take down the cable industries. In fact, I’m not sure it’ll even make a dent in the grand scheme of things. The amount of people who own Apple TVs vs those that don’t is minuscule. What this new service does do, however, is that it shows other companies (and studios) that they have options. With a behemoth like Apple negotiating deals for streaming content, the cable companies will have to take notice, and it could spark real change in how cable TV works in the future.
As an Apple fan I’ll be first in line to try this new service, but I don’t expect it to replace my existing TV service… Yet. What I do expect is for this to send a shockwave into the world of cable TV and hopefully make it so that the process of subscribing to channels and services becomes a little more democratic. When it comes to TV, all I really need is a decent internet connection and a handful of channels. I’d love to be able to select a base internet package, at let’s say $40-$50 per month, and then be allowed to choose the TV channels I want a la carte for $5-$10 per channel. I’d wager that this would take my bill down under $100, which is a huge departure from the near $200 charge I currently pay.
My Expectations for the Apple TV Service
If the rumors are accurate, the Apple TV streaming service will feature around 25 channels for roughly $40-$50 per month. This is quite a bit more expensive than competitors like Amazon Prime, Netflix, and Sling TV. That doesn’t mean that it won’t be successful, but I do think that its success will hinge on what type of content deals Apple has been able to negotiate with their content partners.
Not surprisingly Comcast/NBC is reportedly not a part of the initial offering for Apple’s service. Comcast has always been hesitant to broker deals for streaming, however, and I expected this. The question is whether or not the lack of all that programming (Comcast owns a LOT of content) will ultimately hurt the popularity of the new Apple TV service. I don’t think it’s a deal breaker necessarily, but it’d be great if Apple could somehow get Comcast on board with this.
The service is said to include ABC, FOX, and CBS, but there needs to be more big name players involved if you ask me. For instance, I think ESPN is a pivotal piece of the puzzle. Sports is one of the most popular broadcast genres and without it there’s going to be a gaping hole in Apple’s new service. Another plus would be bundling in Disney, HBO, and other partners that are normally part of the “premium tier” of cable TV services. If you’re charging a premium price, you need premium content.
I also hope that the service isn’t just 25 channels. I’d like to see there be 100+ channels available, and you get to pick your favorite 25 for your subscription. This would also allow for multiple tiers of subscription revenue for Apple, and I’m sure they wouldn’t mind another influx of cash. Of course, this is probably just a pipe dream, but we’ll see what happens.
The Future of Apple TV Hardware
At Apple’s recent “Spring Forward” event they lowered the price of the current model Apple TV to $69. At first I expected they were doing this to make way for updated hardware that we’d see some time later this year (possibly at WWDC). However, I now believe that there will be multiple models of Apple TV, much the same as we see in iPhones and iPads. I’d wager they’ll keep the current model Apple TV around as a budget option in order to get people through the door, but that they’ll release a newer model with expanded capabilities at a much higher price point. The sweet spot for this would probably fall around $150-$200.
Whether or not Apple bundles the TV service with the new hardware is a whole other discussion. Personally, I don’t see that happening. Apple is all about making profits and they rarely bundle things together. That being said, I think that’d be a great up sell for the high-end Apple TV model.
I’m very excited about the future of TV. No, not just Apple TV, but the industry as a whole. Having more big name players in the space creates competition, and that is one thing that the industry lacks big time. Apple is big enough and popular enough to affect change in this space, and seeing as this is an industry ripe for disruption, I welcome their entry into the market.