Apple's iTunes pitch: TV for $30 a month

Would you pay $30 a month to watch TV via iTunes?

That's the pitch Apple has been making to TV networks in recent weeks. The company is trying to round up support for a monthly subscription service that would deliver TV programs via its multimedia software, multiple sources tell me.

Apple isn't tying the proposed service to a specific piece of hardware, like its underwhelming Apple TV box, or its long-rumored tablet/slate device. Instead, it is presenting the offer as an extension of its iTunes software and store, which already has 100 million customers.

A so-called "over the top" service could theoretically rival the ones most consumers already buy from cable TV operators--if Apple is able to get enough buy-in from broadcast and cable TV programmers.

That's a big if: Apple has told industry executives it wants to launch the service early next year, but I have yet to hear of a single programmer that has made a firm commitment to the company, which has tasked iTunes boss Eddy Cue with promoting the idea.

But industry executives believe that if anyone jumps first, it will be Disney, since CEO Bob Iger has shown a willingness to experiment with Apple and iTunes in the past: In 2005, Disney was the first player to sell its programming on iTunes, via a la carte downloads. And Apple CEO Steve Jobs is Disney's largest single shareholder, a result of Disney's 2006 acquisition of Jobs' Pixar animation studio. Apple didn't respond to requests for comment.

Network executives I've talked to are intrigued with the idea--they are eager to find new revenue streams--but are also wary, for multiple reasons.

Cable networks, for instance, don't want to threaten existing relationships and subscription fees from cable providers like Comcast. And programmers are also worried about the effect a subscription service would have on advertising revenue: Even if the service didn't distribute TV programs until after their initial air date, that could cut into ratings, which now measure viewership over the course of several days.

But the move to deliver TV and movies over the Web is already well under way. Netflix, for instance, already bundles free streaming movie and TV along with its disc-by-mail subscription service. iTunes and Amazon rent movies on a one-off basis, and Google's YouTube is trying out the same thing. And Hulu, the joint venture between GE's NBC, News Corp.'s Fox, and ABC, is figuring out how to launch a paid service that may include rentals, paid downloads or subscriptions.

So Apple's proposed subscription service, which the company has floated in the past, is no longer a huge stretch. Says one executive briefed on the company's plans: "I think they might get it right this time."

Story Copyright (c) 2009 AllThingsD. All rights reserved.

[c60chemist]

I wouldn't pay a dime. Friday night my daughter wanted to rent a movie on iTunes. 45 minutes later after serious attempts to upgrade iTunes and wait for the slow Apple servers we gave up.

I guarantee you that Steve Jobs does not use iTunes to rent movies. And the people at Apple in charge of this fiasco pray that he never does.

[tmeesseman]

That's why they're building a huge server farm in NC. They grew faster than they thought they would.

[iertry]

I rent movies from iTunes all the time. I have an almost 2GB movie downloaded on 20-30mins. Downloading iTunes itself is fast also. I did it earlier this week and had the 90mb download completed in 3-4 mins. My guess is that you are on an slow internet connection not meant for downloading movies.

[ikramerica--2008]

Or that his ISP is throttling...

[cary1]

I just get it from Redbox. $1 per night.

[mrcockrell]

i must have installed iTunes on over 100 computers and never would i have described it as slow considering its size

[BtmnHatesRbn]

@c60chemist

Got Quake to run once and now you're a computer expert, huh?

[AppleSuxLeo]

iTunes is a bad joke , used by suckers ; )

[lazycat202]

you guys think that ISP (comast, RoadRunner, Verizon, etc...) providers would sit back and let Apple grab all the money?

[savvydude]

If Apple can modernize the jurassic-laden cable TV biz, I'm all for it. Go, Steve, go!

[philosfool]

Yes. The whole watch-on-schedule model is crap. Everyone interested in creating a new model wants long-term exclusive license agreements from copyright holders. Everyone holding copy-rights wants to make sure they can deliver their content with a proven-profitable medium. It looks like a case of intellectual property law stifling rather than encouraging innovation.

[bctexas]

I agree, I'm tired of paying $60 per month for 500 channels when I only watch maybe 12 of them. I want a cable service that lets me pay for only the channels I watch. Why should I have to pay for channels that have worthless bags of skin like the Kardashians or a Hilton when I despise them and dont want to pay for a channel that would dare put such garbage on tv? I'm all for it, I'll pay $30 a month.

[BtmnHatesRbn]

Come to my town, where the cables for the cable TV don't even work after 5 PM because of the shoddy quality used by the cable company. The service doesn't come back on until 9 AM! And yeah, I pay $70 a month because DiSH and DirecTV want double that to get good channels in the town I live in. If I could ditch the $70 a month and switch to a $30 Internet service from Apple with the same options for viewing, I'm gone!

[celticbrewer]

bctexas, I agree with your feelings on pricing and having to pay for channels you don't watch.

But I don't follow your logic. Instead you'll be paying Apple to do the same thing. It doesn't sound like you're buying one channel or one show- it's a subscription which entitles you to more quality crahp like the Kardashians.

Apple isn't "modernizing" anything. The technology has been there for years. They're just using their new clout to offer their own subscription to the same old content. Instead of paying the cable company, you're paying Apple. Of course, you're going to have to pay the Cable company anyways for your internet access and when you get rid of your subscription TV, they'll usually tack another $10-15 dollars onto your internet bill.

In the end, you'll be paying the same or slightly less for Apple TV and getting a lot less channel choices.

[cvaldes1831]

I would consider it if the service had live sports events. Otherwise, forget it, I'll stick with my OTA HD antenna and whatever free Internet offerings are available.

[tenbosch]

Quite frankly, you'd be foolish to given that content is freely available from sites like Hulu and Youtube. Not to mention that most of the big networks offer free streaming as well. And even if/when they do start charging, it's not going to be $30/month.

[ibeetle]

You Tube is crap. Hulu has commercials. Tried watching a movie the other night. It is almost as bad as Cable. Every 20 minutes. And sure you can watch last weeks Desperate Housewives on ABC streaming on your laptop, but without serious jury rigging and still a crap picture result there is no way from network website streaming to a television.

[mrcockrell]

@ ibeetle

both of my TVs have a PC connected to them so there is no "jury rigging" and i cant believe your actually complaining about 15-30 second commercials compared to 5 minutes on cable

[neologismist]

Ah, but Hulu is about to start charging for content. In fact, most of the free stuff online is going to be slipping behind pay walls in the next two years. Rupert Murdoch has vowed that all of his properties will start moving that direction by summer.

[mtnelson]

I cut the cord a few months ago and I honestly don't miss TV at all. I don't watch sports, so Hulu and iTunes are really all I need, but there is NO way I would pay to use hulu.... Sorry Rupert.

[maneeshpan]

Yes I have been waiting for something like this for a long time -- but none of the players in the legal video download market I've seen have actually delivered so far. The closest thing to subscription TV currently available would probably be the On Demand TV feature in VUDU Labs for users of the VUDU online service -- of course the VUDU online service is only available to users of the VUDU box and VUDU XL devices.

Even VUDU's On Demand TV is not quite a complete solution that I would want to have. I'd want a complete subscription TV solution. Of course it would also be nice if Apple added DVR functionality and an on screen interactive program guide but they seem to be opposed to allowing it to have the functionality of a cable box.

So I'm with savvy dude in saying go Steve go! Go Apple go!

[bugma302]

Why would On-Demand need a DVR functionality?

[maneeshpan]

Sorry for the double post just wanted to add one more thing whatever subscription TV service iTunes would offer users should be able to have the choice between watching subscription TV via iTunes in HD or SD. They could probably do something like $30 a month for unlimited access to subscription TV via iTunes in SD (for just the SD) or $40 dollars a month for HD versions. which may also include SD copies for a video iPod.

[Turgeson]

If it leads to ala carte channels, I'm all for it. I'm sick of paying for channels I'll never watch... EVER. Give me the option to only pay for ESPN, my local channels, History, Discovery, the woman channels for my wife and some of the kids' channels, all live capable and I'll be a customer for life.

[srminton]

The reality is, however, that you probably wouldn't save much money. It sounds tempting, to buy access to TV channels a la carte, but the truth is that the cost per channel is incredibly low via the current model which is based on a) cable/satellite providers purchasing power and b) scalability of advertising revenue which is the biggest funder of programming (whatever the iTunes model, it's inconceivable that it would have as much traditional advertising as network or cable television, mainly because it's less effective on a computer screen or iPod than a TV).

In a truly 'a la carte' model, what would be the likely minimum charge per channel? $5 a month perhaps? (probably conservative - some channels would probably want $10 a month or more, given the cost of buying individual shows at $2 each). So given your list of ESPN, History, Discovery, several kids' channels and 'the woman channels' (we'll take a leap and assume the local channels will be free or almost free), I bet you'll quickly be paying almost as much as you already do. Which might be just fine, if the iTunes interface is much better than crappy cable boxes and if you can put shows on your iPod and watch offline on your laptop etc. I'd still be interested, for those reasons. But I'd be amazed if a la carte winds up saving the average TV watcher any money. Having said that - it will be a million times cheaper than buying individual shows at $2 or $3 a pop as per the current, ridiculous model.

[BtmnHatesRbn]

Actually, if entire cable TV systems go 100% digital, then it's actually cheaper to deliver more channels. None have from what I've seen.

It'd be nice, though, if all cable channels weren't owned by the same networks and movie companies that own everything else. NBC, for an example, made every channel they own another version of NBC: USA, Bravo, UHD, Sleuth, Chiller, etc. And then it seems every channel started airing worthless, boring, stupid, should-be-banned-by-law "reality" TV shows, usually about either prison or housewives.

Then the Seven Heads of the Beast, I mean, the Seven Major Companies in Hollywood (Sony, CBS, Viacom, NBC, WB, Disney, Fox) scream at low ratings and lack of viewers when they're airing the same garbage over and over and over and over again. Blame pirates. Blame iTunes. Blame video games. God-forbid they blame their programming managers!

[tmeesseman]

I'd pay it... I don't have cable because it costs too much for shows I'll never watch. This way, it's cheaper, on-demand, and has a huge selection.

This would probably sell a lot of Apple TVs and Mac minis too.

[Renegade Knight]

It would depend on the restrictions. I have more active computers than my one apple account supports (which is 5). Apple would need to make it worth dumping cable (and taking a hit on my broadband in the process).

[chipsendip]

Anything that can further drive the nail into the coffin of cable television is fine with me. Let everyone try - someone will figure it out sooner or later.

[dbargen]

As someone who just moved into a new home and has yet to get cable or satellite installed, this is an attractive option - I only watch a small number of shows, and Netflix takes care of movie consumption.


To be able to access any show I want any time of day for a low monthly fee is very consumer-friendly. The only drawback would be getting real-time or close to real-time sports broadcasts. Until Apple can wrangle a streaming deal with the leagues and collegiate sports coverage networks, I may have to try and find some special sports-only package (if it even exists) to supplement an iTunes package as described here.


As for news media, I've moved to getting most of mine via RSS feeds (fastest selective coverage) and podcasts. Sorry, but I can't stand to have many of the cable news outlets as something I can stare blankly at and wait for news to be spoon fed. Give me audio or print any day.

[BtmnHatesRbn]

Amen. I get all my news from the web in the morning in just about an hour right when I wake up. Local news is the only thing I watch, because they're nothing local for a small, puny, backwards town I live in.

[adam_m_frederick]

As someone who has only an internet connection and no cable, I know I can already watch 95% of my favorite shows online. Couple that with online netflix and my xbox360, and i'm covered for basically everything for about $30 a month already ($15 for netflix, $15 for internet) and i'm not convinced i'd pick up tv from itunes at an additional $30 just to watch it on my dinky 20" screen.

However, if (big if) itunes offered $30 a month for cable PLUS their movie/tv show rental service (flat rate, all the tv you can watch/movies to rent) then i might consider. Throw in usuability/portability on the tablet device ( if more than just a rumor ) and i sweetens the deal even more.

I can't say i'd def pay for the service, but i would take serious time to consider it.

[adam_m_frederick]

Am I the only one that sees this as a move to get TV on the so called Tablet device? Its supposed to be great for video (if you believe the recent rumormills)... so why not TV too?

[AppleSuxLeo]

Brilliant ! Pay shows you already get for free OTA or already pay for. Why not deliver TV to phone like Sprint or better yet Verizon ? Apple is grasping at straws after all the Android frenzy.

[Perry_Clease]

You are wrong, as usual

[AppleSuxLeo]

Note to self...get superfast net service and spend time DL TV shows I already get for free and/or pay for on cable HD and watch on DVR at my time schedule. And pay Apple $30 ! NOT

[AppleSuxLeo]

Web 2.0 is all about streaming to the phone , take PC out of the equation.
Instant gratification.

[cvaldes1831]

Actually Web 2.0 is social networking using the desktop web browser paradigm (which is now horribly out of date).

Streaming video to a mobile device isn't using Web browsers (HTML pages). Yes, it's using the Internet to transmit data, but it's not the Web.

[Mergatroid Mania]

Why would you want to watch TV on a dinky cell phone screen? I can think of lots of things to do with my smart phone, but watching TV and movies is not one of them. I have a nice big screen TV for that.

[AppleSuxLeo]

Because that is what Apple is pushing...pay for TV you already get so you can watch on dinky iPhone screen.

[stickfu]

As someone else mentioned if it was ala carte I`d seriously consider it, I pay about $60/month and realistically only watch a handful of channels and shows (because of certain channels I want I got to get a bundle), the rest I consider pure garbage.

[garrison_richard]

I'm overall very pleased with iTunes downloads both with download speed and quality. Cable on the other hand is a big joke. They charge around $40-50 for basic cable which doesn't include a DVR or HD. If you just want 4-5 channels, they make you buy all the garbage you don't want in a package. Something you don't want isn't a bargain at ANY price. On demand is terrible, both with quality (widescreen? HD?) and selection. Plus cable boxes are terrible - slow and 8 bit looking graphics.

If cable wasn't included in my rent, there is no way I would sign up. It is much nicer to watch higher quality and commercial free tv on iTunes. But, it is expensive to buy an episode at a time. I hope they do a everything-on demand package and cut out the commercials. Otherwise, what's the point? It would basically be Hulu with a fee... Oh wait...

[lcview]

Competition will only lower prices. I say go for it. Comcast is a rip off as it is, anyway.

[GoingToAlpha]

Fantastic, so long as you aren't with one of the ISP's who have a maximum monthly transfer rate.

Something tells me Comcast won't be letting Apple usurp their business by allowing them to fall outside of the 250GB/month cap. And before you cry net neutrality, that still won't force the providers to remove their caps, just to stop prioritizing.
I wonder just how much data would be used per month to serve up HD video to 2-4 devices... Enough left over for NON-streaming-TV usage?
The providers could always just tack an additional $30 onto your bill to remove that pesky cap... But do we think the content providers will let apple do this ad-free? Or are we back to paying $60/month for something that is still ad-supported?

[GoingToAlpha]

Honestly I'd rather pay $50/month to Netflix for access to 100% of their content via Instant-On. Hell, I'd probably go as high as $60-80/month if it really was ONE HUNDRED PERCENT of their content via instant-on.

[ibeetle]

I can see the c|net articles come February 2010 at Macworld:

February 9th: Macworld Keynote Steve Jobs announces $30 dump your cable plan with iTunes TV Store. Every single show on iTunes everything from ABC to HBO, from the WB to CBS.

February 10th: Every single cable operator in the U.S. universally and simultaneously announces a 10 Gig a month cap and a 20% price increase on ISP service, but a 20% price cut and no cap if you keep your triple play package.

[lazycat202]

i'm on 250GB/month and it sukcs. Most of them don't realize that online TV contents depend on ISP providers. They think it just works out of the box.

[celticbrewer]

ibeetle has it exactly right.

My Internet is, say, $20 a month because I have a land line (very basic phone service, pay by the minute for outgoing. It costs me $7 a month and I don't have a phone even hooked up to the line). If I got rid of the $7 phone line that I never use, my internet cost goes up $10. So, yes, it's cheaper for me to get an extra service.

They'll do the same thing. If you drop your TV subscription, something else will rise. They'll start imposing a digital media transport fee or something lame like that.

[stanorlaski]

This makes less sense everyday. First of all, the biggest competitor is not online services but Fios/Cable's OnDemand. Most of the most popular shows are already available on demand. Pricewise, why bother when you only pay about $40 for cable anyways in a bundle package.

Plus, personally iTunes is a curse on most Windows machines. I look forward to Windows Media Center doing the same thing through our XBox360.

[GoingToAlpha]

The day MS does this through 360 is the day I light my FiOS(tv) box on fire and dance around it.

[AppleSuxLeo]

Windows 7 is a HTPC already and supports ATSC/NTSC tuners as well as HD cable cards.
Records TV and acts as DVR...can stream to TV via Xbox or any other media center extender.
NO FEES !

[AppleSuxLeo]

Woot Woot !

[DrtyDogg]

you still have to pay fees for cable card access.

[cary1]

so you don't pay anything to your cable company?

[AppleSuxLeo]

OTA is free , and has the HIGHEST quality HD possible. Not compressed like iTunes, Cable , Satellite
I do frame grabs and they are like 8 megabytes !
Plus you get all the sub-channels they broadcast. Just get an UHF antenna.

[tektaktyks]

or you can get fta (free to air i believe) dish and a pc card,and never pay a fee again.