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Teaming Up With Apple



apple storeIn Apple’s bid to try and take over the world, CBS and Walt Disney Co. are considering participating in their plan to offer television subscriptions via the internet.  Apple is planning to install some sort of monthly fee to watch major domestic television networks and their hopes it to introduce it sometime in 2010.  While this isn’t a reality yet, it signals a major step to change the television business.  Earlier it was reported that this was in the very early stages but now it seems like things are coming to fruition.  If those three companies team up, their combined service could signal a major shift in both the satellite and cable industries.

The combination of channels if all three agreed to some sort of partnership would dwarf their main competitors, Comcast and DirecTV.  The battle is still uphill for Apple because other media magnates like News Corp, Viacom, and Time Warner are all opposed to this partnership and will probably not join up.  All the while, Apple is revamping iTunes, both trying to update it and prep it for the impending download onslaught.  Apple also recently bought La La Media, a music-streaming service that specializes in accessing and managing music purchases.

The economics of this strategy is dicey.  On the one hand, Apple wants to turn a profit on this but they also have to figure out if only providing certain channels will offset the cost.  In one proposal, they would pay media companies $2-4 per subscriber for a major network (ABC, CBS, etc) and about $1-2/subscriber for other basic cable networks.  Another proposal saw a suggestion that a monthly fee of $30 be paid to watch advertising-free shows.

Netflix is bolstering their video streaming, Hulu is talking of their subscription service, and now Apple is making news here.  You gotta love capitalism and the wide variety it gives us.  While we like options, we also want usability and a central source to go to for our entertainment.  The way we receive our shows is changing and only those companies that are willing to take risks and use foresight will come out on top.

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