Nov 6, 2015 — by: Mark Reschke
Categories: Apple TV, Jobs, Steve Jobs

John-kerry_the_negotiatorExcuse me for injecting some concern into the conversation, but it appears the highly rumored Apple TV network streaming bundle is sounding more and more like a zero sum game, or worse. Before Apple’s World-Wide Developers Conference in June, rumors suggested Apple TV would arrive at the show, possibly accompanied with an all new OS and television streaming service for roughly $20/month, the same as Dish Networks Sling TV service. Nothing materialized.

The summer months were slow, but gave us a new Apple TV launch date, which happened this past Friday. However, no TV package arrived and the only constant network bundle drumbeat that gets talked about contains ever higher monthly prices. Initial rumors were $20. That rumor quickly shifted to “between $20 - $30.” The latest price rumor is the now not-so-magical figure of $40/month. $40 did not seem right in terms of price competitiveness, and for a cord cutters that have found a lot of resources to watch what they want, it seems like a lot for perhaps not so much in return. So I checked out what my local providers offer.

Comcast is offering 140+ channels, 75mbps download internet, a DVR, and a two-year locked price of $79.99/month. Frontier is offering 240 channels, 30mpbs internet (upload & download), and a DVR for 12 months for $71.99/month. The second year and beyond runs $84.99/month.

I currently pay $39.99 a month for 30mpbs (upload & download). A skinny network bundle of 30 channels on Apple TV for $40 a month brings me to nearly $80/ by using either Comcast or Frontier as my ISP. So I ask, how is $40/month for an Apple TV network service any value?

Truth be told, this is not any sort of value.

In fact, what Comcast and Frontier are offering is a great deal compared to a $40 skinny network bundle through Apple TV. Comcast delivers blazing internet speeds, a slew of channels, and a locked in price for two years. With both companies, I also get the code to unlock all those shows and channels on my Apple TV. Thus, WatchESPN and other network Apps on my Apple TV will be like gaining another cable box in another room! Finally, all those Apps on Apple TV can be “unlocked” to bringsome real value.

At $20/month, Dish Network’s Sling TV is the right price, it just lacks access to iOS and Apple TV. Whether that was something Dish Network had to agree upon omitting via network demands in order to gain access to their channels, or an Apple lock-out, who knows. But it is one step away from being the right choice for many cord cutters.

What is really troublesome is the apparent lack of negotiating skills by Apple, which seems to have been lost with Steve Jobs. If $40/month is the price for a limited network bundle, it makes me wonder if Eddie Cue and Tim Cook were actually in these negotiations, or whether it was Secretary of State, John Kerry.

Kerry: You need to renounced your destruction of Israel.

Iran: No.

Kerry: Okay... Well, you can never have nuclear weapon capability.

Iran: No.

Kerry: Okay... Well, you need to quit taking American hostages, and give those that are held captive back to us.

Iran: No.

Kerry: Oh, okay... Anything else you guys need?

Iran: Yes. We want to buy conventional weapons, have the trade embargos and sanctions lifted, and give you $100 billion USD just for us showing up to negotiate.

Kerry: Great! We can do that! Sign here!

Not to go all political, but Mr. Mash Potato Face’s negotiating abilities with Iran were pathetic, and it seems Apple has followed the same brilliant strategy.

Apple: We (Apple) want what the people want, which is the ability to buy network cable channels individually, one at a time.” 

Networks: No.

Apple: Oh, okay. Well, we want to make mini bundles.

Networks: No.

Apple: Oh, okay. How about a small bundle for $20 like Dish Network has for their streaming Sling TV solution?

Networks: No.

Apple: Okay, how about a similar set of network channels like Dish Network has for Sling TV, but for more money?

Networks: How does $40/month sound?

Apple: Wow, great! Thanks for really bending over backwards to change the way cable TV is done.

Cord cutters are cord cutters for a reason. They are fed up with the FCC and cable providers acquisition and monopolistic control of bundled solutions. Prices are way out of line, and thanks to the internet and streaming capabilities, those forgoing cable services have found ways to access the content they want without bundle providers. It may be cumbersome, but it is certainly not worth $40+/month for “convenience”.

Apple’s lack of negotiating ability to get networks into changing their business model is quite frustrating. Apple was the company that saved the music industry from Napster digital pirating by offering an inexpensive, ala carte way to purchase music legally. Netflix has taken the long, slow, but determined road of producing original content to add value to their own over-the-top network. Years ago, Apple could have moved into content creation, purchased Netflix or any number of cable networks or sports licenses to create value for Apple TV. Apple has systematically passed on all of it. The weapons they could have now amassed, along with the hefty sales of Apple TV's, would have at the very least added some weight to Apple’s negotiation portfolio. Instead, Apple tried negotiating for years with nothing in-hand, while hobby Apple TV sat idle, with little invention and purpose. 

If Apple ends up selling a $40/month lipstick on a pig network bundle, they will have reaped what they have sowed for the living room TV these past many years, which is pretty much nothing.

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5 Comments

  1. Willie Frazier ~ Nov. 6, 2015 @ 11:07 am

    Basing your conclusions on unsubstantiated rumors is pretty irresponsible, and causes you to lose credibility. #
  2. bdkennedy1 ~ Nov. 6, 2015 @ 12:39 pm

    I'm not paying for my content twice. Almost every TV app requires you to authenticate through your service provider. How are we ever supposed to cut the cord? #
  3. Matthew Smith ~ Nov. 6, 2015 @ 3:10 pm

    Why the politics? That's a ridiculously simplistic and inflammatory interpretation of the nuclear deal, to the point of being inaccurate. Iran is giving up 98% of its nuclear material, shutting down its centrifuges, and agreeing to far more intrusive inspections than ever before. And if they don't live up to it, the previous sanctions and more can come into place. Iran hard-liners are not gonna suddenly say "oh yeah we love Israel now" but getting these large concessions on the nuclear program is a win for everybody. #
  4. Bobby Riggs ~ Nov. 7, 2015 @ 10:51 am

    Matthew - Where do you get your facts from, Mother Jones or Huffington Post or Politico? Here is the factual information, the latest review act we have, on the Congressional website - as much as has been given: https://www.congress.gov/bill/114th-congress/senate-bill/615 #
  5. Frank Roberts ~ Nov. 7, 2015 @ 5:02 pm

    In reality... Kerry: You need to renounced your destruction of Palestine. Israel: No. Kerry: Okay... Well, you need to stop building those settlements. Israel: No. Kerry: Okay... Well, you need to quit taking Palestinian hostages, and give those that are held captive back to us. Israel: No. Kerry: Oh, okay... Anything else you guys need? Israel: Yes. Besides $100 billion USD annually just for mouthing democracy, we want you to keep the embargo, crush Iran, and renounce the negotiations. Kerry: No can do! We're going to join with the world community and support a more moderate Iran, an end to unwarranted hostilities, and begin to question your policies and militarism that are creating terrorists and upsetting peace in the mid-east! Sign off or bug off! Not to go all political, but Mr. Mash Potato Face’s (let's see your mug!) negotiating abilities with Iran were skillful, and it seems far too early for you declare that Apple has failed to follow the same brilliant strategy. Nice column, otherwise! :-) #

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