Earlier in the year, Apple's highly discussed $30 all-you-can-eat media idea evidently met a quick death. Thus, Apple moved to plan B. Unfortunately Apple appears to be forced into plan C, delivering a less than desired solution for our living rooms.
Apple's plan B attempt was to allow the user to buy networks a-la-carte for $x.xx a month via an iTV (AKA Apple TV).
Buying networks a-la-carte can only be described as the killer app in the living room, and here is why Apple's plan B died:
Let's use Disney Corp. and Comcast as an example. Disney owns about 30 networks. Each network has made the best deal it can with the Comcast. ESPN may receive $1.50 per Comcast subscriber, while Lifetime may pull in only $.65. Overall, Disney Corp. may receive $8 - $10 per month, per average bundled Comcast subscriber.
Enter Apple, who wants to sell channels a-la-carte, letting the user decide what channels they want to purchase. Apple is likely to have sweetened the deal significantly per channel buy, perhaps giving EPSN $3 per subscriber. But what are the odds that same ESPN subscriber is going to buy the ABC Family Channel, the Lifetime Real Women network, or enough Disney Corp. channels a-al-carte through iTV to make up Disney's bundle money from Comcast? They won't. Each Disney network may glean more per subscriber via iTV, but overall, Disney stands to take significant risk is losing their large bundled revenues.
Does this game sound familiar? It should. It is the same game Apple played with with the record labels, allowing iTunes to sell music via album or individual track. The major difference between the music industry and the media networks is the record labels were being crushed by pirating, giving Apple great leverage to close the iTunes deal their way. Unfortunately, the networks are not feeling the heat with pirating, and the pressure to change is not warranted, yet...
Unfortunately, there are far too many corporations that own 10+ networks, and they find safety and profit in cable bundles.
For now, Apple looks resolved to move towards plan C, shows being streamed for $.99 an episode (let's all hope it's in HD for that price, or this will be another dead end).
Until we little consumers have the choice to purchase only the networks we want, we will continue to subsidize garbage we don't want filling up our cable boxes, in order to get networks we actually want to watch.
Steve Jobs and Apple are again trying to help the consumer gain choice, but the bad album continues to be forced down our throats when we just wanted that one hit song.
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