Aug 25, 2010 — by: Mark Reschke
Categories: News, Products, Rumors

 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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2 Comments

  1. elgarak ~ Aug. 25, 2010 @ 12:59 pm

    It doesn't matter how much money the networks get per subscriber -- just that there are subscribers. The networks don't actually make the majority of their revenue by subscription (except some premium channels like HBO). Networks make money by selling airtime to advertisers, which are promised a certain viewership. Whether or not the viewership is real or not doesn't matter, as long as there are enough subscribers. The problem is: People don't want to watch ads. They're also not interested in channels. They're interested in TV shows, movies and sports casts. And people can get now the content they actually want for free by circumventing the system altogether. It's currently a lot of hassle. The only way for the networks to save a bit of action is to make downloading simple at a reasonable price, with a business model that Apple has already in place. The golden times are over. Face your inevitable death, networks. It's just a matter of time. #
  2. Dow L ~ Aug. 25, 2010 @ 1:53 pm

    When you stop reporting the news and start making it up, people go elsewhere. I'm glad we have reporters of the news like you that state facts which directly affects probably 60-70% of TV viewers. #