Apple’s Next Target For Disruption – TV Streaming
Having shaken up the music streaming space with the launch of Apple Music, the iPhone maker is now reportedly turning its gaze on the TV streaming. The company is reportedly planning to launch a cable-killing TV app, as soon as late autumn, with one source telling the New York Post: “The platform is ready and it rocks.” The company is reportedly near reaching deals with major US networks ABC, CBS, NBC and Fox, as well as their local affiliated networks, to stream live TV to any Apple device.
While Apple was long rumoured to be developing a dedicated Apple TV set it seems that the company is instead focussing on providing a ‘cord-cutting’ service that allows users to stream content across multiple devices, from MacBooks to iPhones, as well as its Apple TV set-top-box. Apple recently cut the cost of Apple TV hardware from USD99 to USD69 and is expected to unveil an updated version of the product this year with a dedicated app store and rethought interface and remote.
As with Music streaming, Apple is responding to consumer shifts to subscription packages for access to digital streaming across multiple devices and while making deals for content, especially sport, is difficult in TV, there’s a lot of money up for grabs.
Apple’s interest in TV streaming has been clear for some time, however, negotiations with networks have been hampered because the major networks do not have control over their local affiliate networks feeds. Instead of hopping around the US brokering deals with hundreds of local networks to stream their services, Apple reportedly asked the major networks to go out and get the rights to negotiate with Apple for them. The New York Post claims this is almost complete and could soon allow Apple to stream local TV feeds live all across the US. The networks meanwhile will gain access to added revenue generated by subscriptions to Apple’s service.
Following on from its newly launched music offering Apple’s TV streaming app will see the company push further into subscription models, reportedly charging somewhere between USD10 and USD40 per month, with Apple taking a 30% share of subscription revenues.
While other digital TV offering are already available from the likes of Sling or PlayStations Vue, Apple is also hoping to offer users access to cable TV channels. Earlier in the year it announced that HBO would be available on Apple TV, but now it hopes to secure Discover and Disney – including its ESPN subsidiary for its service. However, a major selling point for the service would be live sport and last week CEO Tim Cook and head of service Eddy Cue where papzed at the Sun Valley media conference talking to NFL Commissioner Roger Goodell and New England Patriots owner Bob Kraft. The NFL is notoriously careful about where its footage is shown, but if Apple can win the league over it could prove a huge money maker.
Devices And Services
It’s often said of Apple that its digital services, such as iTunes, exist, primarily, to encourage sales of its hardware. However, while there’s no denying its devices, especially the iPhone, that make Apple as valuable a company as it is, it’s software and services are becoming more than features to differentiate its smartphones. Subscription-based streaming service needs one thing more than anything else to become profitable – scale.
The decision to make Apple Music available on Android devices highlights the company’s desires for Apple Music not just to exist as a nod to the firm’s legacy in digital music, but for it to become the world’s dominant streaming platform and one that boosts, rather than detracts from, the firm’s bottom line.
Its efforts in TV streaming are similar. While a compelling launch could drive up sales of a new revamped Apple TV and it’s not yet known if the service will be available on Android devices, a move by Apple into a TV service that can properly challenge cable subscriptions could prove hugely lucrative.