via washington post
Television viewers have long yearned for the day they could get their favorite programs streamed online without having to pay a huge cable bill each month. That day has arrived — and it’s confusing.
There’s the new Sling TV, starting at $20 a month, which offers channels like ESPN and HGTV. Then there’s a CBS app for $6 a month with network shows. HBO is spinning out its offerings into a new streaming service called HBO Now for $15 a month. Add on top of all that older options like Hulu, Netflix and Amazon Prime.
Viewers of all ages are moving away from traditional TV faster than ever. But for people who want to “cut their cords” and drop cable, it’s not necessarily clear what to do next.
There is one powerful company, though, positioned to clear up all the confusion later this year: Apple.
Apple is in negotiations with major TV networks to bring a package of 25 channels to users of its devices for about $30 to $40 a month, as first reported by the Wall Street Journal and Re/Code. Apple’s TV package will be available as early as September and could include Walt Disney’s ABC and ESPN, CBS and Fox. Add HBO Now, which will be available to Apple users for $15 a month starting in April, and the tech giant could have the most complete streaming offering of live popular TV shows and movies yet.
If it succeeds, Apple could become the biggest gateway to online video — the new Comcast for the Internet. And it has more cash on hand than any of its rivals to secure the most-desired shows.
When Apple chief executive Tim Cook announced the HBO Now deal earlier this month, he said, “Apple TV will reinvent the way that you watch television, and this is just the beginning.”
The decline of traditional television has been years in the making, but it has dramatically accelerated in recent months. The cable business is at its weakest point in years. Subscriptions have declined, and new federal rules protecting net neutrality limit the ability of companies like Comcast to charge other firms more for faster streaming to viewers. Meanwhile, watching television through streaming services like Netflix and Amazon has become mainstream — reaching 40 percent of U.S. homes, according to Nielsen.
All that pressure is causing the biggest networks to reconsider their allegiance to the cable industry, which for years has provided the channels the vast majority of their revenues through licensing fees. Cable stocks dropped sharply Tuesday on the reports of Apple’s streaming plans.
“The writing was on the wall, and there has been a huge watershed moment over the last year with major networks quickly unbundling from cable companies,” said Brian White, an analyst at Cantor Fitzgerald.
That’s ushered in a new wave of players in the massive TV landscape, from Facebook’s partnership with the NFL and ABC’s “World News Tonight” to Snapchat’s short videos from ESPN and Comedy Central. Apple, which has flirted for years with the idea of a TV service, has drawn great interest, with potential to transform video entertainment in the same way it did with music through its iTunes store.
When Apple co-founder Steve Jobs introduced the iTunes store and iPod music player in 2001, the company upended the music industry by offering individual songs instead of entire albums. That led to a surge in digital music purchases and helped support the industry in its battle to combat music piracy.
A streaming television could be Apple’s next big act, giving the company entry into a new media field that could help it sell more hardware, such as the Apple TV device, iPads and iPhones.
Analysts think the company could also introduce an entirely new TV product that would run the company’s operating and feature its voice-recognition service, Siri.
“Apple wants to transform the entire TV experience, and this would be one piece of the puzzle,” White said. “We expect a full-blown new Apple TV that pulls on the company’s entire ecosystem.”
The move into video entertainment is a direct shot at rivals Amazon and Google, companies that have invested billions of dollars into their streaming services.
“Apple is a strong brand and does things beautifully. Their number one goal is to sell devices, not to be a big player in video and so they don’t expect to make a big profit in this service,” said Deana Myer, an analyst at SNL Kagan.
Yet the firm will enter an already crowded space. Dish’s Sling TV launched in February with 17 channels, most notably including ESPN. Later this year, Sony is expected to launch its own streaming package with dozens of channels including Viacom’s MTV and Nickelodeon.
The irony is that the future of TV may begin to look a little like the past. Channels are being bundled into packages again, albeit smaller and cheaper for now.
“What all these services have in common is that they are all simply re-aggregations of traditional cable and broadcast networks,” Craig Moffett, an analyst at Moffett Nathanson Research, wrote in a report this week. “Our sense remains that we are still looking in the wrong place for disruption. The real revolution is likely to come from outside the traditional ecosystem. . . . The millennial cord cutter isn’t waiting around for just the right package of cable channels that only their parents watch.”
Photo credit: Apple chief executive Tim Cook speaks during an event last week. Apple’s much-hinted-at TV service may soon become a reality. The company is talking with programmers to offer a slimmed-down bundle of networks this fall, according to media reports. (Robert Galbraith/Reuters)