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  • Is the Apple TV Subscription Service a Dead Deal?

    February 12th, 2016

    When outspoken CBS CEO Les Moonves essentially confirmed the existence of a pending Apple subscription TV plan last spring, that was all it took. It confirmed speculation that all this talk about Apple doing something marvelous to conquer the living room seemed to be coming together.

    Or maybe it implied too much. But when someone suggests that, “Apple TV is trying to change the universe a little bit,” it gave everything far more weight. Maybe it wasn’t just a slim TV channel package, but something more.

    Later quotes from Moonves made it clear Apple was talking to the key players in the entertainment industry to attempt to put something great together. Everything seemed to be coming up roses, until it wasn’t.

    So those talks appeared to have stopped at some point in time. Moonves is quoted by CNN/Money as saying that, “we haven’t had recent conversations with them.”

    First the hopes, then the dashed hopes. So is that all there is?

    Well, all this TV related action actually dates back to Steve Jobs’ comments in his interviews with the author of his authorized biography about cracking the secret to the greatest TV interface ever. Aha! So Apple was planning to get into the business of making TV sets, smart TV sets with an Apple twist. But would they be sold at Apple Stores, or big box retailers? You’d think the latter, because TVs can get mighty big nowadays.

    At the time, it appeared the other TV makers were freaked. I recall an announcement at a CES where no less than Lenovo, a top Asian PC maker, decided it must build a TV too, or at least it demonstrated one, but it doesn’t appear to have gone anywhere. The value proposition of getting into the TV business is questionable. As with PCs, TV makers are racing to the bottom with larger sets at cheaper prices. Profits can be slim to none. There are large entrenched players who sell most of the volume product at different price levels. Is there room for another player?

    I suppose there might have been with Apple, since the company builds premium gear at somewhat higher prices, and thus earns large profits. But if there was ever going to be an Apple smart TV set, maybe it was stillborn. After rumors kept leaping other rumors about what was to be, the chatter seemed to fade away. Perhaps Apple built some prototypes, but didn’t find the value proposition in taking them to production.

    For 2016, TV makers are making a huge 4K push, to entice you to buy a new set with the promise of four times the resolution. Unfortunately, it takes a large set to really reveal the difference, unless you look fairly close. But 4K, and higher list prices, are meaning more profits for the struggling TV industry. This year, picture quality improvements may be easier to detect with the arrival of Ultra HD Premium, which adds superior contrast and color rendition to deliver a picture that pops even if the screen size isn’t large enough to otherwise show a 4K advantage.

    Add to that Ultra HD Blu-ray, and perhaps enough content to satisfy people who are buying the new sets, and maybe it’ll come into its own this year.

    But what about Apple? Well, I’ve been somewhat skeptical about the new Apple TV, and disappointed the first model came with a few features that were lacking, such as support for Bluetooth keyboards, but the software continues to improve. Alas, it doesn’t support 4K, but maybe a firmware update will switch it on. Or perhaps Apple doesn’t care, or doesn’t feel the standards are yet fine-tuned enough to fully embrace the technology.

    So where does that leave the so-far stalled Apple TV subscription service? Well, it’s clearly not just a rumor. The CEO of CBS is clearly a no-nonsense executive who isn’t going to talk out of turn unless he knows exactly what’s going on. It’s not that he’s actually released any details, just that plans existed and were talked about, and then not talked about.

    What Apple wanted to offer — and maybe still wants to offer — was supposed to be a slim package of TV channels. But what’s so unique about that? There’s basic cable/satellite and there’s Dish Network’s attempt at streaming known as Sling TV, which would seem to fit in the mold of what was expected from Apple. But I’ve not heard of it doing great guns. Indeed, I wonder about TV streaming services in general outside of Netflix, or perhaps Hulu. HBO NOW, launched with great fanfare last summer first on Apple TV, hasn’t done so well. So far, there are 800,000 subscribers. HBO wanted, and was expected, to attract more subscribers.

    So is there even enough business out there? Are there enough cord cutters who are willing to sign up and give a new Apple TV service a try? Besides, what does Apple offer that you cannot already get with a slimmed-down cable/satellite plan? If you sign up for one of their 12-month or 24-month introductory bundles, you can get a lot of content for not a large amount of money. Until the offer expires, of course.

    How does Apple make a difference? A prettier interface? Some new ad-skipping scheme? Well, no wonder they had problems striking deals; at least if that was the case. Was it true that local channels would also have been offered as part of the package?

    Cable/satellite growth has stalled. More and more people are rejecting high prices and rigid plans. The catch-as-catch-can cord-cutting schemes will save you some money if you don’t add too many services. Saving money is good, but how much great programming are you giving up to be thrifty? Can the cable/satellite companies find a better way to reignite growth and, for once, offer customers a better experience?

    Where does Apple fit in all of this?



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