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Apple Looking To Slice Up Cable 99 Cents At A Time

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The wheels are in motion. The rumors have persisted for a while now that a new Apple TV (soon to be called “iTV”) is approaching. It’s thought to be a cheaper, smaller version of the current device that puts an emphasis on streaming rather than storage. The killer app of such a device could literally be apps — as in, the iPhone/iPad/iPod touch variety. But don’t forget about the iTunes content.

While apps (and particularly games) will be great to have in the living room, that room first and foremost remains the place that people consume Hollywood entertainment. A ton of it. While Apple was successful in getting the music industry to bend to its will, they so far haven’t been able to do the same with Hollywood. But they’re going to need to with this new Apple TV. So now they’re apparently calling on an old friend in their latest attempt to make that happen: the trusty $0.99 price.

A report today in Bloomberg states that Apple is in “advanced talks” with News Corp. about a new television show rental program for iTunes. Viewers would get access to individual shows for $0.99 and they would be able to view them for 48 hours, according to the report. News Corp. is the parent of the Fox network (as well as other cable channels). Apple is also said to be in talks with CBS and Disney (which owns ABC, and counts Apple CEO Steve Jobs as its largest shareholder) for such a deal.

But such a deal is also a bit odd. After all, who wants to rent single episodes of TV shows? People usually watch entire seasons (unless they’re old shows that they’ve seen before). Currently on iTunes you can buy television shows either on a per-episode basis or by the season — but judging from the top lists, it seems as if people are simply buying individual episodes as they progress in a current season (perhaps they missed a show, or they’re simply buying each episode in a whole season individually).

So why not have a $10 to $15 option to rent a whole season? Well, perhaps Apple will, but it seems as if that was a sticking point in prior negotiations with the television networks. Why? Because they don’t want to piss off the cable companies.

Let’s say you have five television shows you religiously watch each year. If Apple sold a season pass rental to each for $15, that would be $75. Already, that’s cheaper than most cable packages. But cable packages are per month. That $75 would be for the five shows you really want to watch all year! Even if you double the number of shows, it’s still an insanely good deal. And the cable industry knows it.

Cable companies charge so much because they shove a bunch of content down our throats that we don’t want and are not going to watch. But they get money to bundle all this junk together from various networks who sell ads on all this content that people mindlessly watch.

But there’s a growing movement of people who are sick of this mind-numbing waste and are cutting the cord. But they need a simple solution. Currently, there are a bunch of somewhat convoluted solutions that work in concert with one another. This iTunes solution may be what a lot of people are looking for. A $99 device that cuts your bill from $1,500 a year down to $100 a year. Um, sold.

Unfortunately, this odd $0.99 per show rental system might be the only way Apple can convince the TV studios to bite on this right now. Undoubtedly, almost all of that money would be going to the studios to make up for lost ad revenue. But again, $0.99 is a killer price point for consumers. And it will still be a hell of a lot cheaper than cable.

Currently, to buy shows on iTunes it costs $1.99 for standard definition or $2.99 for high definition. Both are too expensive. Sure, you then own them, but how many of these television shows do you actually want to own? Most people buy them simply because they do not have the option to rent. Give them the option and they’ll start doing it.

Further, if people were forced to buy every show they wanted every year, they would very quickly run out of local storage space. That’s why the cloud is more vital for video than for music.

Now, I know everyone is going to shout about live sports and live news being two cable staples that an iTunes rental service wouldn’t replace. That would likely be true for now. But are those two things really worth over $1,000 a year to you? Why not just go to a local sports bar or a friend’s place for the games you want to see (or soon, use your Xbox). For the news, why not just read or watch it online and get it faster?

Will the $0.99 price point be enough to change the cable industry’s awful game? I don’t know, but it worked in music.

[image: Showtime]

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