Some in the industry may see this coming.The latest hint that service providers are in a consolidate or be killed mode is the rumored deal between DirectTV (DTV) and DISH (DISH) Network.
A pairing of these two clearly would not lower prices for consumers. Assuming you don’t negotiate monthly, most DirectTV packages cost over $100 monthly. For their part cable companies bundle packages with Internet and other services, but television service is typically around $80 without premium upgrades.
Consumer frustration of creeping prices is already evident. What if someone only offered the networks we wanted and had the inside track on the crown jewel?
The diamond in the middle of the broadcasting fairway is of course ESPN, owned by Disney (DIS) and run by Bob Iger. Hmmm, it seems as if Apple might be able to strike a deal with Iger, who sits on their board, and who has been inking deals left and right lately for original content. Seems like he’s in a dealmaking mood doesn’t it?
Iger is squeezing every last penny out of the laundry list of Disney franchises. Would he be willing to sell the rights to broadcast his channel lineup to Apple for $6 a month on a new Apple TV offering?
Seems pricey when compared to all of NFLX and their monthly rate but they do offer LIVE sports, the only programming left that can reliably offer eyeballs to advertisers. Disney currently collects between $4.50 and $5.00 a subscriber from cable and satellite providers.
In comparison, TNT is second on the list, charging around $1.25 a sub depending on who you believe. It’s notable that TNT and TBS are also home to live sporting events.
With many networks offering programs for free on their website and the combination of a “season pass” to many desirable shows available on iTunes, it doesn’t take a rocket scientist to figure out Apple could beat current pricing while making the overall television experience much better. It seems like a decent lineup, managed from your fingertips could easily be attained for less than $50 a month.
Imagine if you could opt in and out of networks monthly? Maybe you only want to pay for Disney’s lineup during football season. Check the box for six straight months, save $6 a month the other half of the year.
The idea of a-la-carte pricing is not new, but it seems possible here as Apple would have the resources and infrastructure to pull such a service off. Why do they keep expanding their vast data centers anyway, just for iCloud? That seems unlikely.
There would certainly be holes in programming, but a patchwork of offerings from Sunday Ticket and others of the same ilk could come in line in the years ahead as exclusive contracts with other providers run their course.
Imagine if Apple had spent $11 billion in 2010…on the NCAA tournament for broadcasting rights over 14 years. (That’s what CBS and Turner paid)
It seems to me that might offer a better ROI than a text messaging service bought for $19 billion.
Apple has the technology, software and most importantly, an ample cash hoard to compete for content rights. What are they waiting for?