Cable TV is Over. Long Live Apple TV

The last time the Apple computer company set its sights on selling any kind of digital entertainment, it took over the industry and sent all the established players packing. We're talking about iTunes and digital music, of course. The new goal at Apple is TV distribution; and Apple has a good start now with Disney and CBS on its side, and others will possibly soon follow. The idea is to provide to people a viable alternative to the much-hated cable operator, or services like DirecTV, that seem to be going the way of cable TV, taking advantage of customers with unfair trade practices. Apple wants you to watch TV on the Internet. Apple is really good at entering an established market and turning it over on its head; and established cable TV distributors like Time Warner and Comcast, that serve 90% of homes in the nation are beginning to watch their backs.

Letting Apple distribute channels the same way as cable TV does will not really upset the apple-cart for anyone. It is the way Apple plans to do it. The entire business model that the cable TV operators use that makes them profitable, is the fact that they never sell individual channels; anyone who wants a popular channel needs to subscribe to an entire bundle of channels, filled with a great deal of unwatchable fluff that no one would buy if they could possibly get away with it. These channels are like the B-side songs you had to pay for when you bought an album, before single picks became possible on digital downloads. When people are not forced to buy ten channels to get the one they want, all the niche channels like Fox's Fuel TV will have to either raise their prices to make up for the shortfall, or close down. And the cable distributors would have far smaller profits too. The channels and the distributors have always traditionally held that forcing people to buy channels they don't want is the only way to maintain a lot of choice in the market. Usually, it is a cable company that takes the fall for this kind of unfair business practice; in reality it is the channel that insists on it.

Apple's television venture is not even off the ground yet, and they are already changing the game. Time Warner is beginning to consider giving people smaller bundles to choose from. All the major networks are behind Apple TV, and they expect that their $30 a month service should be on your ethernet ports by early 2010. The major networks, ones like CBS, would really have nothing to lose by signing up. Fox with its large clutch of niche channels, could understandably have a problem. But iTunes could make a limited release soon, and as it gains momentum, everyone else could get on board whether they like it or not. It happened with music in the same way. The Beatles records, Madonna's records, none of these were available for download at first. They all came on board when they realized there was nothing else they had to say. Cable TV has had its day, it would appear. The subscription prices and the virtual 100% dissatisfaction with their captive customers did them in.

There are other Internet businesses threatening cable-TV just the same as Apple. Sony's PlayStation 3 consoles and their Internet-ready Blu-Ray players are able to stream TV shows now, and this could take off soon too. Maybe it's time to give the old cable TV guy a pat on the back and a thank you for a job poorly done.