In a move that's long overdue, Bloomberg reports that Apple
Apple is reportedly in advanced talks with News Corp.'s
Apple already offers digital rentals for theatrical releases. It's been doing so for more than two years. Why did it take this long for Apple to take the evolutionary step into offering piecemeal episodes on a temporary yet commercial-free basis? There are two reasonable explanations.
- Price points matter. Apple sells new full-length flicks for $15 (or $20 when available in HD). Rentals at $4 make competitive sense. However, it's already selling episodes for $2 (or $3 when available in HD). Rentals had to be at the $0.99 price point, even though they are chunkier data files than similarly priced music tracks.
- Freely available streams are common through Hulu and even many of the network sites. When Apple rolled out its iPad earlier this year, it's no surprise that the two most popular third-party applications were Disney's
(NYSE: DIS)ABC Viewer and Netflix (Nasdaq: NFLX).
Why now? Well, if the rumor mills are on the mark -- and Apple is readying an iOS-based Apple TV set-top box at a competitive $99 price point -- it may as well make give couch potatoes the cheaper temporary programming that they covet. Since Google
Consumer familiarity with the iOS platform that's already in play in iPads, iPhones, and iPod touch devices will help, but it's going to take more than that since folks obviously aren't going to be tapping and pinching their television monitors to navigate through their home theater setups.
The availability of $0.99 digital rentals is going to make it harder for cable, telco, and satellite television providers. The pay television industry recently suffered its first quarterly decline in subscribers. Now Apple steps in with another reason to cut the cord on those $100 cable bills.
Buried deep in the current "Web is dead" issued of Wired -- on page 142, for those digging at home -- Erin Biba breaks down the cost of a traditional cable package through Comcast
The winds of change are blowing, even if I think Apple has an uphill battle competing against free ad-supported streams.
Are you planning on getting an Apple TV or Google TV box this year? Share your thoughts in the comment box below.
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Longtime Fool contributor Rick Munarriz is getting so close to axing his cable company. He does not own shares in any of the stocks in this story, except for Disney and Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it knows that roaming charges weren't billed in one day.