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Next Apple TV may hinge on 99 cent streaming TV rentals

updated 09:25 pm EDT, Thu July 8, 2010

Apple focusing on cheap TV rentals for Apple TV

A centerpiece of the next-generation Apple TV may involve cheap, streaming-only TV rentals, a rumor asserted tonight. Multiple sources understand that Apple would supplement its $2 and $3 episode purchases with 99 cent rentals that would be delivered only through an on-demand stream. As with movies when they reached iTunes, customers would have 30 days to start watching the rental but only 24 hours to finish watching once playback has begun.

The price drop, NewTeeVee noted, would have the advantages of boosting traffic and cutting Apple's own costs. Halving the effective cost of viewing a show would theoretically encourage higher volume. By leaving the TV shows on the servers, however, Apple could cut the Apple TV's storage down to its rumored 16GB of storage and drop the price of the box to $99, spurring on more sales and again making up for money that would have been generated through purchases.

A switch to cheaper but streamed video would come in sync with reports of possible iTunes music streaming and could mark a broad shift to remote access for much of Apple's previously download-only media. For TV, streaming could be critical as Apple's episode sales have likely been dampened both by the surge in web-based viewing and the rise of subscriptions as an alternative. Netflix is one of the most popular and has contributed to the downfall of Blockbuster, but Hulu's new Hulu Plus are more threatening still as they promise many current shows from popular devices, including the iPad.

Apple's economics for the as yet unconfirmed deal may revolve around cost. At 99 cents per show rental, an Apple TV customer could keep up with two TV series' episodes for an entire month while paying $8, not the $10 of Hulu Plus or Netflix. Frequent viewers would suffer, though, as keeping up with three or more programs would make iTunes the most expensive option.



By Electronista Staff
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Comments

  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000

    +7

    Sorry AppleTV

    You've been passed by with Hulu and Netflix, let alone cable providers' own DVRs which are still cheaper.

  1. bluejammm

    Fresh-Faced Recruit

    Joined: Jul 2006

    +7

    I agree

    I use my ATV quite often but admit it sucks. I'll prefer Netflix any day.
    What's with this 16gb deal. Personally, I purchased my ATV to play my own media through TV and optical out. I need well over 16GB!

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +3

    New territory for Apple

    I think the actual Apple TV box needs to be free before it will have a chance at real popularity. Just adding $.99 streaming TV shows won't make a real difference in hardware or content revenue for Apple. So, since it seems likely that the next Apple TV will run iOS, iAd revenue could subsidize the hardware.

    But even then, Apple needs to create a truly compelling product. Consumers can and do get the same HD content from many different sources: old-school DVD, Blu-Ray, pay-per-view on DirecTV or cable, or Netflix, or Hulu, or wherever. Simply providing an alternative with the Apple logo on it, like they're doing now, isn't quite compelling enough to make the big time.

    So what's compelling about other Apple products? Well, there's the elegant and powerful integration of software and hardware to produce a great user experience. But Apple TV already has that, and still no joy.

    This might sound crazy, but I think Apple needs to create their own original content, then deliver it through iTunes to Apple TV and other iOS devices. They'd need to either commission movies and TV shows or buy an existing studio. (MGM might be a prime candidate.) And if it's streamed, it'll be harder to pirate than a download.

    Sooner or later, Apple will need to move past the "profit from hardware margin" business model. Hardware prices are relentlessly dropping, like they have been for decades. They won't be able to maintain 30%+ margins forever. So original content might be one way to move beyond that model.

    And don't forget: Steve Jobs was CEO of Pixar until Disney bought it. Now he's the majority Disney shareholder. So he's got plenty of experience managing the creation of hit movies...

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +1

    not compelling

    Red Box is 99 cents per movie, and a movie is usually a lot longer than a tv show - plus more entertaining.

    Second issue - I can stream now - it's called broadcast TV, it's free, it's digital, it's high def.

    It's ashame they didn't do digital broadcasts years ago, so many of you are hooked on satellite and cable, you wouldn't think of returning to free, off-the-air broadcast tv.

    But it's not what you remember - the picture quality and sound is brilliant.

    Apple TV just doesn't do anything but add a cost, and it's not like TV was hard, and Apple was making it simple - TV is quite simple already.

  1. WiseWeasel

    Junior Member

    Joined: Apr 1999

    +2

    Meh

    $0.99 is much too expensive to stream a single TV show episode. Watch three episodes a day in your household, and you're up at $90/mo for something that won't really replace the selection of content provided by a cable subscription. Unless this is accompanied by all-you-can-eat subscription plans, it'll be stillborn. Still, as long as the content is DRM'd like the iTunes Video Store content, it might as well be rented for cheap instead of purchased for a higher price, since you never actually own it in any sense.

  1. facebook_Jeff

    Via Facebook

    Joined: Jul 2010

    +1

    Needs more...

    I understand if Apple doesn't want to take on the mess involved with supporting Netflix streaming, Hulu, and the like, but at the very least it needs to leave the door open for other developers to do so.

    My Apple TV breaks my heart. The quality is so good...Standard definition movie rentals look much better than my cable company's HD on-demand offerings. But it's so limited. Even with the available hacks, there's so much it simply can't do.

    If Apple puts iOS 4 or some variant on the AppleTV and creates an app store, I think there's a chance. If not, I'm going to have to throw in with Roku or the upcoming GoogleTV. (Or possibly a PS3.)

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