With TV à La Carte Just around the Corner is Apple's Entry into the Online Video Distribution Business Too Little, Too Late?
Mediatech Capital Partners' Porter Bibb was on Bloomberg TV yesterday and downplayed Apple's next move into TV bundling. Bibb stated: "I think Apple is 'too little, too late,' and the cable industry is really not bothered by Apple's entry." He later added that Apple has been fooling around with television for over a decade and that Apple TV was a consumer product failure.
More importantly, Bibb stated that "The next big shoe to drop is that the cable industry will be breaking up the bundles, it'll all be a la carte, and that will really put a stop on all of these streaming services. Because if you can pick the three, four, five channels that you want on your cable system and pay for nothing else, that's going to be a very compelling consumer proposition."
The conclusion was that the Online Video Distributors (OVD) like Apple TV are late to the game; so it's too little, too late – because cable offering TV channels a la carte will kill most of these new streaming services in a hurry.
Of course, Mr. Porter Bibb isn't aware of what Apple's strategy-to-market will be. Apple could introduce new yet unknown components that could make their bundling more exciting. Apple isn't fond of being a market follower, so it's a little premature to write-off Apple's next move for Apple TV just yet.
Apple could introduce their own unique Music Channel using Beats talent and they could certainly buy a TV Network if need be to rock the market. I think that we could all agree that they certainly have the money to do that and deliver a TV with Siri and 3D gesturing controls. Apple, unlike these other puny video services, has a lot of options that they could uniquely bring to market in one surprise event that could be explosive.
So is it really too little, too late for Apple regarding a new TV Service? While the jury is still out on this one, I think not. Yet Bibb may have, at least in part, gotten it right when it comes to the cable companies countering these new video services by offering a la carte programming or new bundling deals of their own. Such a move would have the potential of watering down any advantage these new video services could have.
Yet Apple is likely a head of the curve on this development, not behind it. So if Apple decides to throw their hat into the ring, we could expect some surprises that the pundits can't even imagine today. Yet the question now is, will TV a la cart actually become a reality after years of speculation? Yes, it's beginning to look that way.
TV a la cart is Coming to Canada in 2016
Bibb is obviously in the loop on what the cable industry is preparing to do, as TV a la carte is coming to Canada by the end of 2016. And if Canada is going that way, then you know the U.S. cable companies will be announcing a similar move in and around the same time frame. Canada gets most of their programming from the U.S., so the announcement is just a sign of what's in the pipeline.
The new Skinny basic will look like this: By March of 2016, every TV provider will be forced to offer a smaller basic TV package capped at $25 per month. It must include all local and regional stations, public interest channels such as the Aboriginal Peoples Television Network (APTN), education and community channels, plus provincial legislature networks. If distributors want to, they can add national over-the-air stations like CTV, City and Global, or U.S. networks ABC, CBS, NBC, FOX and PBS. But they cannot raise the price.
The new Pick-and-Pay service will look like this: The actual unravelling of channels will happen in two phases. Starting in March, 2016, every channel outside the "skinny" basic service must be available either a-la-carte – with a fee for each network – or in small, "reasonably priced" packages. Those can either be build-you-own packages put together by viewers, or pre-assembled groups of five to 10 channels chosen by the distributor. By December of 2016, every channel must be available both as a standalone choice and in a small-sized bundle. Providers can still offer existing theme packs, such as sports or comedy stations.
Television viewers will be able to buy only the channels they want, one by one or in small packages, the federal broadcast regulator said Thursday. By the end of 2016, TV subscribers will have the option of adding those networks to a slimmed-down, "skinny" basic package costing no more than $25 per month.
But not everyone likes this, least of all Viacom. American firm Viacom has called pick-and-pay a "consumer welfare destroying death spiral," and told the Commission it would consider withdrawing from Canada – and perhaps returning with an online streaming service contributing no revenue or tax to Canada – if the CRTC's regulations became too burdensome. Expect to hear Viacom echo the same thing in the U.S. if a-la-cart is forced on them.
This is the latest in a series of rulings coming out of Let's Talk TV, a sweeping hearing the CRTC held last year to consider changes to the future of Canadian television, which put many of the TV industry's sacred cows on the table. You could read more about this here.
No matter how this plays out, it may the consumer that will finally get a break from their spiraling cable bills – even if Viacom kicks and screams blue murder. I've recently cancelled many of my TV tiers because I was simply fed up paying for garbage that I never watched.
Hopefully relief is on the way and just maybe Apple has a rabbit that they could pull out of their hat to make this next level for television viewing a lot more fun to look forward to.
When I look back at Tim Cook's beaming face talking about the future of television back in December 2013 with NBC's Brian Williams, I'm more confident than ever that what Apple has in store for TV in the future goes far beyond the myopic narrative of today surrounding video bundles. Yes, it's time once again to Think Different.
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