Apple is gauging interest in an over-the-top service from its iTunes store with network and cable programmers, but it could face an uphill battle on gaining the content to provide a meaningful service.
All Things Digital reporter Peter Kafka wrote that Apple is looking at starting a $30-per-month service early next year if it can get buy-in from content owners such as broadcast and cable networks. Instead of using Apple’s TV box, which has largely floundered, Apple would offer the service through its iTunes store and software, which Apple re-tooled last month.
Kafka wrote that Disney might be willing to bite on the service based on its past experiences with iTunes and the fact that Apple CEO Steve Jobs is the largest single shareholder of Disney based on Disney’s acquisition of Job’s Pixar in 2006.
But cable programmers may not be willing to take the plunge given their existing relationships with cable operators. Comcast has 25 programmers signed up for its On Demand Online trial, while Time Warner Cable is launching Internet videos to its subscribers from Turner portals TNT and TBS.
Cable programmers would need to be convinced that the additional revenue stream from Apple would be worth risking their relationships with other content distributors such as cable operators.
Apple needs to come up with a monetization plan, which would include advertising, that doesn’t water down content owners’ existing revenue streams. What Apple does have going for it is 100 million customers for its iTunes store.