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Will Apple Streaming TV be a Cable-killer?

March 24th, 2015 Posted by 2015, Blog          

streaming video, video streaming, Apple TV, Apple Streaming TV, mobile video, mobile video apps

Don’t look now, but Apple’s about to upset the streaming TV apple cart.

The company is apparently getting ready to launch its own subscription-based Internet TV service. According to rumors, Apple will strike deals with several major broadcast outlets, including CBS, ABC, and Fox, to add 25 new channels to Apple TV. Business Insider estimates the service could see 10.7 million subscribers by 2018.

Everyone knows what happens when Apple gets serious about entering a market. It wasn’t so long ago that Apple transformed the music industry through the introduction of iTunes. The iPad basically started the tablet revolution. And when the company released larger iPhones last year, it immediately became a leader in the “phablet” category.

Unlike what Apple did with music, however, there are already many other companies that have paved the way for streaming TV consumption. Consumers are not only used to watching TV online, in many cases they prefer it, because it gives them the chance to watch content across devices and whenever they want. Given this already robust adoption, it might be even easier for Apple to put a dent in the status quo, because the company does not have to drum up demand.

In fact, there’s so much demand for streaming TV services that it might actually be beneficial to cable operators if Apple does enter the market.

Consider that a streaming TV service from Apple will provide consumers with yet another online viewing option. In addition to Netflix, Amazon, and Hulu, major broadcasters are already offering or preparing to offer their own standalone streaming TV apps. Sony’s PlayStation Vue service also offers video streaming, and Sling TV is delivering live sports to its customers, in the process removing perhaps the biggest cord cutting barrier.

However, as psychologist Barry Schwartz wrote in his book The Paradox of Choice, sometimes having too many choices can create anxiety for consumers. It can cause them to go back to the simplest option, and, often, that’s the one they’re most familiar with. Which is exactly why I think having so many streaming options – even one from a monolith such as Apple – could potentially help cable operators solidify their positions within this exploding marketplace.

To illustrate, take a look at this graphic from The Wall Street Journal, which provides a sense of the scope of the streaming TV landscape:

3.18.15-WSJ-TV-Table

While this fast-growing market does offer choices, it also presents some challenges for consumers that are best addressed by traditional cable TV. Consider that:

  • Consumers will ultimately have to make choices about which streaming services they are going to use. No one is going to subscribe to 10 different services, even if they offer unique content.
  • Subscribing to multiple services may end up becoming more expensive than a monthly cable bill. This nullifies the “saving money by cutting the cord” argument.
  • Consumers will still need an ISP to be able to take advantage of any of these services. Cable operators are getting very aggressive with the roll out of high speed Internet service in many markets, with fiber options topping 1000 megabits per second. Streaming TV consumers will need that bandwidth, and they’ll be able to get it through their local cable provider at a bundled, discounted rate.

Still, an Apple TV subscription service should not be taken likely. Cable operators will need to become even more aggressive on their commitment to providing streaming solutions through different forms, including via mobile devices. Apple’s going to do everything it can to take advantage of the segment our vice president of marketing wrote is “the fastest growing category of data-consuming activities on the Internet.” Therefore, you can be sure that the company will do everything it can to bring the service to iPhones, iPads, and more.

For right now, though, cable operators can take solace in the fact that they are still the best “one stop shop” for millions of consumers. If you’d like to learn more about the unique work we’ve done for cable and media companies in the mobile experience space, including video streaming apps and in-app video chat, drop me a line!

Cheers,

D.P.

@DPVenkatesh

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