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Is Apple Planning to Dominate The TV World?

July 13, 2010

The rumor that Apple would be taking on the cable & satellite TV market is almost as old as the rumor that Apple might release an iPod with a phone in it. As with most Apple unveilings, they are usually preceded by a huge surge in rumors and leaks. Are we seeing that surge today? While Apple was one of the first to offer downloadable movie and TV content from multiple studios, it has always been at a fairly steep cost and did not compete head-on with the streaming providers like Netflix and Hulu. Apple has recently only been entering markets where they believe they can grab a large market share on day one, so it's likely that if they entered the streaming media market, they would enter it in a big way. But, what does Apple need in order to do that? 1. A streaming interface and web portal accessible from all of Apple's devices 2. A massive amount of storage and bandwidth 3. The ability to get video content onto traditional viewing devices (HDTV's) 4. A subscription price point (or price levels) acceptable to consumers 5. Seamless transition between devices So how is Apple progressing towards these goals? Streaming Web Portal Apple bought streaming music service in December of 2009, then shut it down at the end of April 2010 with no real explanation given. It is very possible that it was shut down so the former company's engineers could go to work on merging LaLa's streaming services with iTunes. Storage and Bandwidth While Apple currently has two data centers, with it's newest one being about 100,000 sq. ft., they have been hurriedly building a new "secret" 500,000 sq. ft. data center in rural North Carolina. In an article on, they even have an aerial view of this massive structure:

Since Apple has historically been a provider of hardware and software,, they have had no need for a massive data center. With a data center of this size, Apple could stream every movie and TV series made in the last 50 years. Video on HDTV's While Apple has had the Apple TV set-top box for about three years, the $229 price and inability to stream content have held the device back from wide adoption. Competing devices like the Roku and the upcoming Google TV both price the hardware at around $99 meaning Apple would need to hit a similar price point. As seen on news sites such as Wired, Apple is rumored to be planning a revised  and simplified box that would run iOS. This would lower hardware costs as well as make the device much easier for both Apple and the consumer to adopt. An app for streaming video on the iPad would be the same app for streaming video on the TV. If Apple were to make a device like this, they would likely need a remote that is complex, but elegant and simple to use. It is very possible that the tiny touchscreen seen on recently, is meant to be the heart of this remote. A touchscreen like this could act as a click wheel for browsing titles, then change to playback controls once the title starts.

Pricing If Apple's video offerings moved to a streaming or rental format, as opposed to downloadable purchases, studios will be much more likely to accept less for access to their content. One rumor on is that Apple will change to a "rentable" format where you can watch an episode for $0.99, as long as you finish it within 30 days. This is similar to what Apple did with their movie content in 2009. The longest standing rumor, as discussed on AllThingsDigital, is that they will go with subscription pricing. Subscribers could access hundreds of episodes from multiple sources for $30 a month, with the possibility of premium content at an additional fee. With subscription pricing, Apple could position themselves as a real competitor against cable TV and satellite networks. Seamless viewing Lastly, since Apple is a dominant force in so many form factors, they would want the user experience to be the same across the iPhone, iPad, Mac, PC and TV. One way to accomplish this is by creating a service that keeps a list of your media, what you last watched and what you plan to watch next. To that end, there is a patent submitted by Apple for syncing media across the Internet, as seen on This patent was filed in 2009 and shows that Apple is clearly thinking about how to keep media and media states synced between devices.

So when might we see this "miraculous" strategy for Internet TV? Well, September has been a key month for Apple. It is when the iPod line is usually refreshed, and also when the original Apple TV was first shown. It stands to reason, with all of the rumors and other information coming out, that Apple may be planning this as their "one more thing" during their September announcements. What do you think? Would a $30 monthly price make you drop your traditional cable or satellite? Or have you already dumped those providers in favor of alternates such as Hulu and Netflix? Let us know in the comments.

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