Hold on to your credit cards, Apple TV may spur pay per view.
Would you spend 99 cents to view your favorite TV show? Hold on to your credit card. Pay to play is here.
The latest entrant is Apple’s TV box. You pay $99 for it. That gives you access to Apple’s pay entertainment and the right to “rent” TV shows for 99 cents. Movies are $3.99.
Apple is late to the party. They tried a $229 box that failed. It needed to be connected to an Apple computer, an inconvenience. The new Apple TV box needs nothing but a single HDMI cable and a compatible TV set.
The box attracts attention for what it does not do. It cannot record and time shift TV. It does not create or revolutionize the market for on-demand TV. It might increase it, depending on customers willing to pay the $99 for access.
The 4-inch Apple is an electronic bridge, not a storage device such as the cable digital video recorders in use by the millions.
Apple TV does connect with Apple devices such as the iPad and iPod Touch music player. For a consumer heavy on the Apple gear, the TV box may make sense. You could start a rented movie on your TV and keep watching it elsewhere with an iPad. That may be the box’s biggest attraction.
Apple’s entry caused a ripple in the entertainment industry, not for what it does but for the marketing muscle behind it. There are about 40 TV boxes out there, many from obscure companies that market mostly by word of mouth or social networking.
The little guys responded fast. Roku dropped the price of its low-end box from $99 to $60. Others are expected to compete with or beat Apple’s price point.
The Apple’s most unusual feature is it displays images and plays music from other Wi-Fi devices. You can watch your home movies and photos on your big screen. Still, none of these are new uses.
Amazon quickly lowered the price on some of its TV programs from $1.99 to 99 cents. These are downloads customers save on their hard drives. They then own them, compared with Apple’s one-time rentals.
The TV-show rental business faces one huge obstacle: Viewers can watch a lot of TV for free or for the price of cable TV. They can save the programs for later on their DVRs. There are many program choices that do not cost extra, such as free shows on Web sites.
Pro sports may be the salvation of for pay per view. Teams would love to get per-game cash from television viewers, similar to buying a stadium ticket. This might be the opening for a gradual move from the free games on national networks. Football and baseball are beginning to control their own access to broadcasts via their own TV networks.
TV boxes such as Apple’s offer a way to automate payment for watching shows. The only way to save money would be to cancel your premium cable channels and use some of that money to rent or download your shows.
Broadcasters based solely on advertising are profit squeezed. Rupert Murdoch last fall told a shareholder meeting that programming no longer can be supported solely by advertisers. He didn’t say it, but there’s no other big profit source beyond viewers’ credit cards.
Contact Jim Hillibish at email@example.com.