Take this with a pinch of salt, but we’ve been tipped that Apple’s rumored $1 TV subscription service, due to be unveiled next week, is technically correct but missing an important detail.
Instead of renting individual TV shows for $1, customers will pay $1 a month for ALL EPISODES of that show. In other words, fans of CBS’ “Big Bang Theory” can get all episodes of the show as long as they continue to pay the $1-a-month access fee. It would cost $12 to watch the show for the whole year.
The tip comes from someone with connections inside Apple.
If true, the plan sounds like something Apple might do. It’s simple and easy to understand, and the extremely low price tag would likely attract large numbers of consumers. And it would be a big boost for the new, low-cost AppleTV that Apple is rumored to be revamping next week, renaming it iTV and having it run the iOS, the same operating system used on the iPhone and iPad. It will be priced at just $99.
In some ways, it makes more sense than a $1-a-show rental plan. Many of the shows are already free on sites like ABC.com or Hulu — albeit with ads.
Perhaps most importantly, the $1-a-month-plan is not a subscription plan, but it’s pretty close. Last year, Apple tried to offer a video subscription service, according to reports, but couldn’t get the networks to sign on because they wanted to protect rebroadcasting deals. The networks — CBS, ABC, NBC and Fox — make considerable revenue from allowing cable partners like Comcast and Time Warner Cable to rebroadcast shows.
Apple at the moment sells shows a la carte or by season, which studios and networks see as incremental income and not harmful to rebroadcasting deals. However, at $2.99 a show, and $20-$70 a season, consumers haven’t been rushing out to buy an AppleTV.
Apple’s $1-a-month-plan would be an interesting mix between a subscription rental service and an a la carte system. It may be an important stepping stone towards a more comprehensive subscription plan that would offer bundles of shows for a monthly fee.
On the other hand, $1 a month seems very cheap. This would be good for Apple, of course, but it’s not a lot of revenue for studios. But many are already giving away these shows for free on Hulu and their websites.
Media analyst Van Baker of Gartner thought it sounded crazy: “It doesn’t sound reasonable,” he said. “I don’t ever see studios going for that.”
Baker said he thought it more likely that Apple will continue to offer TV shows for purchase and may add show rentals a la carte. Apple may also be allowed to offer archives of older shows for a monthly fee, but not as low as $1.
“It’s a safe choice,” he said. “It’s incremental revenue and it’s not going to upset (the studio’s) partners.”
UPDATE: This story has been revised slightly to better explain the $1-a-month plan. The story incorrectly stated that $1 gives access to all shows aired during a month. Instead, $1 gives access to all episodes of the show as long as the monthly access fee continues to be paid.