Apple's Missed Opportunity With its TV Streaming Service

Apple has been pondering, if one can read between the lines of Tim Cook's previous statements, how to improve the TV viewing experience. The recent report that Apple has been talking to most of the networks about a new streaming network service reveals something troubling. Apple could be doing something much better for its customers.


When The Wall Street Journal leaked the news that Apple might be in talks to launch its own Web-based TV service this fall, it seemed that Apple had perhaps found a desirable vehicle to expand the attraction of the Apple TV. Apple has sold 25 million Apple TVs to date, so why not leverage it to the hilt?

It was welcome news at first because the rumored fee of US$20 to $40 per month might help many people cut the cord and lower their monthly TV bills.

The Unfortunate Details

Then, on March 17th, the New York Post added some crucial details credited to "sources familiar with the talks."

The company [Apple] is willing to share details on who its viewers are, what they watch and when they watch it to entice broadcast networks and others to go along with the service... The information could help programmers better target shows to viewers and advertisers....

This part isn't very surprising. The days are gone when you can watch cable/satellite or Internet TV without your preferences and interests tracked. See Dave Hamilton's: "Relax, Your Apple TV Viewing Data Is Already Being Shared."

The Interesting Part

The Post goes on to state that Apple is bending over backwards, allowing the content owners to decide if they want to air ads.

This created a bit of a problem for me because I frankly like the Netflix business model when combined with iTunes. While Netflix doesn't have everything one might want, the company lets me pay for ad-free content, and I like that. Moreover, if I want to buy a very recent TV series I can pay good money to buy the shows or a whole season on iTunes. There again, I can opt to pay for an ad-free experience.

For me, an Apple TV network streaming service wouldn't be helpful at all. Especially since it reportedly won't include NBC Universal content, which not only includes NBC TV but also SyFy, USA Network and NBC Sports Network to name a few.

A Better Solution

In chatting about this article before publication, our Dave Hamilton suggested a better approach. If Apple really wants to improve our viewing experience, why not insist on keeping this service ad free, like Netflix. Sure, it would drive the cost up for customers, but I think it would be within the parameters of the revenue generated by ads, and that would make all parties happy.

Plus, I know that millions of people have bought many, many complete TV series from the iTunes store and paid a rather healthy $2.99 per episode. I certainly have. With the proposal above, the networks will make their money another way, a way that has shown to be something people like: no interruptions.

According to the reports, what Apple wants to offer is nothing different than a lower cost, more restricted version of what we have now via cable/satellite except for the the loss of NBC Universal content. Even Apple will find that to be a hard sell.

In my opinion, going without ads—and charging more because of that—is a value proposition Apple can make (and has always made) in the name of avoiding ad interruptions and making the TV viewing experience better for its customers.

I suspect that's what Tim Cook wanted all along, and he should make it happen.