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For those of you following the saga of authentication, rumors from Apple today may bring a refreshing new twist to the effort to bring cable television content online.
According to sources who spoke to AllThingsD, Apple is trying to talk the networks into streaming their content in the iTunes store and charging users $30 a month. The monthly subscription service would not be tied to any hardware like Apple TV, but deliver televiswion programs through iTunes' multimedia software. The news should shake the cable companies in their boots a little.
There's no proof that Apple can pull off this deal (Apple hopes to go live with the service next year and so far no networks have publicly signed on). But if the company can convince enough of the networks to sign on, this could be a huge loss for the cable companies.
Apple already has 100 million iTunes accounts connected to credit cards and currently sells access to movies and television shows, so offering current programming would not be much of a stretch at all.
The bigger issue is whether iTunes customers would be willing to trade in their pay-per-view model for a new subscription.
A recent study from Interpret Research found that 89% of “online television streamers” also subscribe to a cable or satellite service. 72% of active streamers use the web specifically to catch up on broadcast TV episodes they missed.
The cable companies are already working on a plan to stream cable content, and that effort — "TV Everywhere" — will be free to current cable subscribers. That means that when it launches, cable subscribers will get additional features for their current monthly fee. It isn't likely that many video viewers will also pay Apple for online content. However, viewers who are tired of dealing with their cable company could easily drop their terrestrial TV subscription for online. Or, new customers who have avoided cable could be drawn to the service.
For that reason, cable companies aren't going to like something like this. They see "TV Everywhere" as a means to retain cable subscribers offline and don't feel that subscribers want online only on-demand programming. Comcast CEO Brian Roberts says "the data does not suggest that people in mass want to do that."
But refusing to offer viewers options that are easily achieved is going to be problematic for the "TV Everywhere" plan. Even if people don't want to subscribe for a $30 a month plan in the iTunes store, there are other ways of getting the content online. The networks are eager to find new ways of bringing in revenue and plenty of online viewing channels — like YouTube, Netflix or Hulu — are set up to stream television content and charge or advertise against it.
Even if Apple doesn't succeed in its bid, the cable companies' monopoly on cable content is not going to last. An executive briefed on Apple's plan tells AllThingsD:
“I think they might get it right this time."