Content distribution shift continues

23Dec09

A further shift in the way we consume media is on the horizon. The WSJ rumor of Apple working with television studios to provide an ad-free subscription service would be a major shift for television content consumption. Such a model would further dis-intermediate content distributors such as Comcast and DirecTV. This rumor on the heels of the announcement of magazine publishers dis-intermediating the printing and postal distribution of periodicals, begs the question, what is next in the shift from traditional content distribution models?

Apple TV-Service Proposal Gets Some Nibbles

By SAM SCHECHNER And YUKARI IWATANI KANE

CBS Corp. and Walt Disney Co. are considering participating in Apple Inc.’s plan to offer television subscriptions over the Internet, according to people familiar with the matter, as Apple prepares a potential new competitor to cable and satellite TV.

The proposed service by the maker of iPhones and iPod music players could, in at least some scenarios, offer access to some TV shows from a selection of major U.S. television networks for a monthly fee, according to people familiar with the discussions. Apple is pushing to complete licensing deals and hopes to introduce the service in 2010, some of those people said. It is unclear whether any networks have signed on yet.

Spokespeople for Apple, CBS and Disney declined to comment.

If Apple signs up enough networks to launch a viable service—still a very big if—it could ultimately alter the economics of the television business. The service could undermine the big bundles of channels that cable, satellite and telecommunications companies, including Comcast Corp. and DirecTV Inc., have traditionally sold in packages to subscribers.

Comcast declined to comment. A spokesman for DirecTV said, “It’s difficult to gauge how competitive they will be without seeing the packaging, presentation and execution.”

Apple is dipping its toe into the cable subscription model, but still needs to sign up networks, Sam Schechner reports on the News Hub panel.

The video strategy is part of Apple’s plan to overhaul its iTunes store. The store currently sells downloadable music, video and applications like games, entertainment and productivity tools for its touchscreen devices, like the iPhone and iPod Touch. Apple recently bought music-streaming service La La Media Inc. as part of its plan to offer consumers more ways to access and manage their music purchases, according to people familiar with the situation. Similarly, the TV subscription service would be in addition to the way Apple sells individual TV shows.

Apple is revamping iTunes as it finalizes its plans for a tablet device, which is meant to be a multimedia gadget, according to people briefed about the product. The multimedia tablet is expected to be larger than an iPhone but smaller than a laptop computer. People briefed by Apple say the company is aiming to launch it by the end of March.