Cord Cutter's Diary
Posts tagged itunes
With Apple’s new operating system released yesterday, OS X 10.8 (Mountain Lion), AirPlay has finally come to the Mac. That’s a killer feature for cord cutters. Now, any media you can pull up on your MacBook or iMac — and there’s plenty of live and on-demand video most easily accessed that way — can be sent over to your big screen with a click. This was already the case for your iPod Touch, iPhone, or iPad, but nothing beats the flexibility of a personal computer with a Web browser.
Now, yes, it has always been possible to plug your Mac or any other computer into the side of your television. That’s how I and a lot of people I know do it. But it’s ironic and more than a little cumbersome that cutting the cord actually tends to involve, well, a lot of cords. Apple TV and AirPlay let you skip the hassle of plugging and unplugging your various devices, and the more Apple devices you own, the more convenient this seems. (Yes, of course, that’s the strategy. I am increasingly trapped in Apple’s ecosystem.)
When I was first considering which set-top box to buy, I chose Roku because it’s much more flexible and has many more apps. Apple TV is in the same price range but more limited: it has Netflix and MLB.tv but no Amazon and lots of other apps I find valuable. At the time, I saw the core strength of Apple TV as iTunes, which others may value but I don’t use much. But now it’s abundantly clear that Apple TV’s greatest asset is actually AirPlay, and that’s why I’m finally going to buy one. A friend and fellow cord cutter emailed me last night to say she’s also taking the plunge for the same reasons.
Apple has sold 4 million Apple TVs this year, but the company still calls the device a “hobby.” For that and other reasons, a lot of people speculate about Apple releasing an actual television that will enter the market with the same kind of splash that the iPad did. That may still happen — who knows — but as Peter Kafka wrote last month, “Look a little closer, and you might see the outlines of Apple’s TV plans staring you right in the face.”
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The Emmy nominations for best drama went to Boardwalk Empire (HBO), Breaking Bad (AMC), Homeland (Showtime), Downton Abbey (PBS), Game of Thrones (HBO), and Mad Men (AMC). I was struck by Mad Men creator Matthew Weiner’s response to the fact that none of those shows air on the broadcast networks:
There was no iTunes when we went on the air. The networks were very protective of their territory, being part of the Emmys and the history of the Emmys. The networks have had a shot – every single show up there has been pitched to the networks, every single one of them. And what you see, and this is not a judgment, is that they have a different kind of business model. ‘L.A. Law,’ do you think that NBC would do that kind of show right now? Or ‘Hill Street [Blues]’? They don’t need to.
And by the way, they own these cable companies. So it’s really just a product of diversification. I don’t think it’s any statement about broadcast versus cable. These are fictions. The weirdest thing is something like us or ‘Damages,’ that’s independent, getting in there. It’s cool when the Emmys spread it around. I don’t think the viewers care how the show gets in their house.
Here’s a conversation I had this morning on Twitter with Peter Kafka (reporter at AllThingsD) and Rich Greenfield (analyst at BTIG), two of the smartest minds on cord cutting and the future of digital media.
“Breaking Bad” for cord cutters
The fifth season of Breaking Bad — in my opinion, the best show currently airing on TV — premieres tonight on AMC, so I figured it would be worth checking on the viewing options for cord cutters. It’s quite interesting.
For a while now, it’s been possible to catch up on the first four seasons with Amazon, iTunes, or Vudu. HD-quality episodes generally cost $3 each, but season passes range — on Amazon, for instance — from $16.50 for season one to $31 for season four. Netflix customers paying $8 a month have been able to stream the first three seasons, but the fourth was only added today. Presumably, AMC’s strategy was to hook viewers with Netflix binges, wring as much revenue as possible from season four, and, in the process, build an audience for the new season.
But what kind of audience? AMC earns most of its revenue from retransmission fees paid by cable companies, so the network certainly hopes a lot of us watch tonight’s premiere as it airs on TV. But cable audiences are flatlining, perhaps decreasing, while companies like Dish Network attempt to hold the line on the fees they pay for AMC’s programming (which is why Dish customers can only watch tonight’s premiere online). That revenue stream may have hit its limit.
To reach an audience beyond what Dish, Cablevision, Time Warner Cable, etc., can provide, AMC makes its popular shows like Breaking Bad and Mad Men available on iTunes very soon after airing on TV. Usually, though, it’s not quickly enough for people on the East Coast to watch new episodes before coming into work on Monday. I’ll be watching to see exactly when new episodes appear on iTunes because, for a buzzy show like Breaking Bad, watching a day after everyone else can be frustrating. That’s the cable TV advantage, more or less. I wouldn’t be surprised if AMC, which is already out ahead of other networks on this score, makes tonight’s premiere available for download almost immediately after it airs.
In any event, AMC has priced the new season very aggressively on iTunes, charging just $22 for every episode. By comparison, the fourth season costs $32. That seems like a strong enticement to cut the cord, at least for viewers who enjoy Breaking Bad but not much other programming that comes with their cable subscriptions. Networks with those kinds of shows — yes, HBO foremost among them — have plenty of leverage, it seems, much as Dish and other cable companies will certainly complain about the $22 pricing. Man, that’s cheap.
[Update: One reason the season costs $22, I realized, is that it’s only eight episodes long. Well, technically, it’s 16 episodes split into two parts, the second of which will air next summer, but I assume the iTunes season pass only gets you part one. I still think $22 is cheap, but that helps explain the pricing discrepancies.]
It’s not clear whether Breaking Bad will be available as quickly on Amazon Instant Video as it is on iTunes, which could be unfortunate for people like me with a Roku box but no Apple TV. Still, it’s striking that the question is whether the new season of a major TV drama will provided to me by Apple or Amazon. In this situation, the cable companies look a lot like Gus at the end of season four: outmaneuvered and without much face to save.
Dammmn: “Apple saw its share fall to 32 percent from about 61 percent.” In one year! The research firm cited in this story essentially argues that the subscription model for digital video (Netflix, Hulu Plus, Amazon Prime) is killing the a la carte model (iTunes, Vudu, Amazon Instant Video). Two questions this raises for me:
- Will the same trend hold true for music in the U.S.? The iTunes a la carte model enjoys a 70% market share, but Spotify’s subscription model is still very new here.
- Will Apple relent and introduce a subscription model for media in the iTunes Store? It’s long been discussed, and Apple could theoretically offer an all-you-can-eat plan for movies and music. Apple has been reluctant to go this direction, probably because of the licensing fees, but I bet it happens soon.
And I guess it’s relevant that since I cut the cord, I’ve watched plenty of video on Netflix but haven’t purchased anything from iTunes. Things might be different if I had an Apple TV — or the next generation of Apple TV.
Update: Peter Kafka throws cold water on this report…
@benfritz @zseward ok talked to the ihs folks, confirmed what i thot. 10,000 % growth has to do w/reporting, accounting, not actual use.
— Peter Kafka (@pkafka) June 4, 2012
