Apple Wants to Slice Commercials Out of TV
Consumers have long been looking for an excuse to not only have Apple (NASDAQ:AAPL) in their pockets and at their desk, but also in their living room. Rumors about an Apple television waiting in the wings have been circulating for a considerable amount of time, but it finally looks as if these rumblings will take shape at the end of this year.
And when the iTV arrives, the Cupertino, California-based tech company wants to make sure its deal is extra sweet. That’s why it is hoping to roll out a complementary television service that will offer viewers the chance to skip commercials.
Sounds too good to be true, right? There is indeed a catch, but it doesn’t exactly come at the cost of consumers. Apple is willing to compensate television networks for the lost revenue, making it a much more attractive deal. However, these plans have been more than a year in the making, and it is still unclear if the media companies will ever take a bite of Apple’s bait. Dish Network (NASDAQ:DISH) was sued last year when it tried to implement similar technology, so the tech giant will have to tread lightly as it continues to try to strike a deal.
But while many consumers understood that Dish would unlikely be able to push its plan past the media bigwigs, there is more optimism for Apple’s case due to the rising popularity of DVR systems.
Because so many viewers are already fast-forwarding through commercials on their DVRs, television networks may now be more open to getting paid for the skipped commercials, rather than simply losing money off them. As DVR technology evolves, the current model of television ratings and commercial advertising will likely need a restructuring, and if anyone is going to convince media executives to jump now rather than later, Apple will undoubtedly have many peoples’ bets.
Still, even if Apple’s plans do go through, the commercial-free TV won’t be accessible to everyone. Apple will reportedly offer a “premium” version of its service, and only those who subscribe to it will be able to skip the ads. In addition, now that we understand the company’s intentions, it’s easier to understand why Apple won a patent last year for technology that substitutes a different stream of video for television commercials.
As the company moves forward in its negotiating, it’ll look to cable companies like Time Warner Cable (NYSE:TWC) to help it launch a program that gives viewers the chance to watch television using an “Apple device as a set-top box and with a software interface designed by Apple.” All discussions continue to be extremely secretive, but the TV’s launch in the coming months will finally offer the insight everyone has been waiting for.
Here’s how Apple traded on Tuesday:
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