ABC and CBS Jumping in Bed with Apple? That Would be a Risky Political Decision.
Disney (ABC) and CBS are reportedly in negotations with Apple to provide their TV shows, without commercials, on a subscription basis via iTunes.
I have a few questions about this. The first obvious question is: will consumers be willing to pay a monthly fee of $3 - $5 per show, for ad-free TV downloaded to their computer, iPod, and iPhone? This is content that is already available for "free" (broadcast, cable, Hulu, network websites, etc).
But more importantly, the business strategy question: are ABC and CBS really ready to take sides in the emerging Apple vs. Cable TV battle of the decade?
It's no secret that Apple wants to disrupt the TV industry like it successfully did the music industry. Their approach is to disintermediate the old guard content distributors. In the case of TV, that means pushing out the cable companies from the supply chain; connecting consumers directly to the content, removing the "middleman". This, of course, terrifies the cable operators (Comcast / Time Warner / Cox / etc).
The problem with that approach is that it forces the TV programmers (ABC, CBS, NBC, Fox, and the cable channels) to align themselves with one side or the other: Apple or the cable MSO's. Remember that the programmers are still heavily reliant on "carriage fee" revenues from the MSO's.
Apple and Comcast both need ABC and CBS... however, ABC and CBS both need Comcast more they need Apple, at present time. So it's a big gamble for them to jump in bed with Apple.
I've written about this political gamble for the TV programmers here: Apple Creates Bad Political Situation for Content Providers
That all said, Steve Jobs is Disney's largest shareholder and has a lot of influence over strategic decisions. That could partly explain ABC's motivation to deal with Apple, but why CBS? It seems like CBS decisions are based on "anything but Hulu" (where "anything" also means "everything").
More background from NewTeeVee: http://newteevee.com/2009/12/22/will-consumers-pay-for-what-abc-and-cbs-already-give-away-for-free
I doubt that CBS/ABC would really have to choose cable versus Apple. It's a new distribution channel versus replacement of an old one. The Comcasts won't be happy, but they aren't going to give CBS/ABC the boot.
Really interesting to hear that CBS is now in these discussions.