Apple has upped the stakes in the web loungeroom battle by slashing the price of its TV device and announcing 99-cent downloads for shows.
Hours after Steve Jobs unveiled Apple’s new pitch Wednesday, online retailer Amazon cut the prices of its TV shows to 99 cents as well.
In what is becoming a frantic battle for the internet TV market, Apple cut the price of its TV hard drive from $229 to $99.
It will offer TV shows available for download from ABC, Fox, Disney Channel and BBC the day after being broadcast, as well as content from Netflix, yet another company pushing into the online movie business.
Amazon matched Apple's price for TV shows from ABC, Fox and the BBC, reported the Wall Street Journal.
While Jobs said he expected other media companies to “get on board,” most of the large TV content owners have already refused to sell to Apple TV on its current terms.
“NBC Universal, Time Warner Inc. and CBS Corp., turned down Apple's new pricing options and don't expect to sign up for TV-show rentals as currently configured,” the Journal said, quoting un-named sources.
Yesterday’s announcements are another sign that internet-connected TVs and super-fast broadband are upending the traditional world of TV.
Apple’s rival Google plans a worldwide pay-per-view service, due to start by the end of the year.
It is pitching the power of its search technology and YouTube to force broadcasters to become either partners or competitors. As a source told the FT: ““Google and YouTube are a global phenomenon with a hell of a lot of eyeballs – more than any cable or satellite service.”
While Apple and Google are chasing first-run content, Amazon and Netflix aim to focus on older or “long-tail” content to avoid directly competing with the major networks.
But they all are competing with Hulu, the established site for new TV shows owned by Fox, NBC and ABC, which is already offering free and subscription content online.
Media companies face a classic disruption dilemma. They don’t want to fragment their audience – yet the clear lesson of the past decade is that it’s much better to cannibalize yourself than have a competitor do it to you.
For telcos the competition in TV will drive more gigabytes of content down their pipes.
But the emergence of Apple and Google as global TV content channels also threatens to disrupt telco IPTV, which has been an effective strategy for cutting churn and line loss for fixed-line carriers.
Apple’s Nasdaq stock rose 2.97% Wednesday, and another 0.11% in after-hours trading, closing at 250.60.
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