Consumers weren’t the only ones cheering when HBO announced plans for a web-only version of its subscription video service on Wednesday.
The news was also a boon for Apple, which is in the middle of negotiations with major cable companies like Comcast and Time Warner to licence their content for Apple TV, the company’s set-top box for streaming multimedia.
Apple has been interested in TV for a while. CEO Tim Cook recently said TV was “stuck back in the 70s” in an interview with Charlie Rose.
Usually Apple can play hardball in negotiations with its partners, but content is one area where the company doesn’t have any leverage.
Comcast and Time Warner have been reluctant to licence video to Apple over fears that giving consumers the option to choose the content they want would drive down their subscription-based revenue streams.
That Comcast and Time Warner are considering a merger only weakens Apple’s negotiating position.
However, the subscription revenue streams cable companies have depended on are drying up.
Note the plummeting blue line below. That’s Comcast and Time Warner’s revenue going down the drain as consumers are increasingly cutting the cord in favour of set-top boxes like Roku and Apple TV:
HBO’s decision to unbundle its content signals that Time Warner, its parent company, is more concerned with losing gross revenue than allowing customers to choose what kind of content they want.
It also helps Apple position itself as a revenue stream rather than a usurper of cable companies.
Apple can also point to the popularity of streaming on-demand content. Streaming particularly popular among teenage consumers:
Apple has also had some success going around content distributors and partnering with individual studios like CNBC and Fox Now.
But now that Time Warner has effectively waved a white flag by unbundling HBO, we might see Apple do some exciting things with TV in the not-so-distant-future.
Who knows? Maybe they will finally come out with a TV of their own.
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