You need a pay TV subscription to see the CNBC and FOX NOW programming – and not all providers have deals to offer the business news and entertainment services online to their customers. Still, these are big additions to Apple’s streaming platform, which the tech giant is eager to promote after initially characterizing it as a mere hobby.
Apple TV becomes the first TV-connected streaming platform to offer a “full-featured CNBC TV Everywhere experience,” says NBCUniversal TV Everywhere GM Alison Moore. Users can watch the channel live, and see shows or clips on demand. CNBC President Mark Hoffman says that makes it possible for viewers “to be in control of their experience.” Pay TV providers authenticating the service include AT&T U-verse, Cablevision’s Optimum TV, Comcast’s Xfinity TV, Cox, DirecTV, Dish Network, RCN, Suddenlink, Verizon FiOS and Wide Open West.
Those accessing FOX NOW will be able to see full episodes of shows including Brooklyn Nine-Nine, Sleepy Hollow, The Simpsons, Family Guy, New Girl and Glee beginning the day after they first air. FOX NOW will offer bonus interviews and clips from its music shows including So You Think You Can Dance and American Idol. The Apple-based service can tap user preferences to recommend programming. Its Post-Play feature can facilitate binge viewing by automatically showing the next episode in a series. FOX Now is also available on iPhones and iPads as well as Android devices, Xbox, Roku, Samsung Smart TVs, and Windows 8. All of the major pay TV providers, except DirecTV, authenticate FOX NOW on Apple TV.
Tim Cook hinted in his call with analysts today that Apple wants to become a bigger player in TV. He says that the company has already sold 20M of its Apple TV streaming boxes, which accounted for $1B in sales last year. That helps to explain why, in February, he stopped calling the product a “hobby.” As it has grown, and become more sophisticated, “it didn’t feel right to me” to treat it so dismissively. He doesn’t appear to feel threatened by Amazon’s deal today to land several popular shows from HBO and add HBO GO to the Amazon Fire TV platform. “We have HBO GO already on Apple TV,” the Apple CEO says. As for the programming: “They got some older content from HBO. I haven’t had a chance to evaluate exactly what it is.” While Apple fans eagerly wait to see what new products the company might unveil this year, Cook says “I’m feeling very good about that [TV] business and where it can go.”
Apple CEO Tim Cook disclosed the number, which includes hardware and software sales for the streaming video device, at the company’s annual shareholder meeting today. And at $1B in sales “it’s a little hard to call it a hobby anymore,” he says. He continued his Dance of the Seven Veils with his promise to introduce products that will excite consumers — and investors, who’ve grown anxious as the iPhone and iPad have lost market share to Android-powered rivals. “I’d like to unveil some new products today,” he told shareholders before adding: “I was just kidding about that last part.” He did say, though, that the company increased its spending on research and development by 32% and that will become evident in new products including ”some things that are extensions of things you can see and some that you can’t see.” Cook told an investor that he wanted to keep his plans secret because “you can see we’re getting ripped off left, right and sideways.” Activist investor Carl Icahn planned to use the meeting to lobby for a resolution urging Apple to repurchase $50B of its stock, but he abandoned the effort early this month saying that he was content with its current spending.
Is this one of the products that Apple CEO Tim Cook has promised will wow consumers and investors this year? The electronics company is negotiating with the No. 2 cable operator and others who can feed content to a video decoder Apple wants to introduce in April and begin to sell by the Christmas holiday season, Bloomberg reports, citing “people with knowledge of the matter.” The device would be similar to the current Apple TV, which supplies web-delivered video to TV sets. If negotiations pan out, then this would be the first time it would also include conventional pay TV. To offer that, it would have to be able to determine whether the user is a subscriber, unencrypt the scrambled signals for those who are, and provide two-way communications with the distributor for VOD and other services. The report says that Apple plans to pack its set top box with a faster processor than it now uses for Apple TV, as well as an interface that will help users to easily sort through TV shows, movies and online content. Up to now, cable and satellite companies have been reluctant to give outsiders the capability to come between them and their customers.
The activist investor made his pitch in a letter to fellow shareholders today urging them to support his resolution calling on Apple to increase its share-repurchase plan. “Given that the company has $130 billion of net cash and $40 billion of expected annual earnings, and the fact that it is hard to find a better time in history to borrow money, a $50 billion share repurchase over the course of fiscal year 2014 seems more than reasonable to us,” Carl Icahn writes — calling this “one of the greatest examples of a ‘no brainer’ we have seen in five decades of successful investing.” He adds that he’s an Apple fan, and over the last two weeks bought $1B of its stock, including $500M today, for a total holding worth about $3.6B. One reason for his optimism is his hope that Apple will finally introduce a TV set that will make it easy for users to watch shows from conventional pay TV and the web, and take advantage of the growing interest in 4K, or Ultra HD, screens. “While cable companies will likely be slow to upgrade their linear TV infrastructure due to cost, video content is expected to be accessible through the internet via services like Netflix and others,” Icahn writes. “We believe ultra high definition represents a major catalyst for the next TV replacement cycle and a promising moment for Apple to introduce its first new product in this category.”
Related: Carl Icahn Takes Another Bite Of Apple
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Apple and Microsoft have added new channels to their streaming video devices that boost their available content. It’s a step forward for both gadgets but doesn’t break the a la carte wall just yet. Apple TV was upgraded today to include apps for Disney channels – pay TV subscription required — Vevo and the Weather Channel, while Microsoft’s Xbox 360 console added a subscription-contingent Time Warner Cable app. The latter offers access to 300 TV channels including CNN, AMC and Comedy Central. Blair Westlake, corporate VP of Microsoft’s media and entertainment group, told the Wall Street Journal’s Digits blog that his company had considered licensing channels directly from media companies to create a service similar to the kinds of online cable TV products planned by Intel and Sony. “We looked at it and said if we can deliver an app or apps like the one we are lighting up today” with Time Warner Cable, that’s “really what people expect.”
Related: Will Apple Be Able To Allow Ad-Skipping In Its TV Platform?
About 14% of all households have a streaming media device, twice the number that had one two years ago, research firm Parks Associates says today. But the most interesting finding in its new report on trends in connected TV is that relatively tiny Roku handily beats the mighty Apple among people who own a streaming video media device. Some 37% go with Roku vs 24% who “primarily use” Apple TV, the company found in a survey of 10,000 U.S. broadband households early this year. The company expects worldwide sales of 330M connected TV devices — including smart TVs, gaming consoles, Blu-ray players, and streaming video media devices — in 2017, twice the number it says likely will be sold this year. Even though more TV sets will include Internet connectivity, Parks’ Barbara Kraus says that people will still buy separate devices including ones from Roku, Apple TV, and Google’s $35 Chromecast because they “offer innovations such as streaming video at low prices.” But with the average price for these devices likely to plummet, manufacturers and service providers will have to pick up the slack with “new and recurring revenue streams in advertising and content placement.”
Talks with cable companies and TV networks about just such a plan “seem to be heating up,” according to a blog post by former Wall Street Journal reporter Jessica Lessin. This would be a premium service for Apple, she says — and distributors have an incentive to consider the idea because the consumer electronics company would compensate them for the revenues they’d lose. Apple CEO Tim Cook and SVP Eddy Cue raised the idea with some execs last week at Allen & Co’s Sun Valley mogulfest, Lessin says. The company has been working for years to develop its own TV set and service; last year Cook called it “an area of intense interest for us.” But owners of TV rights have a good thing going with pay TV providers, and for the most part have been unimpressed with Apple’s efforts to join the club. Apple’s idea to compensate them for ad skipping “seems unlikely to be enough to convince them” to change their minds, Lessin says. Networks fear that tech companies such as Apple ultimately want to offer programming a la carte, instead of in the current bundles that require subscribers to pay for channels that they don’t watch. Without bundling, the TV ecosystem would lose about half of its value — now estimated at $70B — with only 20 channels able to survive, Needham & Co analyst Laura Martin said in a report yesterday. Read More »
With HBO Go and Watch ESPN firmly ensconced on Apple TV, is the country’s second-largest cabler about to come aboard? Sources told Bloomberg today that the companies will unveil a deal in the next few months. It would mark the first cableco deal for the tech giant’s $99 set-top box, though Time Warner Cable already has deals in place with Roku for its streaming-TV device and Microsoft’s Xbox 360. Its TWC TV app also makes content available for Apple’s iPhones and iPad. “It’s not necessary for Apple to remake the media industry to sell a great TV product,” London-based analyst Benedict Evans told Bloomberg. “They are methodically adding to Apple TV.” The news service also said Tuesday that Apple is hiring Hulu marketing exec Pete Distad to help it seal deals with cable and media companies.
Related: Many Willing To Pay 20% Premium For An Apple TV: Study
Wish I could tell you what they are — but CEO Tim Cook offered sizzle without steak in his call with Wall Street analysts today after Apple reported its second-quarter earnings. He says that Apple will enter new product categories, but wouldn’t be more specific. “We can’t wait” to introduce the products, he says. “We have a lot more surprises in the works…We have some really great stuff coming in the fall and across all of 2014.” He tiptoed around a question about whether he might offer iPhones with screens larger than 4 inches, following competitors including Samsung whose smartphone screens run 5 inches and up. “Our competitors have made some significant trade-offs in order to ship a larger display,” he says. “We would not ship a larger display iPhone while these trade-offs exist.” He added that Apple has “the best products by far” as well as “the best ecosystem by far, and we’re going to make it better and better.” Company watchers expect Apple to introduce a TV set that integrates conventional and online video and wrist watches that communicate with its iPhones, as well as a subscription online music service that would compete with Pandora. Investors are eager to see new products as Apple’s mainstay products face growing competition from rival smartphone, tablet, and computer makers.
Related: Apple Says It Will Return Billions To Shareholders
That’s the question of the day for Apple followers as the company’s fans on Wall Street lick their wounds from last night’s disappointing earnings report. The stock fell 12.4% today to $450.50. That’s the company’s worst one-day performance in about four years, and puts Apple shares right where they were about year ago. The company’s market value of $423B is still impressive, but a far cry from late September around the time it released the iPhone 5. Back then, investors thought it was worth more than $659B. To put this into perspective, the drop in the perceived value of Apple over the last four months amounts to more than the value of Comcast, Disney, and Viacom combined. Read More »
Apple TV Adds Video Streaming Service Watchever In Germany
Apple TV has added access to Vivendi’s streaming video subscription service Watchever in Germany. The move could open the door to more region-specific deals “where there is a strong localized offering that delivers content appealing to Apple TV owners there,” according to Next Web. Watchever offers access to whole seasons of U.S. series, movie blockbusters and international art house films for €8.99 ($11.99) per month. Purported “thousands” of available titles include AMC’s Mad Men and Breaking Bad, early seasons of HBO shows such as The Sopranos and Sex and the City and films like Slumdog Millionaire and There Will Be Blood. Netflix is not available in Germany. Amazon-owned Lovefilm, which offers both streaming and physical DVDs, is available but as with Amazon Instant Video in the U.S., it’s not available on Apple TV. Read More »
The latest contribution to the speculation about a possible Apple TV comes from a survey commissioned by Morgan Stanley which quizzed 1,568 heads of households in the U.S. in September. It found that 47% were at least “somewhat interested” in buying a TV from Apple, analyst Katy Huberty reports. That’s impressive: Only 23% were as interested in the iPhone when the investment firm conducted a similar survey in February 2007, and 21% were interested in the iPad in April 2010. And the findings about an Apple TV may be conservative: “the survey was conducted ahead of an actual product announcement,” Huberty says. Still, respondents on average said that they’d be willing to pay $1,060 for an Apple TV, which is 20% more than they paid for their current sets. (About 46% were willing to go over $1,000 and 10% would cough up more than $2,000.) That’s “an incremental $13B revenue opportunity” for Apple. But consumers might have to pay more than $1,300 for a 45-inch set in order for Apple to generate a gross profit margin of 40% — below its current 44% — the analyst says. Does Apple need to control all aspects of the TV offering, the way it does with, say, music and the iPod? Not necessarily. “Apple is most likely to sell a TV with an integrated digital media receiver and Apple operating system,” says Huberty. “Ease-of-use and searchability of content are key areas in which Apple can … Read More »
The entertainment industry has been waiting since last year for Apple to unveil a device that would simplify TV navigation the way the iPod and iTunes did for music. But it seems the company won’t have anything out by the end of 2012 Bloomberg reports today citing “a person familiar with the company’s plans.” The problem: Cable operators pretty much control TV distribution, and they don’t like the idea of having Apple come between them and their customers. CEO Tim Cook has been talking with operators about several possibilities, including the development of an Apple set-top box– but they seem to have gone nowhere. Without cable’s cooperation, Apple would have two clunky options to offer a device that incorporates conventional TV programming: It could plug into operators’ set top boxes, or it could unencrypt signals by using a CableCard. Cable operators have dragged their feet in supporting CableCards and, as a result, few consumer electronics companies have built products around it. Apple’s late CEO Steve Jobs told biographer Walter Isaacson that he had “cracked” a way to create “an integrated television set” that would be “seamlessly synced with all of your devices and with iCloud.” This past May Cook said that television is “an area of intense interest for us.” He added: “We are going to keep pulling the string and see where this takes us.”
This could be a significant change for Apple: So far it has only made iTunes and Netflix available to Apple TV users who wanted to order movies and TV shows. Strangely, the companies aren’t saying much about the decision. There’s no press release with grandiose statements from execs — just this mention on the Hulu blog with instructions for Apple TV users who want to access the $7.99 a month service. But Apple’s desire to limit consumers’ choices seemed to put Apple TV at a competitive disadvantage to rivals including game consoles (such as Microsoft’s Xbox and Sony’s PS3) and Roku boxes that provide gateways to other video services including Amazon Prime. Hulu Plus streams a variety of TV shows including current and old series from ABC, NBC, FOX, The CW and Univision.
BTIG’s Rich Greenfield is one of the few media analysts who also seems to use and critique just about every video gadget that’s ever been made. So people who are betting that Apple is about to make huge profits from a TV set that will revolutionize consumers’ relationship with the tube should pay attention to his warning this morning: It “will take longer to come to fruition than investors are likely expecting.” His view jibes with that of his BTIG colleague, Walt Piecyk, who on Monday downgraded Apple to “neutral,” in part because of his conclusion that ”no Apple TV will be released this year.” The belief that Apple is about to upend the TV market, just as it has done with music and phones, spread last year. Steve Jobs’ biographer Walter Isaacson quoted the late CEO saying that he finally “cracked” a way to make the viewing process simple and elegant. Greenfield agrees that there’s an opportunity for someone to do just that. The user interfaces and remote controls from TV manufacturers and pay TV companies “are horrible – they are the polar opposite of intuitive and they certainly don’t ‘just work’,” the analyst says. Read More »
The analysis out this morning from Barclays Equity Research captures the general ambivalence on the Street about the eagerly anticipated Apple television set, which the firm expects to see as early as 2013. It envisions a TV set that blends Internet and conventional TV programming enhanced by features including Apple’s Siri voice controls and an iSight camera and microphone. “Apple’s eventual television could be so much more than a TV — including gaming, video communication, content delivery, apps, computing and all the capabilities of the current Apple TV — that it is really not fair to compare it to products already on the market,” Barclays says. The TVs probably wouldn’t need to be connected to a cable set top box; they could use CableCARDs to unscramble the providers’ signal. Although that would mean no access to the operator’s VOD, Barclays says that consumers won’t mind because they’ll be able to connect to services such as Netflix and Hulu. Barclays estimates that Apple could generate $17B in revenues it it takes 5% of the TV set market. Read More »
This was a little buried under yesterday’s flurry of news about the changes to the Apple TV and iPad — and Netflix‘s talks to become a cable service. But the streaming video provider said in a blog post that owners of Apple TV boxes can finally sign up and pay for the streaming video service through Apple‘s iTunes Store, instead of going to a computer to make the purchase arrangements. Netflix also said that it is taking advantage of Apple TV’s new capability to stream video at 1080p HD quality, with Dolby Digital 5.1 audio. “We’re always looking for ways to make the Netflix experience simpler and better,” Netflix VP Business Development Bill Holmes said. The company didn’t disclose financial terms with Apple. But if the tech giant gets a cut of the $7.99-a-month subscription price — which is probably the case — then that could establish a model of sorts for Netflix as it considers possible carriage deals with cable companies.