MG Siegler suggests that Apple is looking to slice up cable 99 cents at a time:
The rumors have persisted for a while now that a new Apple TV (soon to be called “iTV”) is approaching. It’s thought to be a cheaper, smaller version of the current device that puts an emphasis on streaming rather than storage.
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A report today in Bloomberg states that Apple is in “advanced talks” with News Corp. about a new television show rental program for iTunes. Viewers would get access to individual shows for $0.99 and they would be able to view them for 48 hours, according to the report. News Corp. is the parent of the Fox network (as well as other cable channels). Apple is also said to be in talks with CBS and Disney (which owns ABC, and counts Apple CEO Steve Jobs as its largest shareholder) for such a deal.
Siegler makes it clear that he still doesn’t understand the economics of television:
Let’s say you have five television shows you religiously watch each year. If Apple sold a season pass rental to each for $15, that would be $75. Already, that’s cheaper than most cable packages. But cable packages are per month. That $75 would be for the five shows you really want to watch all year! Even if you double the number of shows, it’s still an insanely good deal. And the cable industry knows it.
Cable companies charge so much because they shove a bunch of content down our throats that we don’t want and are not going to watch. But they get money to bundle all this junk together from various networks who sell ads on all this content that people mindlessly watch.