December 22nd, 2009 5:01 pm

Apple, CBS and Disney to kill off cable TV

CBS and Disney are believed to be considering partnering with Apple to kill off cable TV through a subscription iTunes service.

According to The Wall Street Journal, CBS Corporation and The Walt Disney Company are seriously considering a proposal from Apple to kill off cable TV with a subscription based TV show service through iTunes.

The report explains that under Apple’s proposed subscription model, users would have “access to some TV shows from a selection of major networks” and basic cable channels for a flat monthly fee of around $US30.

CBS Corp. could offer programs from both CBS and The CW, including ‘NCIS’, ‘The Good Wife’ and ‘90210′; while The Walt Disney Co. could offer programs from ABC, ABC Family and Disney Channel, including ‘Lost’, ‘Desperate Housewives’, ‘Greek’ and ‘Hannah Montana’.

As to how this could kill off pay TV, the WSJ notes that the networks could actually make more money per subscriber via iTunes than they do from cable TV providers, with broadcast networks receiving up to $US2-$US4 per subscriber, and basic-cable networks receiving $US1-$US2 per subscriber.

While CBS and Disney have plenty to gain from an iTunes subscription service, the two companies are also quite nervous about giving Apple more control and market-share. Apple already have a stranglehold over TV episode pricing on iTunes, with all episodes priced at a fixed $US1.99 — which lead to a brief fallout with NBC in 2007.

Even if Apple can win over CBS and Disney, the California-based company will have a tough time convincing other networks to join the bandwagon, with NBC Universal and Warner Bros. Television holding significant cable TV interests — with Comcast’s recent acquisition of NBC and Warner’s own TimeWarner Cable.

How this could affect the Australian market remains to be seen. Although it’s worth noting that all major US networks and content providers (sans CBS) currently distribute shows via the Australian iTunes Store.

Provided the local networks have no objections (though that could be a whole other can of worms), would you be interested in seeing a subscription based iTunes TV show service?

Source: The Wall Street Journal via Apple Insider