The proof is in the pudding, and this pudding tastes a little like it’s going out of date and heading towards irrelevance faster than we may have originally thought. According to CBS CEO Les Moonves, CBS turned down an ad-based Apple TV deal because it was based on an ad split, instead of the more coveted upfront licensing fee for syndication of its content.
In other words, yesterday’s model built for tomorrow. Things are changing, and they’re changing fast. Rumors of a web-equppied television from Apple have been around probably as long as phone rumors were before the iPhone launch, and there’s plenty of evidence that people are turning off their televisions these days. The networks moved quickly to kill off the Google TV because it threatened their bottom line, and it’s the same reason they’re trying to avoid the Apple TV — the future is scary, and new revenue models could turn catastrophic fast for these networks.
CBS, and others, have shown a tendency to go with what they know, while moving into the new web-based streaming market. They’ve struck deals with Netflix and Hulu, but it’s based on licensing fees, not the advertising split that Apple was looking to obtain. Pay upfront — get rewarded with the right to stream episodic television content.
There’s no word on what the terms were that CBS turned down, and the CBS CEO didn’t spill the beans on their earnings call; however, we can probably assume it was a 70-30 split like all of Apple’s other properties, which has to be pretty scary for these networks.
Despite the terms, and presumptions, this is the first official bit of information we’ve heard that Apple is trying to negotiate with networks for the right to carry their content on the Apple TV, or an upcoming Apple Television. It’s pretty official now. Apple’s out there trying to change the way we get our favourite shows on the television.
Take it from me. I’ve disconnected my cable, and now rely 100% on Netflix, my Apple TV, and the newly added NHL Center Ice package for my nightly video entertainment. I have no intention of turning the cable back on, and I don’t think I ever will again. The networks may be uncomfortable with the model, and that’s fine, but I really hope they’re paying attention to the way people are looking to get their favourite shows these days. It’s certainly not by paying $70.00 per month for basic cable, that’s for sure.
Source: Giga OM