Apple TV keeps users from cutting the cable TV cord

Apple TV keeps users from cutting the cable TV cord

Services like iTunes and products like Apple TV have made it easier than ever for people to "cut the cord" from cable TV - enabling them to pay either a la carte for programming they want or to use subscription-based services they think are worth the money, like Netflix or Hulu Plus. Apple's latest changes to Apple TV sadly don't do anything to help that move - in fact, they work against it.

On Wednesday Apple pushed live an update to Apple TV that provides the second and third-generation black boxes with access to five new services: HBO Go, WatchESPN, Qello, Crunchyroll, and Sky News.

Qello focuses on live concert and music documentaries, while Crunchyroll focuses on Japanese anime and Japanese and Korean live-action TV shows. Both services are subscription-based, like Netflix, Hulu Plus and other services Apple TV also supports. Sky News is free to watch and unencumbered by any sort of subscription system.

Apple is, by all accounts, trying to make peace with cable companies, and this is one of the first tangible examples of that effort.

But it sets Apple down a path that some Apple TV users are bound to be unhappy with, because HBO Go and WatchESPN both depend on an authentication system that requires you to have an active cable television account.

Trying to set up either service prompts you to visit web sites and enter a unique identifier after selecting your cable service provider and signing in using your cable TV account to verify. In principle, this isn't fundamentally different from needing to subscribe to Crunchyroll to access their services. And it isn't new - the same restriction exists for the HBO Go and WatchESPN apps on iPhone and iPad.

But it is an unwelcome encumbrance for the Apple TV, at least for users who were hoping to shirk the expense and trouble of a premium cable TV subscription. It's also a slap in the face to customers of services that don't support the authentication system, like DirecTV users.

Unsurprisingly, HBO content on iTunes is old - last season's Game of Thrones is on there, for example, but season three, which just wrapped up, is nowhere to be found. If it were there, there would be less reason for people to subscribe to HBO through their cable provider to begin with. And that would hit HBO where it hurt - in the pocketbook.

So what are users of unsupported services, or people only interested in a la carte programming, expected to do in the interim? They have to wait. Surely some will. Some will get impatient and use BitTorrent or another file-sharing service to grab pirated copies of the latest shows they want to watch.

Cable content providers aren't going to give up easily, and the cable companies are going to act as their gatekeepers any way they can. It's a multibillion industry controlled by some of the most powerful media companies in the world.

We've heard a lot over the years about the supposed Apple television set, and how once Apple's in the TV market - really in the TV market - things are going to change. Radically. But it turns out to be Age of Aquarius magical thinking. It's a nut that, despite Walter Isaacson's tease in the Steve Jobs biography, Jobs himself was never able to crack.

Almost two years after Jobs' passing, Apple's work securing fresh programming for Apple TV users is finally yielding fruit. Unfortunately, Apple has had to make compromises - compromises that complicate things for some of their customers.

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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There are 32 comments. Add yours.

SterlingSpring says:

Very much disagree...while I don't like the whole cable non-sense....that actually isn't Apple's problem....that problem actually lies with HBO and ESPN with their old way of thinking...so its really up to us to pressure those networks to do a simpler subscription model like Netflix and Hulu Plus. It's actually a good thing in one sense..less and less people will use those services and it will teach HBO and ESPN a lesson they will have to rethink their practices OR they will continue to suffer losses. Apple is simply providing a venue in which providers can do business the way THEY want...and with all respect...thats how it should be...because thats how the free market works. I'm glad Apple has provided customers with more options and choices...

Peter Cohen says:

It's certainly Apple's problem as long as they're producing the content people want.

gunboatd says:

what? you don't have to have a subscription to use aTV. however they are giving the option to users to use HBOgo or ESPN on their aTV. i don't have cable, or an aTV, and i'm not a mac user; but i'm having trouble understanding why you think this is 'apple's problem'.

Peter Cohen says:

Yes, fewer people are subscribing to cable than used to. They're either cutting cable all together or they're moving to other services like DirecTV and Aereo. But that means that content providers like HBO, and their partner cable companies, are more likely than want to squeeze and restrict companies like Apple from providing content easily to their customers.

Dev from tipb says:

Content *providers* are never going to want to squeeze or restrict sales of their wares, except insofar as their current biggest customers - the cable/satellite folks - pressure them.

gordol says:

All HBO, etc, need to do is allow for network streaming subscriptions like Netflix, Hulu, etc, do. HBO, etc, do not require the likes of Comcast or AT&T to deliver their content anymore. If they're afraid of pricing out individual subscribers, they can do package bundles WITH existing online streaming companies or STB providers like Apple, Roku, etc.

godlikenerd says:

You underestimate how much of their business is derived from cable subscriptions and the things cable companies will do to retaliate in response to an important part of their business. The hang up has nothing to do with streaming infrastructure or STB support as they have both.

It has everything to do with their business relationship with cable providers and the impact of cutting them out.

gordol says:

What can the cable providers do? Cut off their own noses to spite the face by dropping the channel? I don't subscribe to any of the movie packages because I am unwilling to spend that kind of money for channels I do not watch and have no use for. So my not wanting to waste money on Cinemax means I can't watch Game Of Thrones on another channel. But I know plenty of others who would miss the channel if it were dropped and have no intention of even attempting a roll-your-own package through any kind of STB other than the one provided by the cable company.

If Comcast, etc, want to fight back against HBO, etc, providing a direct subscription streaming option their best bet would be to unbundle the channels and make it a la carte options so that people like me can pick and choose HBO and Stars and leave behind Cinemax.

godlikenerd says:

They can back their competitors. They can make minor adjustments to the rate paid to HBO per customer that would be massive in aggregate.

As for Cinemax, they get bundled because HBO pushes it as they are the same company.

As for cable company bundling, the physical infrastructure required to run their business drives minimum costs per customer.

This isn't to say that HBO and cable companies shouldn't start adapting to a changing market, but those changes will be evolutionary until the effects on the business can be measured and understood. It's very easy to suggest drastic changes to a business when one has no investment.

Dev from tipb says:

HBO and ESPN are not suffering losses here. The cable companies *might*, and that is the crux of the issue. Any "pressure" you want to apply to a network must exceed that which the cable companies can apply. HBO and ESPN would be only too happy to sell to you directly, but they sell a *lot more* in licensing to cable/satellite providers.

This year's Dish-ESPN lawsuit suggests cable companies pay in the area of $5 per subscriber [ http://www.hollywoodreporter.com/thr-esq/dish-espn-trial-offers-a-422301 ]. Plus ESPN strongarms cablecompanies into taking its secondary channels (ESPN2, ESPNU and ESPN Deportes, etc) at $0.30-$0.75 or so per subscriber if they want to get ESPN -- a tactic unlikely to work on individual consumers. Going by Wikipedia's 2009 numbers that Time Warner had 8.8 million subscribers on an ESPN-capable tier in 2009, we can speculate ESPN takes in at least $50 million per month in fees from a single large cable company. Multiple this revenue stream by 5 or 6 times to get a clearer idea of how much ESPN takes in from the industry.

If you want ESPN to give up their "old thinking," then you (well, we, the public) have to show the producer that they can make money on the deal, more than enough to offset the anger and possibly reduced licensing fees from the cable companies in the future. If every single AppleTV user were to cut the cord *and* pledge $5/month for ESPN, it *might* reach about 1/15th of what ESPN gets from the cable/satellite industry. ESPN ain't about to stir that hornets' for those kind of numbers.

Edit: Yet.

sangs says:

Wait, HBO and ESPN "continue to suffer losses?" That's news to me. ESPN/Disney is a behemoth that makes more money than it knows what to do with and if I'm not mistaken, HBO has more subscribers than at any point in its history. Wish I suffered as much.

nite732 says:

Why would I need hbo go on my apple tv. I'm at home already. It doesn't make sense to me.

Peter Cohen says:

Yeah, that's one point to consider. I have an HBO subscription, so I can view several channels of live HBO programming on my cable box and watch on demand content when I need to, either from my cable box or TiVo. Having it on Apple TV is convenient, I suppose, if I'm already using the Apple TV, but it's just another redundant method of accessing the same content I can get through other means.

valkraider says:

Because you can watch any HBO content at any time using HBOGo, even better than "on demand".

godlikenerd says:

Because you can take the Apple TV anywhere with you. That's hard to do with your home connection.

sbatwater says:

At this point, HBOGo and WatchESPN are pretty much table stakes for a tv set-top box. Apple isn't really doing anything new, as I can access WatchESPN on an Xbox, and HBOGo has been available for the Roku for some time now.

What bums me out though, as someone who has cut the cord, is that these apps don't offer true a la carte programming, and that Apple is sort of forced to maintain the status quo.

valkraider says:

Apple *added* HBOGo and ESPNwhatever.

No one is required to use them. The AppleTV is just as capable as it was yesterday.

Apple didn't make things more complicated for some users, like the article suggests. I have HBOGo available on my XBox - don't use it, XBox works just fine.

This is a dumb article. In no way does the AppleTV update make cutting the cable any harder than it was yesterday.

Yesterday there was no way to get HBO without subscribing and the same is true today. The problem with DirecTV and HBOGo has nothing to do with Apple - bitch to HBO or DirecTV.

CORYK333 says:

Exactly, I'm still trying to figure out how or why this is Apple's problem/fault. The author has responded to a few comments above & I'm still not seeing it, not in the slightest. All this does is give another way to watch the added content. It doesn't make anything "harder" and it doesn't take anything away from anyone, so ummmmmm, what's the problem??.........

arbourable says:

Can't speak for Peter, but my problem with this move is that this is not disruptive. Apple is, on the face of it, sustaining the current distribution model. I'm not blaming Apple for that, they need to provide content for their hobby box, just disappointed. I guess the Movie/TV industry don't feel the pressure from piracy in the same way the music industry did, they feel protected by DRM and the DMCA.

iSRS says:

DirecTV is not a participating provider, but it is in iPhone, iPad, Xbox??? WTF?!?!

Sent from the iMore App

phxguy88 says:

Directv is participating. I have it and am streaming HBO GO right now.

designingsean says:

What can you do if you don't have the service? Ask your non-AppleTV owning friends or family members who do if you can use their access! Probably not allowed, but it is worth a try.

sectime says:

Something radical, don't play the game , just turn it off. Seriously victims to TV?

Munale says:

As much a fanboy as I am, this is why I own a roku. Neither device is perfect but right now the roku is the better option for cord cutters. Holding out hope apple is waiting to perfect the streaming experience

Sent from the iMore App

kralnor says:

Its the best option as far as available channels go, but if you get any a la carte shows through iTunes you need an ATV obviously. Of course you can replicate a lot of that through roku's amazon video app, so forget I said anything. :)

sangs says:

So tired of the over-hype associated with "cord-cutting." Go read the Deloitte study. Less than one percent - repeat, less than one percent - of North America is expected to "cut the cord" in 2013. Yeah, ESPN and HBO should just blow up their current models because of that "movement." Occupy Wall Street had more participants than cord cutting.

http://www.deloitte.com/view/en_GX/global/industries/technology-media-te...

kralnor says:

Even when you cut the cord as I have, I'm still paying Comcast too much for my internet connection. This has the pleasant side effect of allowing me to watch espn3 online and with aTV but of course the "bad guys" are still getting my money every month.

kralnor says:

Everyone watching game of thrones, or whatever HBO series through their cable subscription already has a cable package with HBO, and probably would even if that one show didn't exist.

People without HBO or cable at all for that matter who want to watch the current season are not going shell out $200-$300 per month to watch that one show. Their only option is to torrent the episodes.

I really fail to see the logic of only putting old seasons of these shows on iTunes or amazon for purchase for these reasons. The only thing that will happen is they will get more revenue from people who decide $2.99 per episode is worth not breaking the law and getting a high quality version of the episode with predictable and reliable delivery. Some will still torrent sure, but no one will suddenly cancel their HBO package because they already have it and I'm sure use it for more than one particular show.

AlfieJr says:

this article misses half the point! yes, of course the cablecos want to lock us all in to needing them. but ... HBO, ESPN, and the rest of the content generators also want to lock us in as premium subscription pay channels too. they will eventually move to a "pay once, watch everywhere" model through iTunes, etc. (like MLB did) that would enable cord-cutting, but at the moment their base distribution and their payment infrastructure are far too dependent on the cablecos to break loose from that.

and yes, Apple has sold out to the cablecos - for now. Apple knows it needs to add the premium channels that people want to Apple TV for it to succeed at scale, and this is the price it has to pay for now. the tipping point will come if and when there are more Apple TV's in use than any single cableco's STB's. at that point, Apple will gain the upper hand with the content providers.

but the weak spot that remains is everyone will still need some ISP - and the cablecos have the greatest bandwith by far, which they will take advantage of by "bundling" ISP and CATV services as they do now. i think this - the ISP - is the huge missing piece in Apple's long term strategy.

Dark_Huntress says:

We cut the cord over a year ago and haven't looked back. Apple as well as the cable content providers refuse to let the old models go just like the music industry. It will happen but it is going to take awhile.

My cable bill went from $225 a month to $67. Thanks to Netflix, Hulu Plus and Amazon plus the ability to rent movies online, we have not missed cable tv one bit.

fieserhkf says:

fantastic, a great improvement of smart tv

flippadollars says:

Apple TV is an awesome alternative to cable. Thanks to the Amazon reviews regarding this gadget, I made a great choice. See more reviews and discounts: http://amzn.to/1cMWwoc. Very happy!