Is Apple about to launch all-you-can-watch monthly iTunes subscriptions?

Interesting murmurs are emanating from Cupertino this week about Apple’s alleged plans to offer an all-you-can-watch television buffet for the princely sum of $30 a month. It’s about time. The days of the public buying a single song or downloading a single show for $2.99 are waning; they’d prefer to buy digital media the way they buy pens or Twizzlers from Staples, in bulk. With savvy senior citizens figuring out how to illegally download movies and music, it can be said with some confidence that iTunes has served for many as the “training wheels” for illegal Bit Torrent downloads. (It’s not a great leap — first step: download stuff from iTunes; a year later: download the same stuff for free). This alleged reasonably-priced Apple service would probably keep these folks within the paying fold. Why? Because the price is right and it’s convenient, and for no other reason.

2009 is the year when many cable customers (I’m one of them) cut the wire for good. With it being so easy to get the things they want for free online, why should consumers be obliged to spend $90 a month for 500 channels, 490 of them that are never, ever watched? Paying just $30 for the things you do want to watch is a no-brainer. You won’t need the DVR either, saving you an additional $12 a month.

And then there is what could be called the “Hulu problem” which should theoretically make this service more attractive for the networks (although it might take a while to get them there): Hulu execs make a big deal about selling out the advertising inventory for Hulu, but as CBS’s outgoing digital CEO Quincy Smith stated bluntly to All Things D, “You and I can say all day long, ‘We’re sold out on Web video. That’s going really well. It’s sold out.’ Well, no kidding, it’s sold out. It’s a $700-million market. The television market is $120 billion. And of that, $700 million, half of those [ad buyers] are spending 90% of their time doing Google keywords, not buying online video.”

There is a reason why Smith’s intelligence is valued at CBS (which is likely to become a client at his new digital consulting firm), and his pointed summation of where the marketplace is right now demonstrates this handily: “I don’t hate Hulu. Hulu’s world-class video viewing. What I don’t understand is, why license all that content to something that works that well, that seamlessly, yet – without the economic model around it?”

Clearly, Apple’s alleged plans would be a boon to the bottom line of the networks and turn the iTunes store into a pseudo cable and satellite TV operator. The spanner in the works, of course, is likely to be the cable and satellite carriers, which will have a lot to lose with this new equation. Serves ‘em right for charging me all those years for sports channels I never watched.

– Richard Metzger

Photo: Steve Jobs in 2003. Credit: Ben Margot / Associated Press

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