Apple's New Online TV Service Gives Cable Providers a Run for Their Money

Apple (APPL) just revealed the details of its plan to create an online subscription television service. Sources say the tech giant is working with programmers to offer a streamlined bundle of television networks that could come as early as this fall and will be available for viewing on a variety of Apple devices (iPhones, iPads and Apple TV set-top boxes), reports The Wall Street Journal.

Which Channels Will Apple TV Offer?

Apple's online TV service is expected to offer 25 channels from broadcasters such as ABC, CBS, Fox, Walt Disney and 21^st Century Fox. The new service will bundle a small selection of large networks together and leave out many of the smaller networks that often come in cable packages offered by other major providers. The only network reportedly not involved in the discussions is NBCUniversal, which owns NBC broadcast stations E! Entertainment, Syfy, Bravo Media and more.

According to The Wall Street Journal, people close to the story said NBCUniversal is being excluded from talks because of a falling-out between Apple and Comcast Corp (CMCSA), a NBCUniversal parent company. Apple and Comcast were reportedly taking last year about collaborating on a streaming service, but Apple started to suspect Comcast wasn't really serious about the deal, as the company was also developing its own X1 Web-enabled set-top box.

Apple could have a hard time competing in the market without NBCUniversal channels — the company has a portfolio of 15 national cable networks, 15 regional sports and news networks and more than 60 international channels. Still, the cable industry is ripe for disruption, and with the rise in popularity of streaming services like Netflix and Hulu, Apple might not need NBCUniversal to become a major player in this space.

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How Much Will Apple's Online TV Service Cost?

Some media experts say the service will cost anywhere from $30 to $40 a month.

There are already some television streaming packages that offer competitive rates, but they don't include a wide variety of shows from broadcast networks. For example, Sling TV, Dish Network's streaming service, costs $20 a month but only offers 16 channels, reports CNET. The Wall Street Journal also reports Sony Corp. is going to launch a bundle of streaming channels, but the cost is rumored to exceed Apple's offering.

Can Apple Compete With Netflix and Hulu?

In the early days, some experts speculated the concept of Apple's subscription TV service was too radical, but now it seems the idea is gaining traction. As of last week, Apple signed on as the exclusive digital launch partner for HBO Now, the soon-to-be-released premium cable streaming service from Time Warner Inc.

Still, as The Wall Street Journal pointed out, Apple might have a hard time getting rights to the catalog of programming it needs to dominate the streaming industry. In order to create a vast library of programs consumers can watch on demand, Apple needs to offer full seasons of shows from some major media companies — many of which already have deals with other streaming services, like Netflix and Hulu. Apple already allows users to stream these services through their Apple TV devices, but they are not part of Apple's subscription service.

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As with many major Apple initiatives, only time will tell if Apple cable will gain traction with television fans. In a product event last week, Apple CEO Tim Cook said, "Apple TV will reinvent the way you watch television, and this is just the beginning."

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