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The rumors from last year about Apple preparing to launch a subscription video service were at best premature. One analyst says that without a new content offering, Apple TV isn't very special.

Apple introduces a new Apple TV with support for 1080p HD photos and videos.

Apple still has no subscription video service, and without it, Apple TV is nothing to get excited about, one industry analyst says.

As part of Apple's press event for the iPad today in San Francisco, the company announced that Apple TV would get an upgrade. The system will support 1080p movies and TV shows. Navigation was improved. Movies and TV shows will be supported in iCloud so they can be accessed from iPads and iPhones as well.

Dan Rayburn, principle analyst for research firm Frost & Sullivan, is unimpressed. He argues that Apple TV could be so much more, if it had a subscription service similar to Netflix's. Rayburn predicts that without such a service, Apple TV will remain a so-called hobby for Apple.

"While it's nice to see Apple offer 1080p support on their device," Rayburn wrote on his blog today, "to date, they have sold less than 5 million second-generation Apple TV units in the past 18 months. Without some kind of content subscription service, this updated Apple TV isn't going to disrupt the market at all."

It's not as if Apple hasn't tried to get a subscription service going. Rayburn says an executive with a major cable company told him that Apple has been in discussions about launching a subscription video service for at least two years. And remember all those rumors from last year, when analysts and bloggers sent the hearts of Apple fans aflutter by reporting that Apple was planning to launch a Netflix rival?

Apple has definitely talked to the studios and TV networks about such a service, but my film industry sources say the major Hollywood studios are less interested in renting movies than in selling them. They still want to rent, but with DVD sales in decline, the focus is on sales.

Rayburn believes that Apple won't build its own TV sets unless it can disrupt the market, and there just isn't a lot of room to do that. Creating TV sets with, say, higher resolutions or superior screens would force the price up too high, he said. With the market for TV sets hurting, he doesn't think that Apple will do anything until it can come at the sector in a sexy new way.

Originally posted here:
For Apple TV, subscription video service still missing

The rumors from last year about Apple preparing to launch a subscription video service were at best premature. One analyst says that without a new content offering, Apple TV isn't very special.

Apple introduces a new Apple TV with support for 1080p HD photos and videos.

Apple still has no subscription video service, and without it, Apple TV is nothing to get excited about, one industry analyst says.

As part of Apple's press event for the iPad today in San Francisco, the company announced that Apple TV would get an upgrade. The system will support 1080p movies and TV shows. Navigation was improved. Movies and TV shows will be supported in iCloud so they can be accessed from iPads and iPhones as well.

Dan Rayburn, principle analyst for research firm Frost & Sullivan, is unimpressed. He argues that Apple TV could be so much more, if it had a subscription service similar to Netflix's. Rayburn predicts that without such a service, Apple TV will remain a so-called hobby for Apple.

"While it's nice to see Apple offer 1080p support on their device," Rayburn wrote on his blog today, "to date, they have sold less than 5 million second-generation Apple TV units in the past 18 months. Without some kind of content subscription service, this updated Apple TV isn't going to disrupt the market at all."

It's not as if Apple hasn't tried to get a subscription service going. Rayburn says an executive with a major cable company told him that Apple has been in discussions about launching a subscription video service for at least two years. And remember all those rumors from last year, when analysts and bloggers sent the hearts of Apple fans aflutter by reporting that Apple was planning to launch a Netflix rival?

Apple has definitely talked to the studios and TV networks about such a service, but my film industry sources say the major Hollywood studios are less interested in renting movies than in selling them. They still want to rent, but with DVD sales in decline, the focus is on sales.

Rayburn believes that Apple won't build its own TV sets unless it can disrupt the market, and there just isn't a lot of room to do that. Creating TV sets with, say, higher resolutions or superior screens would force the price up too high, he said. With the market for TV sets hurting, he doesn't think that Apple will do anything until it can come at the sector in a sexy new way.

Read more here:
Still missing from Apple TV: subscription video service

Netflix (Nasdaq: NFLX) seems bent on showing up on your cable bill, and now it's starting to become painfully obvious why the dot-com flick-streamer is talking to cable providers about offering Netflix as a premium add-on service.

In a note to clients yesterday, Barclays Capital analyst Anthony DiClemente praises the move by pointing out how it should increase Netflix's subscriber base, lower its subscriber acquisition costs, and deliver long-term profit growth.

Obviously, it remains to be seen what the ultimate product will look like, but Netflix won't be able to charge more than the $7.99 a month it charges existing streaming subscribers. With cable companies historically taking roughly half of the revenue, how can Netflix, making $4 or so a month off each cable customer, be better off than it would be by reaching out directly?

Well, let's drag out the churn card.

As the world churns Netflix is no longer reporting its monthly defection rate, and there's a good reason for that. Streaming customers are a fickle lot. Netflix's churn for members taking out DVDs was never all that impressive, but at least they have unwatched Netflix DVDs around the house. They also have steady and predictable queues -- unlike with the streaming product, where a good chunk of a member's queues can be wiped clean by the end of a licensing deal.

In the last quarter that Netflix reported domestic churn -- last year's second quarter -- churn clocked in at a stubborn 4.2%. That's a monthly rate, implying that Netflix loses roughly half of its subscribers over the course of a year.

Now let's compare Netflix to DIRECTV (NYSE: DTV) . The country's largest satellite television provider reported its latest quarterly financials on Monday. The service provider with 19.4 million stateside subscribers -- and growing -- doesn't have any reason to hide its churn. Just 1.5% of its accounts are canceling every month. Maybe it's the gear. Maybe it's complacency. However, it would also follow that premium movie channels that cable and satellite television customers tack on would also have healthy loyalty rates.

If Netflix is just a small line item on your cable bill, you're less likely to nix the service than you would be if it was a stand-alone offering. And -- to Netflix's credit -- it's just too darn easy to terminate the service.

Apple leads the way One of the interesting developments surrounding yesterday's Apple TV announcement -- yes, it wasn't all iPad for Apple (Nasdaq: AAPL) yesterday -- was a partnership with Netflix. Apple TV owners can now sign up for Netflix directly through Apple's small set-top home theater gadget.

The new Apple TV will allow couch potatoes to stream Netflix in high-def 1080p, backed by rich Dolby Digital 5.1 audio. However, the interesting twist is that the subscriptions are managed through Apple iTunes.

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The Real Reason Behind Netflix's Cable Push

ISLAMABAD (AP) Pakistan is advertising for companies to install an Internet filtering system that could block up to 50 million Web addresses, alarming free speech activists who fear current censorship could become much more widespread.

Internet access for Pakistan's some 20 million Web users is less restricted than in many countries in Asia and the Arab world, though some pornographic sites and those seen as insulting to Islam are blocked. Others related to separatist activities or army criticism have also been, or continue to be, censored.

Few nations have so publicly revealed their plans to censor the Web as Pakistan is doing, however. Last month, the government took out newspaper and Web advertisements asking for companies or institutions to develop the national filtering and blocking system.

"They are already blocking a lot of Internet content, and now they are going for a massive system that can only limit and control political discourse," said Shahzad Ahmad, the director of Bytes for All Pakistan, which campaigns for Internet freedom. "The government has nothing to do with what I choose to look at."

The government doesn't currently list the sites it has blocked, or their number, or say who sits on the committee that decides what pages to shut down. Pakistan's Telecommunication Authority instructs the country's 50 Internet Service Providers to block sites. The ISPs, which receive their license from the PTA, are obliged to obey.

In November, the PTA ordered cell phone companies to block text messages containing a list of more than 1,500 English words it said were offensive. But the plan was dropped after public ridicule and complaints from cell phone companies about practicality.

The plan to censor the Internet comes amid unease over a set of proposals by a media regulatory body aimed at bringing the country's freewheeling television media under closer government control. With general elections later this year or earlier next, some critics have speculated the government might be trying to cut down on criticism.

The media proposals call for television stations not to broadcast programs "against the national interest" or those that "undermine its integrity or solidarity as an independent and sovereign country" or "contain aspersions against or ridicule the organs of the State."

Pakistan's Information Minister Firdous Ashiq Awan denied Wednesday that the government was seeking to curb the media.

"We want to see the media growing. We want to strengthen it," Awan said, emphasizing that the proposals were just that, and the government wouldn't implement them without the media's consent.

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Wanted: Censor for Pakistan's Internet

Germany's Internet community, gathered at the world's biggest high-tech fair, was up in arms Thursday at a draft law forcing Google and other similar sites to pay media firms for content.

"This draft is completely backward," fumed Bernhard Rohleder, director general of Bitkom, the German federation representing high-tech industries.

"We understand that media firms are looking for new ways to make money" when pitted against the Internet and free press, but a new tax "cannot be a substitute for developing genuine strategies for the digital era," he added.

The draft legislation, dubbed the "lex Google" as it targets mainly the Internet giant's "Google News" service, has recently been drawn up by Chancellor Angela Merkel's centre-right coalition.

Demanded for many years by powerful media groups such as Axel Springer and Bertelsmann, the government will put before parliament a law forcing Google and certain blogs and other sites to remunerate the papers providing the content.

The media groups argue that a user of "Google News" can simply read the short summaries offered on the front page to get his or her fix of the daily news, rather than clicking through to the paper concerned.

The US Internet giant, so the argument goes, therefore benefits via advertising without paying a penny for the actual content.

On the other side of the fence is an unusual coalition bringing together Google and campaigners for Internet freedom, who say the papers receive more clicks from the service and also gain more visibility.

Eric Schmidt, the executive chairman of Google, who opened the CeBIT high-tech fair along with the leaders of Germany and Brazil, said the tax "could slow the development of the Internet," according to local news agency DPA.

"It's a bit like the Yellow Pages paying companies for showing consumers their names and addresses," said the blogger Stefan Niggemaier, who believes the tax is akin to a government hand-out to the rich and powerful media lobby.

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German Internet users cry foul over Google news law