Apple Is Out to Blow Up the Cable TV Model

Bloomberg reports:

After years of complaining about having to pay for obscure TV channels they never watch, American consumers might finally be getting their way.

The industry buzzword is “skinny bundles,” or Web services from providers such as Dish Network Corp. and Apple Inc. that offer just a few popular channels at a lower price.

The whittled-down packages are putting pressure on programmers that have relied on the 500-channel pay-TV universe to carry their less-popular niche networks. Apple plans to debut an online service this year with about 25 channels, according to people familiar with the effort. Dish’s Sling TV, unveiled in February, offers about 20 channels for $20 a month. Cable companies are pushing mini bundles with Web access, local channels and HBO for as low as $40 a month the first year to keep customers from fleeing.

“Consumers want lower price points,” Jason Hirschhorn, chief executive officer of media newsletter REDEF, said Monday on Bloomberg TV. “That means the packages are smaller and ultimately that puts pressure” on content producers such as Viacom Inc. and Discovery Communications Inc. These companies “have bundles of channels, maybe a bunch of which you don’t watch,” he said.

The struggle for competition.