#2 - The porn market is a niche market, mostly made of addicts, and while these people may keep coming back for more, catering to this market misses the other 95%+ of the market completely, while destroying a companies brand as anything the rest of society wants to deal with.
#1 is also off the mark. A TV line is not worth the move for Apple. Rather, iTV will be the key to delivering the content directly from iTunes (not just a computer to iTV...).
After setup, iTV will connect directly to iTunes, and the key is for Apple to deliver not only purchase of movies, but rentals as well, completely taking out Blockbuster and Netflix in one swift move. $3.99 is the threshold for rentals, so we shall see if Apple can hold to that pricing or no...
Lastly, iTunes through iTV will eventually deliver al-carte Networks. Want ESPN, TNT, Discovery, etc... Not a problem, $2.99 a month per, or $3.99 a month per for HD versions.
No one-year commitment programs, with 280 channels you don't want, with a $60 a month fee. Just pick the channels you want and enjoy.
Cable and Dish companies will be turned upside down and Networks will love this, as it will allow them leverage against Cable and Dish, rather than being dictated too.
Apple will make a tiny, tiny fraction in profits out of the $2.99 a month pay per channel fee, much like it squeaks out money from iTunes. The rest goes to the network and bandwidth costs for Apple.
Limitation: Bandwidth. While over 50% of homes in the US now have "broadband" only a fraction of those have FiOS or "superbroadband" services, making at least HD a non-play for most.
However, this model will push people to paying $10 a month for a higher broadband connection, while dumping their $50+ cable/Dish fees.
Verizon should love this, while Comcast's cable and interent divisions will be at eachothers throats.
Should be a fun ride.
Apple already do No.1, the iTunes-powered all-in-one flat-panel HDTV system.
It's called the 24" iMac.
I've got the 17" model on my loungeroom coffee table and with 2 EyeTV tuners, Front Row and the Apple Remote (and wireless keyboard and mouse) it has replaced our TV, 5-CD player, VCR, DVD player, Newspapers, magazines etc.
Just wait as Steve unveils the 30" version and bigger.
-Mart
Commenting by HaloScan
