“I am sure smarter people than us will figure this out,” he said. “But that’s why, when we say that Apple TV is a hobby, that’s why we use that phrase.”

Apple Said to Seek Show-Rental Deal

By BRIAN STELTER and MIGUEL HELFT

Apple, which is widely expected to announce a revamped product for television sets next month, is pressing the television networks to rent their TV series through its iTunes service for as little as 99 cents an episode.

The News Corporation, parent of the Fox network, and the Walt Disney Company, parent of ABC, are close to deals for iTunes rentals at 99 cents each, according to network executives with knowledge of the discussions who spoke Tuesday on the condition of anonymity. But the executives emphasized that there were still sticking points in the negotiations.

The executives said NBC Universal, parent of the NBC network; the CBS Corporation, parent of CBS; and Time Warner, parent of the TNT and TBS cable channels, all had reservations about the proposal. But the companies apparently have not ruled out a rental deal at some point.

The companies uniformly declined to comment on Tuesday. The executives spoke on the condition of anonymity because their employers had not authorized them to discuss the negotiations.

Apple declined to comment on Tuesday about any coming events or products.

Apple has been frustrated in its efforts to penetrate the living room, but many analysts expect the company to continue trying. The talks with the studios seem to indicate that the company is making a renewed push in that area.

The iTunes store currently sells TV episodes for $1.99 and $2.99 apiece, but its rental activities are limited to movies. The company is said to believe that inexpensive rentals of TV episodes would enhance its Apple TV and iPad products.

Allowing some rentals at 99 cents would be a shift in attitude for the networks, which were said to be skeptical of the proposal when Apple made it last winter. At the time, they fretted about the possible damage that low rental prices would do to sales of DVDs and electronic episodes on iTunes and Amazon.com.

Apple, however, has apparently kept up the pressure. Bloomberg News first reported on the renewed talks about the rentals on Tuesday.

The talks appear to be pegged to an Apple product introduction. Analysts anticipate that the company will hold an event in September to announce new products, including an updated iPod Touch and a revamped version of Apple TV, a product that Apple’s chief executive, Steven P. Jobs, has referred to as a hobby.

Apple TV helps to bring Web content to television sets, but it has been perceived as a dud. In June, Mr. Jobs laid out his frustration with the TV industry’s business model and seemed to suggest that any Apple efforts in that area would be modest.

“The problem with innovation in the television industry is the go-to-market strategy,” Mr. Jobs said at a technology conference, singling out the subsidized set-top boxes provided by cable and satellite companies.

“That pretty much squashes any opportunity for innovation because no one is willing to buy a set-top box,” he said.

Mr. Jobs suggested that until those industry dynamics changed, Apple was likely to continue tiptoeing.

“I am sure smarter people than us will figure this out,” he said. “But that’s why, when we say that Apple TV is a hobby, that’s why we use that phrase.”

The revamped Apple TV is expected to have a new user interface and employ the same iOS software used on the iPhone and iPad.

Brooks Barnes contributed reporting.

Steve Jobs is the most understaed man in the iTV biz – and brilliant too.  Read on:

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Will TV last as it is today in its present form?

What’s going to happen when we can watch anything on-line we see on TV today or in the theaters instantly on-line (and that image is delivered to your living room or any TV) ? What happens to the ‘per subscriber’ guarantees that programmers pay cable ops to carry their satellite feed? And when I can get CNN for free on-line instantly via the Internet? Or Noggin? Or Lifetime? Or Disney? Right now I subscribe to Time Warner – I get about 150 channels. I think we watch the following: 3 ‘local’ channels (ABC, NBC and CBS), Lifetime (wife), Noggin and Boom (daughter) and ESPN and an occasional HBO movie. That’s 8 channels. If I pushed that I can probably include several others like Turner Classic Films, AMC and Discovery. But not too many beyond that.

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Since I can remember, cable companies have controlled what I watch and when I watched it. If a cable op. didn’t like the a channel, it wouldn’t carry it and we couldn’t see it. We were in a closed, 4 wall environment. We are still in that environment, but the walls are coming down. Very slowly. And the big three TV guys are in total denial. They are programming like its still 1999.

In this new world of ‘TVnomics’, I no longer need to hope that my cable operator will carry a particular program. With the likes of Hulu, YouTube, TV.com, and a few other content aggregators, I’m no longer tethered forever to Time-Warner. Using Amazon or Netflix I can watch on-line nearly anything I can find on my Time-Warner delivered TV service. And this has only really been possible since approximately 2 yrs. and 3 months ago (May, 2008) when Hulu launched.

So we have been seeing very ‘non-traditional’ programming hawking itself as a TV show for the web. Shows on no budgets, small ones and even big one. Some of these shows are being pushed out to the web by the networks (trying to find some viewer traction), and some by independent suppliers. All of them for the most part are sub-par and relatively few advertisers have climbed aboard.

Instead, the networks think that if they tease the traditional TV audience they have with bits and snippets of content found on TV pushed onto the web, they can have TV on the web or call it ‘Web TV’. Why in the world don’t CBS, NBC or ABC stream this ‘live’ simultaneously with broadcast? Why can’t they put the same show and advertisers on-line day and date with its broadcast on TV? Won’t this substantially help grow the very business on-line they fear now? Yes, I bet it would.

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And in the long run, not too much of what they can do will prevent us all from getting it on-line. Once the majority of us have fat pipes able to deliver a TV show and watch a show seamlessly (think FIOS) as if it WAS TV, then instead of their being 95 million cable homes and 200 million homes with TV’s, there will be hundreds of millions of homes with TV’s – they’ll just be connected to a fat, dumb pipe. This changing of the guard won’t take that long – figure in the 5 years or so, things will REALLY shift.

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