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Apple and ESPN may be set to revolutionize TV, but not here

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It takes some piecing together, but evidence is mounting that Apple Inc. is set to launch the biggest revolution in television programming since the first cable company crawled out from the primordial corporate ooze and began overcharging its customers. But this revolution may skip Canada entirely.

The notoriously secretive Apple management team has acknowledged a television project that extends well beyond the current Apple TV set-top box. Steve Jobs famously stated, more or less from his death bed, that he had "finally cracked television."

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A 2000-page "Collected Rumours About Apple's New TV Set" tome could easily have been published over the past few years – the speculative fervour has been that intense. Yet nothing has happened.

Now, however, it's starting to look like ESPN is about to crack the whole thing open. Apple has already signed a deal with ESPN to offer select programming through the Apple TV box. This service, however, is only available to U.S. cable subscribers who already pay for ESPN.

More importantly, in a recent interview with Bloomberg, ESPN CEO John Skipper reported that the company has held "preliminary talks to offer programming on a Web-based TV service."

To date, the biggest hold-up for the Apple television set has been content – that is, getting networks like ESPN and HBO to defy their cable overlords and offer their programming directly to Apple devices. Internet-based broadcasting would bypass the cable companies and make this eminently possible.

News and sports content is particularly important. Viewers can download their favourite shows any time, but most like their news and sports live. For many, one or the other is the only reason they still have a cable subscription.

I'm only guessing, but I suspect Apple is finished developing the actual television hardware. They've certainly had enough time. What they've been waiting for are content deals and the hints from ESPN suggest that the floodgates may be about to open in this regard.

Exciting times for American consumers may be ahead, but Canadians should expect at least some frustration when Apple finally unveils the new TV.

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The CRTC has already expressed concern regarding Netflix Inc.'s potential encroachment into domestic cable company territory. The "iTunes as television content provider" idea could throw them into apoplexy. Delays before the new service is available in Canada, if not outright rejection, are inevitable. Note that no ESPN channels are currently available domestically.

The CRTC may find that the Internet-based television revolution is difficult to prevent. It's not that difficult to fool the Web into thinking you're sitting in another country. So we'll see.

Apple stock is cheap relative to its history, so I'm not attributing its recent strength to a rumoured iTV launch – it's likely just bargain hunting. But the company does have an admirable history of disrupting media industries, and the mere hint the company has set its sights on television is fascinating, and likely a positive indicator for future corporate growth.

Scott Barlow is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here to read more of his Insights, and follow Scott on Twitter at @SBarlow_ROB.

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About the Author
Market Strategist

Scott Barlow is The Globe's in-house market strategist. He is a 20-year veteran of Canadian investment banks, including Merrill Lynch Canada, CIBC Wood Gundy and Macquarie Private Wealth (MPW). He was a highly ranked mutual fund analyst for 10 years and then, most recently, the head of a financial adviser support team at MPW. More

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