Apple TV isn't a worry for Comcast -- yet

Comcast (CMCSA), the world's largest cable-TV company, may face a threat from so-called cord-cutters who drop its service and switch to new rivals such as Apple TV, but it's a slow-moving one.

Indeed, Apple TV will offer only about 25 channels, a fraction of the 189 channels the average U.S. home receives now. Analysts such as Forrester Research's James McQuivey don't expect Web-based services to match the breadth of offerings found on cable and satellite services anytime soon. He notes that only about 10 percent of consumers have cut the cord or plan to in the foreseeable future.

"There are too many channels that have to be negotiated, and even if you get 'most' of them, it won't matter if you don't get all of the 10-12 channels that people typically watch in a month," he wrote in an email to CBS MoneyWatch. "With these new options, perhaps another percent will consider it, and some of them won't go through with it when they add up the inconvenience of having to subscribe to multiple online services and still only get 80% of what they want to watch."

A Comcast spokesman pointed to recent upbeat statements Chief Executive Brian Roberts made on the company's earnings conference call. He noted that the Philadelphia-based company added 1 million broadband subscribers in 2014 for the ninth year in a row, a sign that cord-cutters aren't divorcing themselves from the company entirely.

He added that customers have taken a liking to Comcast's X1 Web-enabled set-top box. "The reaction to X1 from customers has been fantastic, resulting in lower churn, more outlets connected and an increase in overall viewership led primarily by higher on-demand and DVR consumption," he said. "And it's bearing fruit in our operating results as video subscriber trends were the best in seven years."

Things are going Comcast's way for other reasons as well. SNL Kagan has forecast that broadcasters will reap $9.3 billion in what is known as retransmission fees by 2020, almost double the $4.9 billion they got in 2014. They aren't likely to offer Apple (AAPL) and other upstarts any discounts. Indeed, economists have long argued that allowing customers to pay only for the channels they watch would ultimately drive up prices and reduce choice.

"They can't abandon the revenue streams that are their bread and butter," said Greg Ireland, an analyst with IDC, adding that new players still have to secure content "on terms that are acceptable to the content providers."

Quitting pay-TV service, though popular with younger consumers, may not be worth the hassle for many others. According to data from Bloomberg Intelligence, the average monthly U.S. cable bill was $87 last year, an increase from $80 in 2011. But the fees from these Web-streaming services can add up quickly and may result in costs that offer little savings to consumers.

Apple TV is a case in point. The service, which includes all the broadcast networks except NBC, will be priced at between $30 and $40 per month, according to The Wall Street Journal. That may be sufficient for a niche market that doesn't include fans of "Game of Thrones." But loyalists to that popular HBO series would have to shell out another $14.95 per month to stream the Time Warner (TWX) channel's HBO Now service.

And if they also want to keep up with Netflix's (NFLX) "House of Cards," they would need to subscribe to that company's services , which start at $7.95 a month. Amazon (AMZN) provides access to video content, including its critically acclaimed "Transparent," for about $8.25 a month.

Sports fans also face a conundrum. Walt Disney's (DIS) ESPN sports channel will be offered in Dish Network's (DISH) Sling TV service, which will cost $20 per month (no word yet about whether ESPN will be part of Apple TV).

Local sports networks such as those owned by Comcast aren't going to let fans stream the games that the networks broadcast for free, either. Neither will NBC, CBS (CBS, parent of CBSNews.com) and Fox (FOXA), which have spent billions in recent years on sports broadcasting rights and have launched their own sports networks in recent months.

'"Those channels aren't being given away by any stretch of the imagination," said IDC's Ireland, noting that ESPN charges the highest fees of any channel. "Surely they are not giving discounts to these small upstarts. They will have to pay dearly to get sports channels."

For now ESPN isn't saying much.

"We are always talking to potential affiliate partners about new ways to distribute our programming, but we have nothing to announce at this time," wrote Katina Arnold, a spokeswoman for ESPN, in an email to CBS MoneyWatch.

The other issue facing Apple is timing. The Wall Street Journal reported that Apple hopes to roll out Apple TV in September, in time for the start of the new TV season.

"I think that is optimistic," said Needham & Co. analyst Laura Martin, adding that lawyers for the content companies "really do cross the Ts and dot the Is. I would guess that skips to early next year. "

Gartner analyst Van Baker added: "The cable and satellite operators are not happy about this, so last-minute glitches could always emerge."

Apple certainly has the potential to upend the decades-long business model for TV much like it did with the music business. Still, it has many obstacles to overcome that are formidable even for a company of its enormous size and influence.

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.