Fascinating chart on AlleyInsider this week noting that, for the first time ever, pay TV has lost subscribers. A little earlier in the week, the NYTimes argued that TV is changing (web, applications, on-demand) but paid television still rules the livingroom.

I shared the NYTimes article on Facebook with the following the note: “We will break our dependence. But – it will still likely include paywalls… but rather than for cable – it will be for content.”

And that’s why I believe the forthcoming Apple iTV is important to the TV / Web transition. First, it’s at the right price: supposedly $99. And knowing Apple, it be designed simply enough that connecting the device to the TV and the web will be easy as 1. 2. 3. Until now, consumers had two options – both of which disqualified the above points (price and simplicity):

1. Buy a mini-computer (ie Mac Mini or Dell Zino) and connect it to the TV. Plus: full operating system and highly customizable. Con: very expensive (~$500-$1,000), complicated and techy.

2. Purchase a brand new, web-enabled TV OR a gaming device. Pro: out of the box usage. Con: expensive and limited / poor experience, content selection, etc.

If the rumors are right – Apple can change this with:

- a $99 price point (fraction of any other reasonable alternative)

- an iOS interface that tens of millions of users are familiar (iPhone, iPod Touch, iPad)

- simple integration and web browsing (try using the web on XBox or PS3 – it’s *very* limited)

- and an unmatched catalog of content and applications (not to mention developers – which is more important)

Suddenly web browsing, iTunes, Pandora, Netflix streaming, MLB At Bat, etc are all imaginable. And its a more natural solution – at least in the short term – than through the television manufacturer, the gaming devices, etc.

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