• by Wayne Friedman , November 2, 2009

With the noise level rising over consumers possibly paying a fee for TV shows online, now comes a report that iTunes is considering an all-you-can eat $30-a-month TV service.

A new subscription service would turn iTunes into a pseudo cable and satellite TV operator -- a company that charges monthly fees for traditional TV/cable networks. The difference is that iTunes service would be sans advertising. Shows would not be distributed via linear networks -- but, as iTunes does now, by program. The story was first reported in AllThingsD.com.

Apple's iTunes Stores is the original digital video Internet service, launching with Disney-ABC television shows back in October 2005 as a fee-based, ad-free service. Right now, it sells subscription season-long passes for some TV shows. Currently, TV shows are priced at $2.99 an episode.

Soon after iTunes' early success, new digital TV/video business believed that ad-supported, free services would rule the day. Only recently, in conjunction with the weakness in the economy and TV/ video advertising, has the pay model been seen as offering greater value.

The report said iTunes executives were having initial talks with TV networks. When Media Daily News contacted Apple, a spokeswoman said: "We don't comment on rumors or speculation." Network executives at NBC Universal, CBS, Fox, and Disney-ABC did not respond to inquiries by press time.

A new pay-TV monthly service from Apple would have a big customer base, drawing from almost 100 million iTunes accounts on file. That could make it an instant competitor with a Hulu.com (which has some 38.5 million unique visitors a month), or the much smaller Comcast's Fancast. Both run premium network and cable TV programs.

Hulu and Fancast are currently free, ad-supported digital sites. There has been speculation that Hulu might consider adding some sort of consumer payment model. Comcast has been pushing its TV Everywhere initiative that would require consumers to be Comcast or other cable system customers before being able to view TV programming online.