Disney is one of the partners Apple is working with on its upcoming streaming television service, and according to a new report from The Street, Disney and Apple are disagreeing over how many Disney-owned channels will be available in Apple's television content bundle.
Disney is pushing Apple to include most of its channel offerings, while Apple wants to offer fewer channels in an effort to keep prices lower. Disney's channels include ESPN and Disney Channel, along with several spinoffs channels like Disney Junior, Disney XD, ESPN2, ESPN Classic, and more. Disney also owns ABC channels that Apple feels are essential, like ABC Family, so Apple may be forced to agree to offer more Disney channels to ensure negotiations go smoothly.
Disney is said to be asking for "the strongest deal it can get," according to one of The Street's sources, to avoid upsetting other cable providers and endangering existing revenue streams.
Disney likely would insist that Apple offer all of its channels to as many subscribers as possible. Many cable operators have "most favored nation" clauses in their contracts with Disney that could require ESPN to be carried as widely as possible. If Apple enabled its subscribers to pick and choose which channels to take, other cable channels could use that clause to cut back on lesser watched Disney channels.
Disney CEO Bob Iger sits on Apple's board of directors and was a longtime friend of former Apple CEO Steve Jobs, and the two companies have worked together several times over the years. Disney was the first company to partner with Apple to offer content like television shows through iTunes in 2005. Despite the disagreement over the number of Disney channels to be included in Apple's television service, The Street suggests that Disney is likely to remain one of Apple's content partners.
Apple is planning to announce its streaming television service and its content partners at the Worldwide Developers Conference in June, ahead of a fall launch. Rumors have suggested the service will include approximately 25 channels and will be offered at a price between $30 and $40.
Apple's television service announcement may also be accompanied by the launch of a new Apple TV set top box, which is said to be in the works. The set-top box is rumored to include a full App Store, Siri integration, an A8 processor, and a dramatic increase in internal storage.
Top Rated Comments
We have plenty of "cable consolidators" already. Since I don't watch sports, if it must include ESPN, then I won't buy it - I shouldn't have to pay an extra $10. Sports fans should be able to subscribe to what they want - ESPN or whatnot, and shouldn't be excluded just because I'm not interested. Lets see some competition, not more of the same.
Personally, I just watch content. I really have no interest in live, streaming TV that forces you to watch certain content at certain times of the day. That's a medium that only made sense in the days of limited broadcast spectrum. It's nonsense when it comes to IP-based delivery.
The only time "channels" make sense is for sports. But even then, I'd prefer to just choose the game I want to watch, rather than trying to work out whether it's on "channel one" or "channel two", then having it cut off when it goes into overtime because a game deemed more important is starting.
Just license the content from Disney and scrap the whole "channel" idea. Channels made sense in the 1950s and 60s. They're a technological dead-end now.
Apple already has the iTunes store in which people can choose commercial-free shows and has for years now. Problem: we don't want to pay for that; we want it dirt cheap.
DirecTV/Dish/others have services where you can hide all of the "useless" channels you don't want and only display the ones you do want in a "Favs" guide. This way the subsidy dollars made from commercials (including most of that subsidy made from commercials running on channels we never watch or while we sleep) keep contributing to the pot. Problem: we instead have this delusion that an Apple can plug in, offer us just the channels or shows we want for for a fraction of what we pay now. Nobody else- Apple included- is interested in turning that delusion into reality; they all want to make MORE money, not less in any "new model".
I'll guess that neither of those would be what you want and I'll further guess that what you want is closer to the usually-spun dream of "everything I want, commercial-free, for a tiny fraction of what I pay now". Problem: we're not going to get that.
If there's ever some kind of al-a-carte option other than what we have now in iTunes, I fully expect the math to work that we'll get our 10 favorite channels (or shows) for about 30% MORE than we can our 10 favorite channels + 190 channels "we never watch." And then we'll probably be clamoring for some kind of bundling with discounts and subsidies to try to get back to how it "used to be."