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Apple's TV Plans Fell Apart Over Content Owners' Resistance to Skinny Bundles
Following comments made by CBS CEO Les Moonves on the state of Apple's rumored television service, news leaked confirming Apple has put plans for such a service on hold for the time being due to difficulties securing content deals.
While Bloomberg spoke to a source that chalked the failed negotiations up to media companies demanding more money than Apple wanted to charge for the service, Re/code's Peter Kafka has added some additional context, pointing towards a reluctance to unbundle channels as another factor that killed the service.
Apple was hoping to offer a limited bundle of approximately 25 channels at a price of $30 to $40 per month, but even early on, there was pushback from content providers who wanted Apple to offer all of their content rather than just a few select channels. A rumor in April concerning negotiations between Disney and Apple suggested Disney was pushing Apple to include most of its content, including ESPN, Disney Channel, Disney Junior, Disney XD, ESPN2, ESPN Classic, and more, while Apple wanted to offer just a few of Disney's channels.
According to Kafka, the situation with Disney happened with other content providers, many of whom did not want to offer just a small selection of channels from their content catalogs.
According to Re/code's TV industry sources, Apple has been "quite vocal" about the end of negotiations with media companies, which stopped a couple of months ago. While Apple has suspended its plans for the time being, rumors have suggested the company isn't "giving up entirely" on a television service.
For the time being, Apple will focus on its tvOS App Store, offering content providers a platform to sell content to customers. As Kafka says, Apple may be able to change the minds of media companies if it can prove the Apple TV is a "transformative platform," but the company has a long way to go to reach that goal.
While Bloomberg spoke to a source that chalked the failed negotiations up to media companies demanding more money than Apple wanted to charge for the service, Re/code's Peter Kafka has added some additional context, pointing towards a reluctance to unbundle channels as another factor that killed the service.
Apple was hoping to offer a limited bundle of approximately 25 channels at a price of $30 to $40 per month, but even early on, there was pushback from content providers who wanted Apple to offer all of their content rather than just a few select channels. A rumor in April concerning negotiations between Disney and Apple suggested Disney was pushing Apple to include most of its content, including ESPN, Disney Channel, Disney Junior, Disney XD, ESPN2, ESPN Classic, and more, while Apple wanted to offer just a few of Disney's channels.
According to Kafka, the situation with Disney happened with other content providers, many of whom did not want to offer just a small selection of channels from their content catalogs.
Apple's beef with the TV Industrial Complex is a bit more nuanced. It's also a significant one: If Apple gets its way, TV will undergo a significant change, just like the music business did when Apple launched its iTunes store in 2003. [...]iTunes chief Eddy Cue offered media companies an option to sell additional tiers of channels (such as a sports package) alongside a core service, but refused to compromise on offering a larger number of base channels. "He doesn't want to have filler," a TV executive told Re/code.
If Apple gets its way, it means the traditional pay TV package, which averages around 100 channels, will get shrunk by nearly 80 percent. And while TV executives will say that they understand that consumers don't want to pay for channels they don't watch, all of them will argue that their channels are must-haves.
According to Re/code's TV industry sources, Apple has been "quite vocal" about the end of negotiations with media companies, which stopped a couple of months ago. While Apple has suspended its plans for the time being, rumors have suggested the company isn't "giving up entirely" on a television service.
For the time being, Apple will focus on its tvOS App Store, offering content providers a platform to sell content to customers. As Kafka says, Apple may be able to change the minds of media companies if it can prove the Apple TV is a "transformative platform," but the company has a long way to go to reach that goal.
Tag: recode.net
Buyer's Guide: Apple TV (Don't Buy)
[ 334 comments ]
Top Rated Comments
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54 months ago
For the love of Pete,
Here's what you do Apple:
Figure out a way to integrate this:
into this: ------->
and also add this:
to this --------------------->
Pour your billions of dollars and engineering to perfecting OTA reception. Slap on the usual Apple interface polish (7.1 WHABC-TV listing = ABC) and....
Voila! The TV industry will collectively **** its pants and will come back to the table and reason for a more acceptable price.
This would terrify them.
Here's what you do Apple:
Figure out a way to integrate this:
into this: ------->
and also add this:
to this --------------------->
Pour your billions of dollars and engineering to perfecting OTA reception. Slap on the usual Apple interface polish (7.1 WHABC-TV listing = ABC) and....
Voila! The TV industry will collectively **** its pants and will come back to the table and reason for a more acceptable price.
This would terrify them.
54 months ago
People are bailing the cable/satellite game because content is useless on almost all channels. Pick-n-choose entertainment like Netflix has begun to rule. The dinosaur media, corrupt with useless content supported by package schemes, is going to have to rot off a few limbs before it limps into the bandwagon of the future.
54 months ago
There's no way I'm spending $30-40 for content. No way. There's a reason I don't pay for cable, I don't want to pay for a bunch of channels that I'll never watch.
54 months ago
Channels? Who wants channels? Most people want specific SHOWS and movies. The "channel" concept itself is a dying dinosaur.
54 months ago
You mean to tell me that networks want to continue requiring a bundle of a bunch of channels you don't want tacked on the the few channels you actually do want so they can charge more for the "privilege"? Shocking, I tell you!
54 months ago
I'm doing my part as a cord cutter. I get the OTA channels plus HBO, Netflix, and Amazon Prime.
My prediction is that when Netflix and Amazon Prime start scaring cable and broadcast channels, we'll see some deals. Until then, they will continue the slow bleed.
My prediction is that when Netflix and Amazon Prime start scaring cable and broadcast channels, we'll see some deals. Until then, they will continue the slow bleed.
54 months ago
There's no way I'm spending $30-40 for content. No way. There's a reason I don't pay for cable, I don't want to pay for a bunch of channels that I'll never watch.
$30-40 will only end up getting you maybe 5 channels when all this a la carte stuff is all said and done I wager :p
54 months ago
There's no way I'm spending $30-40 for content. No way. There's a reason I don't pay for cable, I don't want to pay for a bunch of channels that I'll never watch.
What if you had a pool of 150 channels, and you could choose the 15 you want for $30, and $2 for each extra channel that you might want to add?
(of course this would include "on demand" for stuff that has been on the air already).
54 months ago
The current system is definitely going to collapse, but I'm not sure Apple's plan for a small bundle will work. The fundamental problem is that everyone only watches like 10% of the channels they have access to (or whatever the number is) but it's not the same 10%.
The vast majority of the channels I pay for, I will never watch. And the vast majority you pay for, you will never watch. Unfortunately, what we do watch might not overlap at all. So people may only need 20ish channels or something, but it's not the same 20ish. Trying to force a specific thin bundle for everyone is not good for consumers unless what they pick happens to be your favorites.
So, yeah, the big cable companies need to adapt or die, but they do have a point when they say all of their channels are in some way must-haves.
The vast majority of the channels I pay for, I will never watch. And the vast majority you pay for, you will never watch. Unfortunately, what we do watch might not overlap at all. So people may only need 20ish channels or something, but it's not the same 20ish. Trying to force a specific thin bundle for everyone is not good for consumers unless what they pick happens to be your favorites.
So, yeah, the big cable companies need to adapt or die, but they do have a point when they say all of their channels are in some way must-haves.
54 months ago
Turns out some guys finally figured out game theory.
The music execs didnt against apple with itunes..
the telecom carriers didnt against apple with iphone
and the book publishers didnt against apple with ibooks (although the lawyers did)
The network execs did.
As soon as one network buckles, everyone will be forced to buckle.
But if everyone bands together, apple will have no power and everyone will continue to enjoy being able to charge customers for channels they dont want.
Eddie Cue didn't manage to conjure his magic this time
The music execs didnt against apple with itunes..
the telecom carriers didnt against apple with iphone
and the book publishers didnt against apple with ibooks (although the lawyers did)
The network execs did.
As soon as one network buckles, everyone will be forced to buckle.
But if everyone bands together, apple will have no power and everyone will continue to enjoy being able to charge customers for channels they dont want.
Eddie Cue didn't manage to conjure his magic this time
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