Apple Frustrated by Inability to Reach Deals With TV Programmers for Television Service
ESPN president John Skipper spoke with The Wall Street Journal in an interview this morning, revealing some insider details on Apple's struggle to establish deals with content providers for a streaming television service.
According to Skipper, Apple is "frustrated" by its ongoing inability to find a mutually advantageous way to work with programmers. Though no deals have been established, ESPN "continues" trying to work with Apple on some kind of partnership.
They are creating a significantly advantageous operating system and a great television experience and that television experience is fabulous for sports. We are big proponents of believing it would be a fabulous place to sell some subscriptions. We have ongoing conversations. They have been frustrated by their ability to construct something which works for them with programmers. We continue to try to work with them.
Skipper's comments are in line with recent rumors made by CBS CEO Les Moonves, who said Apple "pressed the hold button" on its streaming television plans after it was unable to establish the necessary deals. Rumors throughout 2015 suggested Apple was aiming to create a web-based television product that would offer a small bundle of channels for $30 to $40 per month.
Apple has been attempting to create some kind of television service since 2009, but the company has run into resistance from cable and content providers time and time again because of a reluctance to interrupt existing revenue streams and fundamentally shift the way cable is provided.
ESPN's deal with Sling TV, a service that offers streaming access to major cable channels, offers some insight into where Apple may be running into trouble establishing deals. There is an option in ESPN's contract with Sling TV that lets the deal be terminated should it cannibalize ESPN's core pay TV business, something Apple likely wouldn't have agreed to. Apple is also said to have run into trouble getting content providers to unbundle their channels.
While Skipper believes 2016 will see "further announcements" of different streaming packages from new companies, it is not likely Apple will be among them. The company's content struggles have caused it to put its streaming service on hold, with plans to instead focus on the tvOS App Store and its position as a platform that gives media companies tools to sell content directly to customers.