Apple's 'Hard-Nosed' Negotiating Tactics Leading to Trouble in Television Market

Apple's "assertive" negotiation tactics have made it difficult for the company to establish deals with cable providers and networks, reports The Wall Street Journal, stymieing its efforts to build a more robust television platform.

According to The Wall Street Journal, Apple started talking with the Walt Disney Company in early 2015 about getting Disney-owned content onto its then-planned streaming television service, but Apple executives, iTunes chief Eddy Cue in particular, made demands networks were not prepared to meet.

appletvappstore

In particular, Apple wanted to freeze for several years the monthly rate per viewer it would pay to license Disney channels. TV channels usually get annual rate increases and rely on them to fuel profit growth.

Disney balked. Similar talks with media giants that included 21st Century Fox Inc. and CBS Corp. also stalled.

Apple sees TV as a way to push further product growth, but persuasion tactics that have worked in the mobile phone and music industries aren't working in the television industry. Content providers are reluctant to agree to Apple's terms because it would compromise traditional revenue streams. As The Wall Street Journal points out, inking a "sweetheart" deal with Apple could lead to traditional cable distributors demanding similar deals.

Over the last several years, Apple has made several attempts to enter the television market, seeking deals with Time Warner, Comcast, and other providers, but nothing has panned out. In one instance, Apple wanted full on-demand seasons of hit shows and a recording feature that would include ad-skipping in newly aired shows, something cable executives were surprised by.

Apple sought payments of $10 a month per subscriber from the cable providers and refused to rule out seeking an even higher share of each monthly subscription in the future, according to people involved in the talks. It also wanted users to sign in with Apple IDs, even though Comcast and Time Warner Cable would handle billing and customer service.

Up until last year, Apple was still in talks for a streaming television service that would bundle several popular live channels and on-demand television at a price point of approximately $30 per month, but Apple reportedly put the project on hold after being unable to establish the necessary deals because content providers were reluctant to unbundle their channels. Cue, who leads most of the deals, is known for his "hard-nosed" negotiating style and refuses to settle for less than what Apple wants.

Instead, Apple has shifted towards positioning its Apple TV set top box and the tvOS App Store as a platform to allow networks to share their own original content. Apple is also following in the footsteps of Netflix and Amazon Video with original programming aimed at promoting services like Apple Music and the App Store.

Three shows are in the works: a dark semi-autobiographical drama starring Dr. Dre called "Vital Signs," a reality series that follows App Store developers called "Planet of the Apps," and a music-based reality show that's a spinoff of "Carpool Karaoke."

Related Roundup: Apple TV
Buyer's Guide: Apple TV (Buy Now)

Top Rated Comments

Rogifan Avatar
83 months ago
I thought Eddy Cue had this reputation as a master negotiatior. Seems like that was a bunch of BS. Without Steve Jobs to close the deal Cue is worthless.
Score: 32 Votes (Like | Disagree)
bandalay Avatar
83 months ago
Cue is Apple's services boat anchor. Beats? iTunes? iBooks? TV?

All fiascos. Time to shake things up.
Score: 21 Votes (Like | Disagree)
jscooper22 Avatar
83 months ago
Negotiating is a different game without your Reality Distortion Field Generator, huh?
Score: 18 Votes (Like | Disagree)
Col4bin Avatar
83 months ago
Apparently Cook and Cue don't share the same "je ne sais quoi" as Steve Jobs. (But, we all knew that already.)
Score: 15 Votes (Like | Disagree)
Stella Avatar
83 months ago
Apple need to compromise, instead of having things their own way. They may have actually got a TV product out.

So.. Apple wanted unbundled content, only for themselves to bundle content back up again. The customer does not want bundled TV, they want to be able to pick and choose what they want.
Score: 13 Votes (Like | Disagree)
DTphonehome Avatar
83 months ago
Bottom line, cable execs care about the bottom line. They aren't going to risk slaying the golden goose by handing control to Apple. Doesn't matter if Apple can provide a better user experience. Until their profits are so diminished by piracy that it threatens their business model (which is still a fair ways off), cable companies are going to make token efforts toward user convenience.
Score: 11 Votes (Like | Disagree)

Popular Stories

maxresdefault

Can't Get an iPhone 14 Pro? Here's Why You Should Wait for the iPhone 15 Ultra

Monday December 5, 2022 11:44 am PST by
Due to production issues at Apple supplier factories in China, the iPhone 14 Pro and iPhone 14 Pro Max are backordered and basically out of stock at every store. If you were planning to gift or receive an iPhone 14 Pro model for the holidays and didn't already get one, you're basically out of luck because they're gone until late December. Subscribe to the MacRumors YouTube channel for more ...
Apple advanced security Advanced Data Protection screen Feature

FBI Calls End-to-End Encryption 'Deeply Concerning' as Privacy Groups Hail Apple's Advanced Data Protection as a Victory for Users

Thursday December 8, 2022 2:45 am PST by
Apple yesterday announced that end-to-end encryption is coming to even more sensitive types of iCloud data, including device backups, messages, photos, and more, meeting the longstanding demand of both users and privacy groups who have rallied for the company to take the significant step forward in user privacy. iCloud end-to-end encryption, or what Apple calls "Advanced Data Protection,"...
General iOS 16 Feature Yellow

iOS 16.2 for iPhone Launching This Month With These 8 New Features

Thursday December 1, 2022 8:44 am PST by
Apple plans to publicly release iOS 16.2 for the iPhone in mid-December, according to Bloomberg's Mark Gurman. The update remains in beta testing for now, with at least eight new features and changes already uncovered so far. iOS 16.2 introduces a number of new features, including Apple's new whiteboard app Freeform, two new Lock Screen widgets for Sleep and Medications, the ability to hide...
maxresdefault

Hands-On With Apple Music Sing in iOS 16.2

Wednesday December 7, 2022 12:24 pm PST by
With the iOS 16.2 release candidate that came out today, Apple added the new Apple Music Sing feature that was announced earlier this week. We thought we'd check out the new karaoke feature to see how it works. Subscribe to the MacRumors YouTube channel for more videos. Apple Music Sing is available on modern iPhones and iPads, as well as the newest Apple TV 4K. It's built in to the Apple...
Apple car wheel icon feature yellow

Apple to Charge Under $100,000 for Apple Car, Launch Planned for 2026

Tuesday December 6, 2022 2:31 pm PST by
Apple is aiming to launch an Apple-branded consumer-oriented vehicle by 2026, and its goal is to hit a price point under $100,000 to make the car appeal to a wider range of customers, reports Bloomberg. Apple initially planned to design a car that might look similar to Canoo's Lifestyle Vehicle, where passengers could face one another in a limousine-style car with no steering wheel or...
General iOS 16 Feature Yellow

iOS 16.2 for iPhone Expected to Launch Next Week With These 12 New Features

Thursday December 8, 2022 7:05 am PST by
iOS 16.2 is expected to be released next week following nearly two months of beta testing. With last-minute additions like Apple Music Sing and Advanced Data Protection, the software update now has over a dozen new features for the iPhone. Below, we've recapped many of the new features coming with iOS 16.2, including Apple's new whiteboard app Freeform, two new Lock Screen widgets, the...
introducing apple music sing

Apple Music Adding a Karaoke Experience With Apple Music Sing

Tuesday December 6, 2022 7:09 am PST by
Apple today announced Apple Music Sing, a new feature in Apple Music that lets users sing their favorite songs with adjustable vocals and more. Apple Music Sing will utilize Apple Music's real-time lyrics to allow users to sing to their favorite songs using adjustable vocals, background vocals, and duet view to allow more than one singer.Apple Music Sing includes: Adjustable vocals: Users...
Twitter Feature

Twitter to Charge $11 Per Month for Twitter Blue on iPhone, $7 on Website

Wednesday December 7, 2022 6:47 pm PST by
Twitter plans to charge $11 per month for a Twitter Blue subscription on the iPhone in order to account for the 30 percent cut that Apple takes from in-app purchases, reports The Information. On the web, Twitter Blue will be priced at $7 per month. Prior to when Twitter Blue was paused, Twitter was charging $7.99 for a subscription, but the pricing will change before it relaunches. According ...
Apple advanced security Advanced Data Protection screen Feature

Apple Announces End-to-End Encryption Option for iCloud Photos, Notes, Backups, and More

Wednesday December 7, 2022 10:00 am PST by
Apple today announced it is expanding end-to-end encryption to many additional iCloud data categories on an opt-in basis for enhanced security. iCloud already protects 14 data categories using end-to-end encryption by default, including the Messages app when backups are disabled, passwords stored in iCloud Keychain, Health data, Apple Maps search history, Apple Card transactions, and more,...