Apple streaming TV service negotiations remain divided over $40-per-month pricing - report

Posted:
in iPod + iTunes + AppleTV edited August 2015
Though new Apple TV hardware is expected to appear at an upcoming Sept. 9 event, Apple's long-awaited subscription television service is reaffirmed to remain on hold, thanks to ongoing negotiations with content owners.




Echoing earlier reports, Jessica Lessin of The Information said in a letter to subscribers on Friday that she has been told by sources that the "economics" of a subscription TV service remain the main sticking point between Apple and its potential partners. Specifically, the price Apple wants to charge consumers is said to be too low for content makers, preventing the service from debuting next month.

"There's still a big gap between the price media companies want for their TV channels and the roughly $40 a month Apple wants to charge consumers," Lessin wrote. "Something has to give."

Lessin's sources said that in the absence of a subscription service, Apple will focus on integration with HomeKit accessories, allowing the Apple TV to be a hub for controlling connected devices in the home.

She was also told that Apple plans to spotlight security, highlighting the fact that data will be stored on the Apple TV itself and not in the cloud.

Apple's interest in $40-and-under pricing has been publicized since March. Back then, it was said Apple hoped it could work out a deal to launch the new service, and a new set-top box, by June, in time for its annual Worldwide Developers Conference.

But neither the service nor new hardware were unveiled at WWDC, and the new Apple TV unveiling is now said to be a part of Apple's Sept. 9 event. The device is said to include support for Siri voice control, a new remote with touchpad, and a dedicated App Store for third-party downloads.

Despite the hardware's apparent imminent launch, multiple reports have said the subscription service has been internally delayed to sometime in 2016, due to sputtering talks with major networks like CBS, Fox, and NBC.

But in addition to alleged licensing hurdles, Apple has also been said to lack a network infrastructure capable of feeding what is expected to be a large number of Apple TV boxes. Apple supposedly needs to populate servers around the U.S. with content to ensure a smooth streaming experience, but so far only fields data centers in California, Nevada, North Carolina and Oregon. The company has been building out a proprietary network, but currently leans heavily on Akamai to handle its content distribution grunt work.
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Comments

  • Reply 1 of 102

    I wouldn't pay even $40 for such a service.  They'd have to go $30 or less before even piquing my interest when I can just a la carte whatever I want for much cheaper.

  • Reply 2 of 102
    maestro64maestro64 Posts: 4,313member
    I personally think that Apple has locked in a few content providers just to show they can do it then others will follow just like they did with shows on iTunes. I'm betting Disney is locked in.
  • Reply 3 of 102
    eideardeideard Posts: 354member

    These creeps are NOT content "makers" - they are content "owners.  I'm certain we all understand the difference.

  • Reply 4 of 102
    gatorguygatorguy Posts: 19,322member
    eideard wrote: »
    These creeps are NOT content "makers" - they are content "owners.  I'm certain we all understand the difference.
    Someone created it and was presumably paid for their expertise /talent, someone paid for the infrasrtucture needed to deliver it to your home, and whoever is viewing it there thinks it's worthwhile to spend time with.... But not worthwhile enough to pay much of anything for? I guarantee Apple will make money on it. and they're simply the end-provider rather than the creative. Surely most here don't think Apple should act like the record labels do: We'll make ours, you're on your own. You need us more than we need you.
  • Reply 5 of 102
    Rather than destroying cable, the biggest story is the threat to the gaming console market, and game sales...
  • Reply 6 of 102
    ...later, cable.
  • Reply 7 of 102
    Hardly surprising...whatever Apple is proposing that will result in less revenue will go nowhere. Increasing the price further into the $70-90 range would be bumping into existing basic packages already - so I don't know what savings anyone can expect from this service.
  • Reply 8 of 102
    ...can you say NetFlix...?
  • Reply 9 of 102
    kpluckkpluck Posts: 500member

    I am curious, how would it be possible that Apple lacks the infrastructure for such a service when the article suggests they would have come out with it in June or at the fall event if they had reached a deal with the content holders?

     

    If those rumors were true, it would seem to clearly indicate that Apple feels it does have the infrastructure needed to provide the service.

     

    -kpluck

  • Reply 10 of 102
    rogifanrogifan Posts: 10,669member
    What's the point of skinny bundles? Unless I can pick the exact channels I would want in a bundle it's pointless to me. I'll keep my directv. I'm able to watch more and more channels outside my house with its app. Pretty much most channels except the major networks and I couldn't care less about those anyway.
  • Reply 11 of 102
    apple ][apple ][ Posts: 8,360member

    I think that the new Apple TV is going to be the biggest thing to get excited over when Apple has their next event soon. The iPhone is not going to be a huge surprise. It'll be better and faster than the current iPhone, and it'll have Force Touch.

     

    There are many more unknowns regarding the Apple TV. What's it going to look like? Is it going to have an app store? Will SIRI be built in to it? Will it be a gaming console also?

  • Reply 12 of 102
    rogifanrogifan Posts: 10,669member
    kpluck wrote: »
    I am curious, how would it be possible that Apple lacks the infrastructure for such a service when the article suggests they would have come out with it in June or at the fall event if they had reached a deal with the content holders?

    If those rumors were true, it would seem to clearly indicate that Apple feels it does have the infrastructure needed to provide the service.

    -kpluck

    Well according to the most recent rumors ?TV wasn't shown off at WWDC because the software wasn't ready. TechCrunch posted an article today saying that the lady was so Apple could polish the interface. They claim the interface is going to be amazing.

    http://techcrunch.com/2015/08/27/apple-is-about-to-lay-down-its-tv-cards/#.f7tkyg:LLqh
    If Apple did indeed ‘delay’ the Apple TV from being released at WWDC, then it probably had a reason. And, if my sources are correct, that reason could well be polish, polish, polish. The experience of using it is said to blow away the types of junky smart TV interfaces we’ve had to deal with so far. This is the first real Apple TV product.

    Considering the issues Apple has had with Apple Music and many complaints about the UI i'm glad Apple is taking the extra time to polish the ?TV interface.
  • Reply 13 of 102
    mytdavemytdave Posts: 432member

    I have no interest in a bundle.  Both Apple and the Networks are out-to-lunch.  I've already cut the cord.  Hello Networks, I'm already NOT viewing your content, partially because your content stinks, and partially because the Cable TV bundle model is insanely overpriced ("150 channels of crap").

     

    I would be interested in an a-la-cart model, where each "channel" would cost somewhere between $2.99 to 4.99 per month.  I would choose the ones I want, which is good for me, and which means the Networks (channels) that I choose would experience the full revenue (minus Apple's cut) instead of pennies spread across the socialist model of channel bundling.

     

    This is the way it needs to be.  Best for consumers, and best for the Networks - if your Network is worth watching, you'll succeed, if your Network stinks it will soon cease to exist.

  • Reply 14 of 102
    irelandireland Posts: 17,462member

    Sweet baby Jesus let the new controller have Bluetooth.

  • Reply 15 of 102
    "Something has to give." That's right, I cancelled my cable service and use Hulu, Netflix and broadcast channels.

    Charging $100 a month for 300 channels I do not watch is not a sustainable business model.
  • Reply 16 of 102
    irelandireland Posts: 17,462member
    Quote:

    Originally Posted by Rogifan View Post



    What's the point of skinny bundles? Unless I can pick the exact channels I would want in a bundle it's pointless to me.

     

    How do you know that won't also be an option?

  • Reply 17 of 102
    eightzeroeightzero Posts: 2,195member

    Really hoping this comes together. I decided to get SlingTV for $20 essentially just for ESPN, even though I won't use it much until NFL season. Really looking forward to options.

  • Reply 18 of 102
    bobschlobbobschlob Posts: 1,074member

    I don't understand how "CBS, Fox, and NBC" could be an issue when these networks are already available free, OTA.

  • Reply 19 of 102
    freerangefreerange Posts: 1,584member
    kpluck wrote: »
    I am curious, how would it be possible that Apple lacks the infrastructure for such a service when the article suggests they would have come out with it in June or at the fall event if they had reached a deal with the content holders?

    If those rumors were true, it would seem to clearly indicate that Apple feels it does have the infrastructure needed to provide the service.

    -kpluck

    The article is indeed wrong. Akamai provides Apple the necessary storage and delivery service on a distributed and localized level which is necessary for smooth streaming on a large scale. That in fact is what Akami does for many large providers around the world through their global system of data centers so there is no need for Apple to build out that part of the network.
  • Reply 20 of 102
    rogifanrogifan Posts: 10,669member
    ireland wrote: »
    How do you know that won't also be an option?

    Because none of the rumors have mentioned it and nobody else is currently offering it?
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