Apple's streaming TV talks fell apart on push for 'skinny' channel bundle priced under $30/month
Apple's vision for the future of television is a basic streaming bundle with just a handful of channels for a low price -- something content owners couldn't agree to, according to a new report.
Dishing inside information on the failed negotiations between Apple and content owners, Peter Kafka of Re/code reported on Wednesday that the main issue between the two sides was Apple's push for a "skinny" bundle of channels priced at less than $30 per month. According to Kafka, Apple was interested in a base package with about a dozen channels, but content owners didn't want their networks to be left out.
Apple's proposal would offer consumers a base package without those extra channels. Customers who would be interested in larger channel lineups would be able to opt in to tiered offerings.
According to media sources who spoke with Kafka, Apple content chief Eddy Cue has been heading the negotiations, and remains insistent on achieving a low entry-level price point. That appears to be the main sticking point between the two sides, and has apparently led Apple to walk away from the negotiating table.
Interestingly, Apple is said to have stopped negotiating months ago. News didn't leak, however, until this week, when CBS Chief Executive Les Moonves said Apple's "over-the-top" television service had been placed on hold.
Comments made by Moonves suggest that he agrees somewhat with Cue, as he said in an interview on Tuesday that he does not believe consumers will spend money on channels they don't want to watch. In his view, a streaming service would have a base price between $30 and $40, and will feature the four major U.S. broadcast networks and 10 biggest cable channels -- numbers essentially in line with what Cue is said to have been pushing.
For now, Apple is said to be focusing on building out the newly launched tvOS App Store as a platform on which media companies can sell directly to consumers. The new living room-focused App Store is exclusive the fourth-generation Apple TV set-top box.
This week's revelations make it highly unlikely that Apple will debut a streaming television service in 2016, as some rumors had claimed.
Dishing inside information on the failed negotiations between Apple and content owners, Peter Kafka of Re/code reported on Wednesday that the main issue between the two sides was Apple's push for a "skinny" bundle of channels priced at less than $30 per month. According to Kafka, Apple was interested in a base package with about a dozen channels, but content owners didn't want their networks to be left out.
Apple reportedly wants a "skinny" bundle of streaming channels for under $30 per month, but can't work out a deal with content owners.With existing cable packages, content owners bundle multiple channels -- ABC, for example, also owns its family of ESPN networks, as well as Disney Channel, ABC Family and others.
Apple's proposal would offer consumers a base package without those extra channels. Customers who would be interested in larger channel lineups would be able to opt in to tiered offerings.
According to media sources who spoke with Kafka, Apple content chief Eddy Cue has been heading the negotiations, and remains insistent on achieving a low entry-level price point. That appears to be the main sticking point between the two sides, and has apparently led Apple to walk away from the negotiating table.
Interestingly, Apple is said to have stopped negotiating months ago. News didn't leak, however, until this week, when CBS Chief Executive Les Moonves said Apple's "over-the-top" television service had been placed on hold.
Comments made by Moonves suggest that he agrees somewhat with Cue, as he said in an interview on Tuesday that he does not believe consumers will spend money on channels they don't want to watch. In his view, a streaming service would have a base price between $30 and $40, and will feature the four major U.S. broadcast networks and 10 biggest cable channels -- numbers essentially in line with what Cue is said to have been pushing.
For now, Apple is said to be focusing on building out the newly launched tvOS App Store as a platform on which media companies can sell directly to consumers. The new living room-focused App Store is exclusive the fourth-generation Apple TV set-top box.
This week's revelations make it highly unlikely that Apple will debut a streaming television service in 2016, as some rumors had claimed.
Comments
Even though the court -- that idiot judge and her lackey -- was completely unfair to him and Apple, I imagine that played some role in his ability and leeway to negotiate.
(Add: The negative market reaction today might be in response to this news).
All of this seems like not worth Apple's time. Offer a platform where content providers can create apps and let Apple provide the hardware, UI and search integration.
Content providers have a legit reason to not allow the cherry picking of channels. How are consumers to KNOW if they like a channel if it's not included?
Yes today's generation has an idea of what they want through decades of watching every channel in existence but all your favorite channels were "discovered" at one point. Imagine removing this and what can happen 10 years from now? If you thought the MTV generation was bad, in 10-20 years you'll have something way worse and a ton of good channels will close because there's no exposure to them.
I believe Apple needs to find a way to give ALL channels exposure in order to reach a deal. I'm thinking a free TV app that shows various content (for free)from different channels would work.
Imagine scrolling through tons of free limited-time content that is updated daily by providers. you click on an interesting real-life crime scene investigation show. At the end of the show it says "Watch more Deadly Women on ID". They can even show the first part of two part shows or cliffhangers to urge consumers to purchase the channel.
Yeah; they get paid less.
Maybe we don’t care?
This isn’t even a matter of supporting hegelian dialectic; I know what I want and I refuse to pay for something I don’t.
Until this transpires, the majors are getting bupkis from me. Nothing on TV is worth paying much for. I get my biggest kicks from doing, not watching. There's plenty of free stuff to waste time watching on the Internet anyway, and free Over The Air HD broadcasts cover the rest.
Newer entrants will find harder and harder to break into the bundle, and will either be acquired by the winners, or disappear.
I think that's what the future will look like in a lot of markets. A few huge players dominate, and there's less diversity, fewer choices.
In the Cathedral vs the bazaar argument, if Apple could build base bundles they will. The bundling ("Buy 10 get 5 free!") is a big deal. (looking at Amazon Prime Video and Netflix).
The question will be if the 'streaming content' market place will ever get consumer bulk discounts.
The problem is, part of the purchase is a 'sale' I buy your channel, and you sell my eyeballs (to advertisers). Old school people want both the up front revenue, and the 'we have 50 million households subscribed... you find a great show, and you'll get eyeballs!!"
As soon as the networks are disintermediated, the better.
Regardless, the technology is such that people can and should be able to pay to see just the sporting events they want. For instance, why pay a small fortune for MLB access to all ballgames (EXCEPT those of your home team, when playing both home and away!), when you're only interested in your home team?
A possible problem here is that the content owners have already entered into lucrative, multi-year contracts that lock them into antiquated sales and distribution methods while technology races ahead. People really need to vote with their wallets, to get these contracts mutually terminated by the parties involved and force the content owners to update their practices. Will it really hurt not to watch guys bludgeon themselves into dementia for a while?