TV bundles challenge Apple to make a deal

“For all the changes to Apple TV, one thing still missing was a hoped-for bundle of television programs. So what happened?” Katie Benner reports for The New York Times. “Blame a combination of complexity and cost that doesn’t work in Apple’s favor. ‘Television broadcast and digital rights are incredibly complicated, especially when you get into international rights,’ said Dan Cryan, senior director, media and content at IHS, a research firm. ‘This is tougher than film. It’s an absolute snarl of contracts and agreements.'”

“‘Apple TV needs TV shows to succeed, especially live sports,’ said James L. McQuivey, an analyst at Forrester Research. ‘Otherwise it doesn’t stand out from other products that let us stream Netflix and Hulu,'” Benner reports. “In the United States, Apple might have to negotiate with a network like CBS for content, but it would also have to negotiate with local affiliates for rights to some shows. People with knowledge of Apple’s television negotiations say that local affiliates pushed back against some content deals.”

“‘Ten years ago there were no templates for doing digital deals and figuring out complexities like streaming rights and union negotiations,’ said Brian Wieser, an analyst at Pivotal Research Group. ‘But now those templates exist and a company can get the rights to content if it’s willing to pay a huge amount of money,'” Benner reports. “The price tag that Apple would have to pay at this point would be high, because the TV world that Apple is dealing with now is stronger than the music industry was when Apple needed songs for iTunes and the iPod…To create a broad base of users around Apple TV… the holy grail is still more traditional programming like sports and hit television shows.”

Read more in the full article here.

MacDailyNews Take: Apple’s Internet TV service will certainly have to offer ESPN. It will also likely require the “Big Four” networks (ABC, CBS, Fox, NBC) – although it could launch with three out of four and eventually hammer out a deal with whichever one is being the most reticent.

Beyond the Big Four, if you go by ratings (total viewers), the top 20 cable networks are:

1. ESPN
2. USA
3. TNT
4. Disney
5. TBS
6. History
7. Fox News
8. FX
9. Discovery
10. AMC
11. HGTV
12. Adult Swim
13. Nick at Nite
14. A&E
15. ABC Family
16. Lifetime
17. Syfy
18. Food
19. TLC
20. Bravo

Source: Nielsen estimates, full year 2014

Of course, Apple TV will also need to continue providing access to Netflix, Hulu, etc. and likely start to offer Amazon Prime, etc. for subscribers of those services.

13 Comments

  1. Apple does not need to support Amazon , Netflix or any other. They can outright compete.

    Netflix is a joke. How many films are available for streaming? Apple can just as easily offer the same thing too. Same applies for Amazon.

    About creation of their own shows? What prevents Apple from doing the same?

    Apple TV is a game changer. WS will do their utmost to vilify it.

    1. Apple should NOT get into show creation. It creates an inherent conflict of interest, as demonstrated by Sony’s electronics division being damaged by things that their entertainment division did.

      Netflix *has* to get into content creation because their only other revenue stream is entirely dependent on the studios who could yank their streaming rights any day. Apple does not have this revenue restriction.

      1. Well, Netflix has been on the existing Apple TV for quite some time (I don’t know about Hulu; I don’t have the device). As has YouTube.

        The new device, with complete app development tools, will likely receive ports of all existing iOS apps for video streaming (HBO Go, Showtime Anytime, USA Now, Encore Play, Netflix, Hulu Plus, etc). I have no doubt that all the ones you need will be there from day one.

  2. The better thing is for US providers to combine and cut out the frankly mind numbingly bad programming that the U.S. turns out for its citizens. BTW we have to put up with a lot of this crap in the UK where at least we’ve got some decent programme makers working for BBC and ITV.

  3. Being able to search for shows regardless of source is fantastic. Having Siri doing the same to provide suggestions is also great.
    As with music, the main challenge is discovery for the user. I come across TV shows on Netflix that were aired 10 years ago that I never knew were on at the time.
    As for channels, the problem is that they do not want to risk their current income.
    The best option is to offer a la carte services with prices ranging from $1-5 per month. You can add or delete channels as you see fit and search like Siri can provide information on programming that you might have missed because you do not have that channel.

  4. I know what I want and I know Apple doesn’t offer it, but neither does Ruko, Amazon, Hulu, Google, HBO Now, Netflix, AT&T, Comcast, and TimeWarner. No single source provides the films and programming I want at a price I am willing to pay.

  5. I’ve yet to see anyone say what I thought was obvious:

    The rollout of apps for Apple TV will finally bring competition, but possibly not how anyone expected.

    Why wouldn’t TimeWarner, Comcast, DirecTV, etc port their iPhone app (I know TW has one, at least) to AppleTV, and then offer a monthly subscription on bundled channels EXACTLY as they do directly to subscribers?

    Now, TW, Comcast, Suddenlink, Cox, etc will actually have competition BETWEEN each other, rather than having an effective monopoly in their respective geographic areas.

    This is key because the existing cable companies…wait for it…ALREADY HAVE THE CONTRACTS FOR THE CONTENT. It’s also their first real chance to steal the others’ subscribers…which they’ll need to do since more people will be dropping them in favor of directly subscribing to channels a la carte via Apple TV.

    Don’t want to subscribe to a bundle? Fine, then just get a subscription to HBO, ESPN, or whatever other channels strike your fancy.

    It’s a win-win for consumers, for a change.

    Thanks, Apple!!

Add Your Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.