Apple’s Eddy Cue alienated cable providers and networks with an assertive negotiating style – report

“Apple Inc. executives had every reason for optimism when they approached Walt Disney Co. in early 2015 to join the streaming television service Apple planned to launch. Disney Chief Executive Robert Iger is an Apple director and had said he was keen to strike a deal,” Shalini Ramachandran and Daisuke Wakabayashi report for The Wall Street Journal. “Disney, which owns channels such as ESPN and ABC, was stunned, though, when Apple executive Eddy Cue made demands that would have upended decades of cable-industry and Hollywood practices, people familiar with the discussions say.”

“In the early 2000s, Apple co-founder Steve Jobs muscled music labels into selling songs online for 99 cents apiece instead of CDs for $15. Apple gained huge influence in the music industry, which saw sales fall but found a way to battle the existential threat from digital piracy,” Ramachandran and Wakabayashi report. “When the iPhone made its debut in 2007, Apple bucked tradition by excluding carrier-specific software features. Eager to carry the iPhone, wireless carriers agreed, which made Apple’s phones easier to use.”

“Apple’s point man for TV is Mr. Cue, 51 years old, the company’s senior vice president of internet software and services. He grew close to Mr. Jobs after starting as an intern in 1989,” Ramachandran and Wakabayashi report. “Mr. Cue is also known for a hard-nosed negotiating style. One cable-industry executive sums up Mr. Cue’s strategy as saying: ‘We’re Apple.'”

“In 2013, Mr. Cue met with Mr. Britt, Time Warner Inc. CEO Jeff Bewkes and other executives in Mr. Britt’s office overlooking Manhattan’s Central Park. Time Warner owns HBO, TNT, CNN and other channels. Apple’s Mr. Cue arrived 10 minutes late and was wearing jeans, tennis shoes with no socks, and a Hawaiian shirt, says a person familiar with the meeting,” Ramachandran and Wakabayashi report. “The talks dragged on… TV-channel owners “kept looking at the Apple guys like: ‘Do you have any idea how this industry works?’ ” one former Time Warner Cable executive says… By late 2014, the discussions had gone cold.”

Much more in the full article here.

MacDailyNews Take: As we wrote last December: “It’s 2015. This should’ve happened already. At this rate, America will back on the moon before Eddy Cue gets the contracts inked. So, before we’re dead, m’kay?”

Forgive us if we decline to hold our collective breath. It’s quite possible that without Steve Jobs’ help, Eddy Cue couldn’t get ink in a stationery store. Just kidding (sort of)! But, boy this is taking eons to accomplish, isn’t it? — MacDailyNews, November 5, 2015

Apple’s Internet TV service will have to have 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. That said, having already missed the launch of the new Apple TV, Apple might as well wait until they have a full dance card.

What else would you consider to be must-haves?

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

1. ESPN
2. Fox News Channel
2. USA
3. TBS
4. Disney
5. Discovery Channel
6. History Channel
7. TNT
8. HGTV
9. Nickelodeon
10. AMC
11. Adult Swim
12. FX
13. Cartoon Network
14. Food Channel
15. Lifetime
16. ABC Family
17. Syfy
18. TLC
19. Hallmark
20. Investigation Discovery

Source: Nielsen estimates, Live plus-3 for Dec. 29, 2014 – Dec. 16, 2015 (M-Su 8-11 p.m.)

33 Comments

  1. If Apple cannot negotiate deals in USA territory, maybe Apple should attempt its goals in foreign territories first. If successful, this would prove to be an exemplar to USA cable companies.

    1. Way to go Eddy. Apple should buy stock in those companies, then fire their CEOs. They make too much money anyway, which steals from the growth aspect of those companies.

      Like that Eddy Cue. Eddy Cue for president of Apple.

  2. Step 1: Announcing the Challenge (“Services is going to be the size of a Fortune 100”)

    Step 2: Disqualifying certain candidates to lead this business

    Step 3: hire Marissa

  3. Fire Eddy Cue.

    He is like a caricature of what he thinks an Apple employee should be.

    He’s got the Apple brass snowed, but he can’t seem to snow anybody else.

  4. It is actually impossible to know if this is a good or bad deal without knowing what the cable companies pay for a similar package. It may be high, average or low. Maybe Apple is low-balling them saying they will bring in millions of subscribers, or maybe it is average and the content people are trying to shake down Apple for even more money. There is not enough information to tell.

    1. It’s called “continuous residual income”.

      The cable giants are never going to get rid of the box unless they have the same amount of money coming in without having to maintain and service their equipment. Notice that you don’t own the equipment? Plans vary but the boxes still cost you money.
      The cable companies will give full access to their content the minute they see an advantage of not having their own boxes. I believe Apple and others want to provide the box and much better delivery systems but unless consumers pay for a “subscription” type inclusion, it will never happen. Even then you have to get the internet providers to agree to let the data through so you have two issues.

      No way is it as simple as the article makes it sound.

  5. Given Eddy’s last few poor performances at WWDC and product rollouts, the company should take a hard look at his commitment to work. He seems like a likable enough guy but he may think he is just too cute to have to really apply himself. He comes across a little bit like a lazy goof-off.

    He has to be able to produce. This latest news about failed negotiations along with some poor performances in the past should force COOK to rethink Eddy’s role in the company. There must be someone capable of getting contracts with content providers. Maybe instead of $30 bucks they go to $35? Or $40?

    Then again, maybe it’s a vision thing and the company doesn’t know exactly what it wants to do? It appears APPLE has been floundering in the TV market for a year or two. Maybe it’s Eddy’s fault and then again, maybe it’s others at APPLE. I don’t know. But I’d say Eddy might have to go, especially after this latest news.

  6. Oh BS – Anyone would have alienated the cable providers. They are all a bunch of Highway Robbers and unless they get to have all of the cake, they won’t play – give Eddie a break – he was dealing with complete and unreasonable A-Holes.

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