Eddy Cue, Apple's chief of Internet Software and Services, has suggested to one analyst that his company would be unlikely to build a full-fledged television set unless it could secure necessary deals for content.
Talking with Andy Hargreaves of Pacific Crest, Cue indicated that Apple could create a better television user interface, but that alone would be an "incomplete solution," according to Apple 2.0. Cue's remarks suggested to Hargreaves that Apple wouldn't want to deliver a television set until the company "could deliver content in a way that is different from the current multichannel pay TV model."
"Unfortunately fro Apple and for consumers, acquiring rights for traditional broadcast and cable network content outside of the current bundled model is virtually impossible because the content is owned by a relatively small group of companies that have little interest in alternative models for their most valuable content," Hargreaves wrote.
"The differences in regional broadcast content and the lack of scale internationally also create significant hurdles that do not seem possible to cross at this point," he added.
Hargreaves' reading of Cue's comments align with recent reports that claimed Apple was in talks with cable providers to potentially build a set-top box that would handle live TV programming. It was said that Apple has yet to reach a deal with any cable operators, potentially because of a reluctance on the part of content providers to allow Apple into the live TV space.
While Apple feels the necessary content agreements would be key for the company to make a bigger push into the living room, some industry watchers feel that Apple would also be the key partner big media companies need if they want to monetize the small screen. This week, analyst Ben A. Reitzes with Barclays Capital said major media companies may be forced to strike a deal with Apple in an effort to monetize content watching from consumers who are moving away from traditional cable TV subscriptions.
"Apple may hold the cards in being the only company that can fully monetize the small screens for big media companies," Reitzes wrote. "The risk of not partnering with Apple is that as young people may 'cut the cord' given the cost of cable that a screen connected to an Apple TV with AirPlay can provide a substantial array of content."