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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 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.