Apple Frustrated by Inability to Reach Deals With TV Programmers for Television Service

[jozero]

Apple should make Canada its test bed !

Starting March 2016 Cable provider have to offer a standard cable bundle for $25, and then offer channels piece meal as the user wants. It has been mandated by the CRTC (our version of the FCC).

Now our cable companies are as bad and consumer unfriendly as the states, so I'm sure they will manage to screw the customer regardless. However an opportunity is opening up in Canada. Channels will have to offer themselves piece meal.

 

[Michael Scrip]

I'm a "cord-never." I've never subscribed to cable and I never will, whether it's literally cable or whether it's fed through an internet pipe.

I'm never paying $40/month for a bunch of channels I don't want.

Think of it like paying for a buffet. There are a lot of food items on there... but no one is expected to like every single item. I don't get to pay less if I don't like brussels sprouts, for instance.

There isn't yet a live cable TV service where you get to choose your own channels. I'm not sure how that would even work. The cable company would still have all the infrastructure to receive and deliver 500 channels... but people only want to pay for 4 or 5 channels? Don't expect your monthly bill to magically shrink though. That is a hopeless dream.

The closest you can get is choosing different packages that offer different amounts of channels... but even a smaller package might have channels that you won't want.

I can't imagine any adult male would ever watch Lifetime... yet it's included in every cable subscription.

Even Sling TV has Lifetime

So there ya go. As good as services like Sling TV are at disrupting the cable companies... you'd still be paying for channels you don't want.

I'm not sure there is a solution for that.

 

[sentential]

As someone who works in the industry the only way Apple is going to get the content provider's blessing to launch an OTT like they want to is if they acquire someone like a Time Warner. The contracts for things like this are completely ridiculous; by the time government regulations kick in its completely dead in the water. What Apple is facing is exactly why FIOS expansion has all but halted and why AT&T bought DirecTV, its just too difficult to go it alone anymore.

 

[Menel]

But still no Live sports...

And good riddance!

 

[joueboy]

Apple should start producing shows like Netflix and Amazon does. Then encourage independent producers to bring their shows to iTunes. There is no way they are going to win against cable companies at this moment. Once they established and provide streaming services make the AppleTV subsidized or free with a 2 year commitment. The new ATV is an expensive device to begin with and nobody is willing to sacrifice for a limited program. But once they have streaming service people might ditch Netflix.

 

[Michaelgtrusa]

After seeing the power Apple amassed with the rise of iTunes the Movie buis dosen't want to make the same mistake.

 

[ToroidalZeus]

How long until they try original content? It's working wonderfully for Netflix and Amazon.

. I see it more of a "change" and contractual issue. The networks don't want ala carte because it's going to kill their crap channels... which still make Ad Revenue because if it's out there, some people will watch it and they will be able to sell ads for it. As for contractual issues, I'm thinking there's contracts with Cable giants, and there's contracts between networks and production companies that all come into play.

So I think it's just a matter of complexity and resistance from the industry to change that's fueling most of this. Hopefully we'll see some movement soon. I know I'd like to dump my cable company.

That's exactly the problem. Having an online streaming service as good as cable will completely change the industry. Content providers will suddenly be in direct competition with Neflix, Amazon, YouTube. CNN and FoxNews will be competing against your favorite internet blogger. No one knows who the winners or losers will be. It's unknown.

 

[agsystems]

Here's my guess at the problem...

Apple wants $39.95 pricing

Apple wants 30% right off the top.

$39.95 times 70% = $27.96 to be divided among the 30-40 channels Apples wants in their package.

Meanwhile you have CBS pricing all-access at $6/month. Other channels are going to want something comparable to a "free" channel. $27.96/6 = about 4.66 channels getting what they want/need.

And if CBS is "too greedy" $27.96/$4 = only about 7 channels.

$27.96/35 channels = about 80 cents (that's CENTS) per channel.

I completely get why we want all television to cost nothing (or next to it). I get why Apple wants all of the television it wants to serve up to cost about 80 cents per channel while taking the lions share of the revenues in the package... far more than ANY of the channels). But why do the channel owners want to give it all away so cheap? And if you know the costs of television production, HOW could they give it all away so cheap even if they wanted to further enrich Apple?

And even if we can answer those with something other than the "well I'll just pirate it then" (which would be the "better deal" all the way down to 1 cent per channel) or "but Netflix..." (which is really NOT the same), why don't the broadband providers who are also the cableTV providers that would be so hurt by Apple taking all this revenue from them make up for their losses with higher broadband fees "for high bandwidth users like video streamers" and/or tighten those caps and tier the broadband pricing?

I like your analysis but why would Apple deserve 30% on this? Unless they are taking over the huge bandwidth costs I don't see it - there was another article claiming that they want the content providers to take the hit serving this data.

 

[HobeSoundDarryl]

I don't understand. If Dish Network can provide a basic service with basic channels for only $50/month, why can't Apple? If my local cable provider can do the same for $35/mo with basic channels, why can't Apple? What is Apple doing differently than companies like Cox and Dish that is making this so difficult?

Dish has a cable broadband bypass into our homes. And that $50 month all-inclusive package with DVR is quite a bargain BTW. I actually anticipate that as a showdown vs. this Apple package: 190 channels with a HD DVR for $50/month vs. Apples 30-40 channels (and you know they're going to leave at least 1 or 2 important to you out of their choices) for $30-$40 per month. OR, "for $10 or $20 more dollars, I can get another 150 channels" (the value reverse of the "I don't want to pay for 200 channels I never watch" argument).

Cable doesn't have to pay Cable to use the pipe, nor is Cable pinched by Cable for using the pipe.

An Apple subscription service is entirely dependent on the very same pipe owned by the competitors from which they would take all this TV business. Furthermore Apples wants their 30% right off the top AND a low price which means that the providers of content have to take a big hit to further enrich Apple. And the video side of media doesn't want to end up like their music-side cousins.

Somewhere on this site there is quote from Les Moonves about this topic from 2 or 3 years ago in which he says something along these lines: "the problem with Apple's subscription service is that they want everything." If you do some some searches you can find links showing what Apple is trying to do:

• take the 30% right off the top, pinching the partners providing the content Apple wants to sell
• take a slice of the channels commercial revenues, pinching the partners providing the content Apple wants to sell
• trade consumer data for better deals (ala Google, FaceBook).

Do searches and you find all 3 of those in play.

Easy solution: let capitalism work. Launch the service and let each channel charge whatever it wants for it's channel. If they are "too greedy" they don't make money. Then we consumers can vote with our wallets. Everyone would want to be in on that offering and we can strike the actual balance of al-a-carte between sellers & buyers. If Apple insists on it's 30% right off the top, each channel just adds that onto their pricing.

Will it ever happen? Of course not. We already have great cuts at al-a-carte in the iTunes store. The problem with that? The masses don't want to pay those prices for the individual shows enough to bring that al-a-carte "future" to replace the "as is." Instead, we delude ourselves into

• thinking there is some (legal) way to get something towards Netflix pricing for all of the first-run productions from all of the networks AND
• give Apple their 30% AND
• have the broadband providers not make up for their losses in higher broadband-only rates or tiers AND...

 

[ProjectManager101]

Apple will never succeed. I used to work in network television and everything is basically a mafia. The iPhone is a "channel", iTunes is a "channel", Apple TV is not a channel, is a very weak option, you can push it so far but you can not believe in bringing the companies you want to work with you, first of all... they do not need that, why I should? I make billions on my own.

 

[Nunyabinez]

Think of it like paying for a buffet. There are a lot of food items on there... but no one is expected to like every single item. I don't get to pay less if I don't like brussels sprouts, for instance.

But a buffet is a poor choice if you only eat small amounts of food. If I only want a sandwich and my only choice is to go to a buffet and overspend, yeah, I'm gonna be pissed.

 

[TheRealTVGuy]

Content creators are also probably worried. Allowing TV channels to be streamed freely puts them in direct competition with YouTube and other online websites. 24 Hour news channel like Fox or CNN would become about as relevant as online newspapers.

Perhaps, but I think many of us here are talking about the ability to purchase channels as Apps on our new Apple TVs, not necessarily looking for a free solution.

 

[ToroidalZeus]

Dish has a cable broadband bypass into our homes. And that $50 month all-inclusive package with DVR is quite a bargain BTW. I actually anticipate that as a showdown vs. this Apple package: 190 channels with a HD DVR for $50/month vs. Apples 30-40 channels (and you know they're going to leave at least 1 or 2 important to you out of their choices) for $30-$40 per month. OR, "for $10 or $20 more dollars, I can get another 150 channels" (the value reverse of the "I don't want to pay for 200 channels I never watch" argument).

Cable doesn't have to pay Cable to use the pipe, nor is Cable pinched by Cable for using the pipe.

An Apple subscription service is entirely dependent on the very same pipe owned by the competitors from which they would take all this TV business. Furthermore Apples wants their 30% right off the top AND a low price which means that the providers of content have to take a big hit to further enrich Apple. And the video side of media doesn't want to end up like their music-side cousins.

Somewhere on this site there is quote from Les Moonves about this topic from 2 or 3 years ago in which he says something along these lines: "the problem with Apple's subscription service is that they want everything." If you do some some searches you can find links showing what Apple is trying to do:

• take the 30% right off the top, pinching the partners providing the content Apple wants to sell
• take a slice of the channels commercial revenues, pinching the partners providing the content Apple wants to sell
• trade consumer data for better deals (ala Google, FaceBook).

Do searches and you find all 3 of those in play.

Easy solution: let capitalism work. Launch the service and let each channel charge whatever it wants for it's channel. If they are "too greedy" they don't make money. Then we consumers can vote with our wallets. Everyone would want to be in on that offering and we can strike the actual balance of al-a-carte between sellers & buyers. If Apple insists on it's 30% right off the top, each channel just adds that onto their pricing.

Will it ever happen? Of course not. We already have great cuts at al-a-carte in the iTunes store. The problem with that? The masses don't want to pay those prices for the individual shows enough to bring that al-a-carte "future" to replace the "as is." Instead, we delude ourselves into

• thinking there is some (legal) way to get something towards Netflix pricing for all of the first-run productions from all of the networks AND
• give Apple their 30% AND
• have the broadband providers not make up for their losses in higher broadband-only rates or tiers AND...

There are some problems with your logic.

1st cable bandwidth can be reallocated to internet bandwidth.
2nd cable subscriptions are going down each year and net growth is finally negative. Eventually things will change.. http://www.businessinsider.com/cable-tv-subscribers-plunging-2015-8

 

[TheRealTVGuy]

And good riddance!

Honey?! Is that you? I promise I'll take out the trash as soon as this hour of SportsCenter is over.

Why didn't you tell me you joined the forum?

 

[Loge]

Don't understand the issue with people getting channels they don't want. Simple, don't watch those channels. People seem happy to subscribe to music services like Spotify even though it's almost certainly carrying a lot of music they don't like.

 

[MacBergin]

Here's an idea...stop watching so much TV. I'm cancelling my Directv subscription and I'm just buying the season subscriptions to the shows i like through iTunes. Example: The Walking Dead subscription is $43 for the entire season. available the next day with zero commercials and you own it. If you watch more than 12 shows then you need to cut back on your TV watching. The only thing I will miss is NFL, but I will find other ways for that, a friend, a local bar. Hoping it will send a message until the NFL comes to its senses. Its close since the Thursday games will be streaming somewhere. If you want change you need to speak with your wallet and just cut the cable/satellite. Of course that's asking a lot of addicted people.

 

[mr.bee]

Sure everyone here seems to think they know what the customer wants.

But reality is, even when cable subs are going down its still a profitable business. And as long as it stays that way they will put their foot down.

If apple can persuade content creators, that's a different story. And it's unclear why they can't (or don't wanna) do that. As long as they don't offer content, they aren't in direct competition. So maybe the prefer being a platform?
And what kind of content do they want to offer? They want to seek the Netflix crowd? I'm not sure Apple likes them, I tried Netflix but didn't like it...

 

[HobeSoundDarryl]

There are some problems with your logic.
1st cable bandwidth can be reallocated to internet bandwidth.

Of course it can. But if you are the owner of cable bandwidth, why do you do that to enrich another corporation? You are actually obligated to maximize profits for your shareholders. So you can't just nicely hand over the revenues to another company because you CAN reallocate your cable bandwidth usage for Apple to use it as broadband channel. Instead, you likely jack up the cost of broadband per "heavier bandwidth users like video streamers" and/or pinch the tiers but keep your cableTV bundle NOT counting against broadband usage.

2nd cable subscriptions are going down each year and net growth is finally negative. Eventually things will change.. http://www.businessinsider.com/cable-tv-subscribers-plunging-2015-8

Let me know when "eventually" gets here. And paired with the first point, even it gets here this Tuesday, the net result for us consumers is apparently:

• Smaller bundle of channels chosen for us by Apple
• Cheaper cable bill for that bundle of channels
• Higher broadband bill

NET result: more expense for less video viewing access. I suspect it won't be too long after "eventually" when we're longing for the good old days when we could spend only a little more than "today" to get 200 channels instead of 35. But we'll both see "eventually".

 

[bushido]

Hulu got everything recent i watch so i am good

 

[mattopotamus]

Where is this cheap gigabit fiber offered by any company that doesn't also have a TV subscription business that would be hurt by Apple taking it from them? And if it's someone offering both, should Apple bring something to market like this rumor, won't they A) raise the price of broadband only deals and/or B) bundle up the same channels plus a few good ones Apple doesn't include in their bundle and match or slightly beat the price (and not count that television against the monthly broadband cap)?

I pay $70 a month for gigabit internet from uverse (internet only plan). That is pretty cheap by comparison.

 

[yaboyac29]

And that's why I will continue to stream (for free, "illegal" methods) sports and tv shows until the cable companies get their crap together.

my family is paying $120 for TV alone. What do we watch?

Sports, which are available on the same channels all the time and then the news. But in order to get those channels we need to buy these other channels and this and that and then it's $120.

**** them.

I would gladly give Apple a reasonable dollar per month to have access to every single sports game. And then I would pay X amount for each tv show I want to watch.

 

[topmounter]

Content is king and the television industry learned from what happened to the music industry.

 

[HobeSoundDarryl]

Don't understand the issue with people getting channels they don't want. Simple, don't watch those channels. People seem happy to subscribe to music services like Spotify even though it's almost certainly carrying a lot of music they don't like.

"We" imagine the total cost is assigned to the channels that we never watch: 200 channels divided by $100/month = 50 cents per channel. I only watch 10 channels, so my bill should be $5."

What "we" don't do is think about how much revenue the commercials running on those 190 channels "I" never watch throws into the production pot for us. We just want to kill that golden goose but expect what we do want to keep on coming anyway, Apple to deliver it and get their 30% right off the top, maybe even commercial-free. Oh, and we expect broadband to stay about where it is, thus Cable will just roll over and let Apple have it... OR we expect the GOV to step in and prevent Cable from making up for any losses on higher broadband. It will all "just work" because "Netflix pricing..." says so.

Best overall value and best way to get what many of "us" want is to let the golden goose do it's thing but go into the UI and use the FAVS channel feature to show only the channels we would want in our al-a-carte dream. If that's 10 or 20 channels, use the FAVS feature in your on-screen guide to show only those 10 or 20 channels. Then, the other 180 or so channels (now hidden from burdening "us") can keep generating their commercial-driven revenues (which is OPM paying the Studios to make the stuff we DO want to watch) AND we can get all that at a relative bargain without it counting against our broadband caps. And should there be a time where there is absolutely nothing on our favorite 10 or 20 channels, we can easily flip to the "ALL" channels feature to browse the other 180 or so and see if we can find anything on them.

 

[Fenez]

A bundle is a bundle...you will still be bundled with apple...they will basically be the new cable company....in all honesty why should any company just hand over control of their industry to someone else? Would Apple complain if another company decided it wanted some of their profits? Any company has an obligation to make as much money as possible for its stock holders, why should they give up their strangle hold?

 

[Michael Scrip]

But a buffet is a poor choice if you only eat small amounts of food. If I only want a sandwich and my only choice is to go to a buffet and overspend, yeah, I'm gonna be pissed.

Oh I agree.

But that's how cable companies operate. You pay a flat fee and get a bunch of channels (even if you don't want them)

People wish they could pay for just they channels they want. I don't see that happening though.

If you get 200 channels for $100 a month... don't think you can choose 10 channels and only pay $5 a month.

And even then... those would still be live TV channels that broadcast 24/7 on a fixed schedule. That's an outdated model.

Don't people really want on-demand content? Pay a subscription and watch anything they want whenever they want?