Apple Shows Interest in Buying Time Warner Assets for Streaming TV Service

[H2SO4]

It is a good thing. The cable providers hold way too much power and the services currently being provided are too entrenched. This is on a whole other level than iTunes or iPhone coming in and changing the game. If Apple wants to shake up the cable industry and its services, this is a rare opportunity to do so.

And who says Eddy Cue would be 'running' Time Warner? Apple would be buying the employees along with the assets. Sure, there would be some management restructuring, and you'd weed out some undesireables (e.g. importing Apple's expectations), but it's not as if the seats would come empty.

You’re in their market. Just like when you’re in Apples market you have to play by their rules. You know - must give them a 30% cut, must not implement set features that Apple subsequently implement themselves, must pay over the odds for could storage………...
But it’s Ok when that happens?

 

[BuffaloTF]

Huh? I watch a ton of CBS, CW and NBC on Netflix. I also watch a ton of cable TV shows including Walking Dead, Breaking Bad, Doctor Who etc. Since when is Netflix only old crappy movies????

You're watching content from those channels about a year after the fact, at minimum. Long after they've actually aired on those channels for their first-run.

They'd actually own the channels... many of them... and first-run on that content. Netflix is trying to be HBO, a single property they would acquire should this go down. They have their own miniseries, and they're the home of Disney movies starting this month. So the equivalent is you're paying 10 dollars for 1 channel. Well, I can pay 15 for HBO and have better content. That still doesn't include the breadth of what I'd be getting with the rest of what Time Warner owns.

 

[Rocketman]

TWX Time Warner Inc $57B market cap
TWC Time Warner Cable $52B market cap

I guess we are discussing TWX.

No wonder AAPL needs so much cash on hand.

I would expect them to keep TW a separate operating unit.

 

[BuffaloTF]

I don't see how that would fly. Comcast owns a ton of media properties. Comcast cable subscribers don't get them for free.

It's not about the cost Comcast Cable pays internally for Comcast Media... it's about the negotiating power they have internally to leverage that content when making deals for other content. Used for good, it could stem the ever-increasing per-subscriber costs... used for profits, it'll be a game of one-upsmanship as contracts end -- ie, you charged me 5 dollars for your package of channels? I'm not selling mine to you for less than 6...

 

[RoyM2011]

Time Warner CEO Jeffrey Bewkes reportedly told investors on Monday that he would entertain a sale of the media company, and Apple has been named as a possible suitor, according to the New York Post. AT&T, which owns DirecTV, and Fox are also said to have shown interest.Time Warner owns a large number of assets that could lay the foundation for Apple's much-rumored streaming TV service, including CNN, HBO, TBS, TNT, NBA TV, Cartoon Network and its Warner Bros. division. A deal could allow Apple to offer a skinny bundle of channels airing popular TV shows for all ages like Adventure Time, Game of Thrones, Sesame Street, Silicon Valley and Veep.

Apple's streaming TV service has reportedly been placed on hold due to its difficulties in securing deals with content owners, but striking a deal with Time Warner would allow the company to reconsider offering a skinny bundle of channels through a Netflix-like service for Apple TV, Mac, iPad, iPhone and other devices.

Apple has previously been in talks with CBS, ABC, Fox, Disney, Viacom, Discovery and others about launching a web-based streaming service that would bundle approximately 25 channels for $30 to $40 per month, but content owners have been reluctant to give up control of the living room up to this point.

For now, fourth-generation Apple TV owners can stream select on-demand content from tvOS apps like ABC News, CNNgo, Fox NOW, HBO NOW, MLB.TV Premium, NBC Sports Live Extra, PBS, PBS Kids, USA NOW, Watch ABC and WatchESPN, but most require authenticating with a cable or satellite TV subscription.

Article Link: Apple Shows Interest in Buying Time Warner Assets for Streaming TV Service

The very last I can remember TWC and TW split in 2009 our ceo for TWC is Robert Marcus ,

 

[silentq15]

This is great news, but I still think $30/$40 is too much for a service like this, especially since Netflix is only $9.

I am not sure you understand the true price of Live TV Channels. The idea of $30 skinny bundle is a huge bargain. Most of these channels cost the provider somewhere around $6.00 or $7.00 per channel per customer. Also the idea of Live Cable TV being the same price as Netflix is just not realistic as the Live component is something Netflix just simply doesn't have and what makes the 30 dollar price more than fair here. If your still not convinced the price is a bargain just look at the average US Cable customers monthly bill.

 

[mistafro]

Skinny bundle nope. This is so simple, and it's already been done. Apple TV will become what Apple Music is now.

We will pay a fee and have access to all content on both services. TV should be the same and will be, the studio's are just trying to make sure they get their piece and once they realize they better have their content on Apple TV's subscription service they will like all the labels do on Apple Music.

It will happen and needs to happen but unfortunately these things take time and TV is more complicated than music as it involves, TV shows, movies, etc.

 

[konqerror]

No wonder AAPL needs so much cash on hand.

Apple wouldn't pay in cash, they'd trade TWX shares for AAPL.

 

[iReality85]

You’re in their market. Just like when you’re in Apples market you have to play by their rules. You know - must give them a 30% cut, must not implement set features that Apple subsequently implement themselves, must pay over the odds for could storage………...
But it’s Ok when that happens?

I don't think you quite understood the gist of my post. It's not that I'm "OK" with playing by this rule or that rule. That wasn't the topic I was discussing. Buying TW would be buying leverage, which Apple currently lacks when going up against the cable industry. They've tried approaching them with bundle and streaming ideas, and have been declined more or less with "No thanks, we like things the way they are." Basically, go pound sand. They're the ones that own the content and distribution methods.

Apple has a distribution method, they just need to actually own content. If Apple comes to own TW's media assets, Apple is then free to offer that content however it wants through it's own distribution service which would of course be Apple TV and iTunes. As has been discussed, we could actually see a-la-carte or select channel packages come to fruition. And once that happens, companies like Comcast, Fox, etc would be more accepting of changing the current cable model.

 

[nolankvn]

I wonder when people will realize Eddy Cue is bad for Apple.

 

[Fenez]

Why should anyone think that Apple should charge a ridiculous low amount for their TV. Service? Why does anyone think that cable companies would or should just open the door for someone to come in and ruin their profits? That's not how any business works. Any company with a strangle hold on anything owes it to their stock holders to continue to have a strangle hold on it. Anyone thinking that you will somehow get streaming TV. That competes with cable for 20 or 30 bucks a month is fooling themselves. If Apple or any company figures out how to wrangle the control of cable away from cable companies they will just become the new version of what you currently hate now. As a side note, if that happens you can basically expect to pay more....much more for your internet service.
[

 

[macnewbie91]

I'm hoping the cable and internet industry gets shaken up soon. Right now I'm paying Verizon $155-165 a month for their most basic internet package (25/25), and for their second highest package from the bottom.

The cable and internet providers are ridiculous. I shouldn't have to pay to rent the wireless router, the boxes, and then pay all of these taxes, and then STILL have to watch a ton of commercials when I watch TV. Also, how about internet that's actually 25 Mbps down? Whenever I download a movie on my Apple TV, it downloads 1 GB every 25 minutes it seems like.

It would be nice to pay $35-$40 a month for basic cable with my local new channels, ESPN, ESPN 2, and then provide movie channels and NFL network for an extra cost, while paying $20 a month for internet. No stupid fees, just sales tax.

 

[haydn!]

Netflix has absolutely nothing to do with what Time Warner offers. You can't get network TV on Netflix, no other cable TV channel's, etc. All you can get is old crappy movies which is why its only $9/month. Your argument is totally invalid.

In the UK, there is a lot more TV content than films on Netflix - quite a lot of American series are now made available this way in the UK, or at least it feels like that. But that said, I agree they're non-comparable services as you still have to wait 6-12 months for most series to make an appearance and 2-3 years for films (if you're lucky!).

 

[silentq15]

Why should anyone think that Apple should charge a ridiculous low amount for their TV. Service? Why does anyone think that cable companies would or should just open the door for someone to come in and ruin their profits? That's not how any business works. Any company with a strangle hold on anything owes it to their stock holders to continue to have a strangle hold on it. Anyone thinking that you will somehow get streaming TV. That competes with cable for 20 or 30 bucks a month is fooling themselves. If Apple or any company figures out how to wrangle the control of cable away from cable companies they will just become the new version of what you currently hate now. As a side note, if that happens you can basically expect to pay more....much more for your internet service.
[

The deeper I have done more research into this the more I have realized that it is really a combination of the carriers and the content providers themselves. A lot of the content providers have overvalued their content to the point where its simply not realistic for what it actually is or how popular it actually is. This fact and the lack of choice they give to the consumer whether it be the actual customer or the carrier by forcing the bundling of channels, is the biggest problem here in my opinion because it makes for a sort of circular problem here. While they can't get away with charging $6 a month for something like a Race Car channel they will go ahead and bundle that with say NBC which everyone needs so we end up paying a higher price. Once they realize they will probably end up with more customer's by offering a la cart channels the prices will finally be reasonable. I am hoping what Apple is doing here is basically dragging the TV Industry into understanding that this is what the customers want.

 

[JohnStrass]

"...A deal could allow Apple to offer a skinny bundle of channels airing popular TV shows..."
Or, maybe e they might do away with the consumer UNFRIENDLY method of "bundles"

I cut my cord more than 10 years ago and have not looked back.

 

[acidsoul]

If this means more content will be available outside of the USA, awesome. There are already too many Apple services I can't use, or are very crippled.

 

[JohnStrass]

In the UK, there is a lot more TV content than films on Netflix - quite a lot of American series are now made available this way in the UK, or at least it feels like that. But that said, I agree they're non-comparable services as you still have to wait 6-12 months for most series to make an appearance and 2-3 years for films (if you're lucky!).

Normally, we don't feed trolls, but when a guy dumps on netflix like this "... All you can get is old crappy movies which is why its only $9/month...", need to call him out. Netflix has filled all of my TV and movie needs. In fact, I don't even get over-the-air tv or cable. I just wait for the season of DVD to come out and then watch.
====

As for the "crappy old movies" I guess he means the 6 Star Wars I just watched ....

 

[adhir]

One thing being missed in all this AppleTV, cord cutting discussion is the lack of the ability to watch passively / channel surf; i.e. just show me whatever's on in any of several different channels. I don't always want to pick something specifically.

 

[Chupa Chupa]

A smaller bundle of channels is still a bundle. The fact it's available via an ATV box and not a DTV or Cox or Comcast box is irrelevant. It still limits consumer choice. Just end network socialism and unbundle every network and let them stand or fall on their own merits.

As it in now I'd rather keep paying $80/mo for my DTV w/ 175 channels, DVR, and free on demand than pay $40 for 25 channels. Now if I could pick and choose the 10% of channels I actually watch for $40 rather than have Apple curate the ones they will offer then I'd be interested.

 

[newdeal]

Yeah I don't see this happening at all

 

[Rogifan]

It's not about the cost Comcast Cable pays internally for Comcast Media... it's about the negotiating power they have internally to leverage that content when making deals for other content. Used for good, it could stem the ever-increasing per-subscriber costs... used for profits, it'll be a game of one-upsmanship as contracts end -- ie, you charged me 5 dollars for your package of channels? I'm not selling mine to you for less than 6...

So Apple has to spend $70B in order to stand up a streaming tv service? And that's assuming consumers want skinny cable -like bundles which I'm not sure we have evidence they do. My worry is Apple is being pressured to do something because of all the cash they have and what's happened to the stock over the last few months. I would hope Tim Cook avoids that pressure. As I was typing this CNBC had on the former CFO of Pixar and both he and CNBC's Jon Fortt said Apple buying TW seems like a really bad idea and it could even force Bob Iger to have to leave the board. They said exactly what I say, that Apple should be about creating THE platform for others content and the best UX around that. They also said if owning content was the ticket then Sony would be ruling right now.

 

[BuffaloTF]

Why should anyone think that Apple should charge a ridiculous low amount for their TV. Service? Why does anyone think that cable companies would or should just open the door for someone to come in and ruin their profits? That's not how any business works. Any company with a strangle hold on anything owes it to their stock holders to continue to have a strangle hold on it. Anyone thinking that you will somehow get streaming TV. That competes with cable for 20 or 30 bucks a month is fooling themselves. If Apple or any company figures out how to wrangle the control of cable away from cable companies they will just become the new version of what you currently hate now. As a side note, if that happens you can basically expect to pay more....much more for your internet service.

I don't think $40 is ridiculously low... comparable services are Sling and Vue. Sling charges 20 dollars for it's base package with 22 channels, with multiple optional 5 dollar add-ons... only 1 stream at a time. Vue charges 50 dollars for it's base package of 50 channels with 54 channels and local broadcast channels, with optional 5 dollar and 15 dollar upgraded tiers for around 65 and 90 total channels respectively - multiple streams allowed. $40 brings you right in between, sort of in line with Sony's more traditional take on TV service.

What truly differentiates this, is the typical price everyone pays today can become outrageous because the cost of overall service skyrockets when you add a DVR, even more if you have multiple boxes and do whole-home DVR -- to the tune of 20-25 dollars per month for that; the extra boxes cost 10 dollars per month each. Your typical American family of 4, with your living room TV and one in your bedrooms can be paying around 60 dollars more per month beyond your package cost just for service on those alone. Now this allows you to eliminate the box costs... the streaming service has DVRs in the cloud, or simply allows you to play them on demand. Package costs, using DirecTV as my example here (because that's what I use), start at 50 dollars. Then there's tiers of 60, 70, 78, 87, and 137 (for every channel and premium).

With that said, I would imagine that there'd be a huge market of people who would be utterly thrilled with the notion of having no box fees, and paying *only* 40 dollars and customizing beyond that point. The Apple TV box would pay for itself in no time.

 

[igorsky]

I think complaints about Apple's potential pricing are misplaced. A lot depends on contect providers who, as we learned from the latest attempt at an ATV bundle, are about as greedy as the cable companies.

 

[CFreymarc]

"If you can't work with them and need their resources, buy them and fire the difficult managers." -- you know who

 

[H2SO4]

I don't think you quite understood the gist of my post. It's not that I'm "OK" with playing by this rule or that rule. That wasn't the topic I was discussing. Buying TW would be buying leverage, which Apple currently lacks when going up against the cable industry. They've tried approaching them with bundle and streaming ideas, and have been declined more or less with "No thanks, we like things the way they are." Basically, go pound sand. They're the ones that own the content and distribution methods.

Apple has a distribution method, they just need to actually own content. If Apple comes to own TW's media assets, Apple is then free to offer that content however it wants through it's own distribution service which would of course be Apple TV and iTunes. As has been discussed, we could actually see a-la-carte or select channel packages come to fruition. And once that happens, companies like Comcast, Fox, etc would be more accepting of changing the current cable model.

I did. I think.
I was broadening the point. Quite a few devs I’m sure have complained to Apple about their business model and no doubt been told do ‘do one’, as they wanted to restrict things to what suits AAPL best.
The App Store is like Amazon in a sense. You’re in it as long as you pay your way and behave in a manner that suits the owner. Remember, the devs can’t offer the kind of deals they might like to.
If Apple get hold of this those garden walls will be both more wide reaching and higher.