Apple's TV Plans Fell Apart Over Content Owners' Resistance to Skinny Bundles

[bpeeps]

Correct - the content providers basicaly want everything to stay as it is, meaning their service is an on/off switch and you either buy all of it or none of it. Its a prehistoric way of doing things. They know that but dont want to cave just yet. Ive been antenna/streaming/owned blu-rays for years now. I was one of the first to cut the cord!

The argument is made that if people just choose what they want then several channels will fold up since they arent self-supportive. I say let them die off then, naturally. Thats the way of things. Why do we have to subsidize the Farming network, golf tv, etc, etc? No thanks.

Its the sports that keep a lot of people subscribed. Sports are what cost the most to "get" rights to. ESPN alone eats up a ton of the channel budget. The local sports team networks too like MSG, Mets channel(SNY), Cubs(WGN), etc, etc. all cost money and have die-hard viewers.

Those channels reduce the price of the channels you want to watch bruh. When those channels and ads are gone, guess who's going to pay for that missing revenue? Your pick and choose channels won't be cheap.

 

[Michael CM1]

Start your own media company, Apple. Here's a start:

Apple Movies: A channel of movies. You can even make your own.
Apple Television: A channel of shows. Make your own as well.
Apple Sports: Find some sports leagues that don't get full coverage of games and such. HDNet did this back in the day with MLS and the NHL. Broadcast their games, create a wrapup studio show like SportsCenter without so much corn.
Apple Games: A channel devoted to video games. Kind of like G4, maybe more like IGN.
Apple Fitness: A channel with workout shows and the like.
Apple News: Give some good journalists a job doing what CNN did back in the day. Try to stay out of the opinion biz since that's kinda covered.

That's just off the top of my head. Make these available as an app on Apple TV, iOS and the major competitors. Create a subscription for like $5 or $10 a month, whatever the bean counters say it's worth. You've got cash to burn. The only way to upend these behemoths is to beat them. Netflix and Hulu were nothing about six or seven years ago.

 

[John Mcgregor]

Of course. Many have tried and failed to do this, and I didn't think Apple had any special way to make it work.

If they are serious they need to do what Netflix does and then at some point studios will have no choice, but give in.

 

[Fafafoooey]

I think if Steve Jobs was still alive, being a major stockholder of, and having such a relationship with, Disney, they would have gotten all Disney channels for the "bargain" price or the slim channel list that Apple is looking for. Although I am sure the relationship is still good between Apple and Disney, there is no "pressure", without Jobs, for Disney to give in to Apple.

 

[69650]

I would just give up negotiating with the content providers as they're never going to agree to a "skinny bundle". Just provide the individual channels who want to play ball and add a Netflix style subscription model for iTunes Movies & TV Shows. That would suffice for most people.

 

[Popeye206]

Start your own media company, Apple. Here's a start:

Apple Movies: A channel of movies. You can even make your own.
Apple Television: A channel of shows. Make your own as well.
Apple Sports: Find some sports leagues that don't get full coverage of games and such. HDNet did this back in the day with MLS and the NHL. Broadcast their games, create a wrapup studio show like SportsCenter without so much corn.
Apple Games: A channel devoted to video games. Kind of like G4, maybe more like IGN.
Apple Fitness: A channel with workout shows and the like.
Apple News: Give some good journalists a job doing what CNN did back in the day. Try to stay out of the opinion biz since that's kinda covered.

That's just off the top of my head. Make these available as an app on Apple TV, iOS and the major competitors. Create a subscription for like $5 or $10 a month, whatever the bean counters say it's worth. You've got cash to burn. The only way to upend these behemoths is to beat them. Netflix and Hulu were nothing about six or seven years ago.

Actually... this is what they should do.... or just by Netflx and HBO and they would have a good start.


BTW... seems like the pressure is on though... Apple has to do something in this area and not just rely on partners to bring the content. Amazon is putting on the price pressure and Netflix is building a good library of Content.... Time for Apple to pull out the stops and make AppleTV the one to have.

 

[s2mikey]

Those channels reduce the price of the channels you want to watch bruh. When those channels and ads are gone, guess who's going to pay for that missing revenue? Your pick and choose channels won't be cheap.

Yeah well, they can suck it. Ive been OUT of the rip-off cable/satellite game for a while and Ive saved thousands of dollars. Havnt missed it a bit. We have MORE to watch now(shows, live TV, movies, etc) than we ever did. Thats because Pay TV is actually loaded with reruns, garbage channels, and various other content that just doesnt matter.

I aint "paying" for nuttin!

 

[Taustin Powers]

My DVB-T antenna cost me €5, one time. It gets me ~30 channels, about five of which are even remotely useful sometimes. Good for the occasional soap opera, news or casting show - basically mostly trash, really. Stuff to have on in the background.

For quality programs I pay €9 / month for Netflix and $5 / month for a proxy service that lets me access Netflix content from all regions in the world. So, for about €14 / month, I get more content than I could ever watch, on demand, without ads.

How people pay those abhorrent rates for cable TV packages is completely beyond me.

 

[Rogifan]

People don't care about channels they care about content. Apple doesn't need a skinny bundle of channels they need a device that makes it dead easy for people to find, watch and subscribe to content they're interested in. Put all their efforts into Siri and universal search. Revamp the UI so instead of seeing a screen with rows and rows of apps it shows me new episodes of shows I might be interested in watching or new movies or music that just dropped that I might be interested in. Give me an option in settings to choose sports/teams I'm interested in and provide an easy way to get scores and tune in to a live game or match right from the scores screen if available. I'm a huge golf and tennis fan but as far as Siri is concerned those two sports don't even exist. There is so much Apple can do, so much potential Apple should forget the skinny bundle and focus on making TV software/platform better.

 

[mantan]

" TV executives will say that they understand that consumers don't want to pay for channels they don't watch, all of them will argue that their channels are must-haves."

They should have wrote instead, "TV executives say that they understand that consumers don't want to pay for channels they don't watch...they just don't care because they are greedy and selfish"

Newsflash. Every corporation in America is 'greedy' in this regard. Even Apple (see 16 gig phones, 5400 RPM hard drives, stripped down base models, charging obscene prices for memory upgrades, etc.)

 

[mantan]

People don't care about channels they care about content. Apple doesn't need a skinny bundle of channels they need a device that makes it dead easy for people to find, watch and subscribe to content they're interested in. Put all their efforts into Siri and universal search. Revamp the UI so instead of seeing a screen with rows and rows of apps it shows me new episodes of shows I might be interested in watching or new movies or music that just dropped that I might be interested in. Give me an option in settings to choose sports/teams I'm interested in and provide an easy way to get scores and tune in to a live game or match right from the scores screen if available. I'm a huge golf and tennis fan but as far as Siri is concerned those two sports don't even exist. There is so much Apple can do, so much potential Apple should forget the skinny bundle and focus on making TV software/platform better.

Again - customers may not care about channels. But content creators count on the steady reliable revenue from channel subscription and ad fees to create content. So if you remove the channel equation from the mix, who pays the content creators for the shows?

And if it's the customers who are just watch that content.....a lot of shows (including the ones you like) aren't going to be made.

I think there is a better solution than what's out there. But people have to be realistic about what it can entail. A system like the one you describe would be possible, the challenge would be customers would have to be willing to pay a realistic price for content....(Plus Apple's fee in their somewhere.)

There was a really good post in this thread that talked about 'tiered' customer bases. Some people need to watch shows that day or within 24 hours. Mostly sports (live) and really popular TV shows (Breaking Bad, Walking Dead, Game of Thrones, etc.) The network sites have already shown there is a market to post that contact within 24 hours and still get a lot of hits. Then there is the day old bagel crowd who is completely fine paying less to see the show at a much later date. (Netflix tapped into this.)

The devil is in the details of coming up with a pricing structure that replicates what content providers are getting now. If it doesn't, it's just not gonna fly.

Go to the business your in and have someone tell that you should significantly cut your revenue and cut them in as a partner. See how well that flies. That's essentially what Apple is trying to do here.

The networks have been trying to balance this act themselves. Which is why you see content on their websites and other online distribution channels. But they are going to try to figure it out on their own terms...rather than Apple trying to elbow their way in.

 

[rdlink]

OK, can I buy Apple products at my "name my desired price" of about 90% off of current pricing? No more gold plated private jets for Apple Execs. No more champagne waterfalls. No more spaceship campus construction. Etc.

But let me guess: Apple corporate Execs earn every penny and are fully deserving of every perk. It's all the other Execs at other companies that won't do whatever Apple wants that are the greedy crooks selling overpriced products.

Don't understand your point. Is Apple telling you that in order to buy a MacBook you have to buy an iPhone? Or that you can't buy a single Taylor Swift song unless you buy them all?

This is funny considering that Apple has higher profit margins and higher revenues than all of the media companies combined.

Which has absolutely nothing to do with my post.

 

[Waxhead138]

Bingo:

Turns out some guys finally figured out game theory.
The music execs didnt against apple with itunes..
the telecom carriers didnt against apple with iphone
and the book publishers didnt against apple with ibooks (although the lawyers did)

The network execs did.
As soon as one network buckles, everyone will be forced to buckle.
But if everyone bands together, apple will have no power and everyone will continue to enjoy being able to charge customers for channels they dont want.

Eddie Cue didn't manage to conjure his magic this time

I was just thinking this on a much more basic level: The TV execs / Complex basically just learned from the past examples with other media types, and how to defend itself at least in the short term. They if nothing else will maintain control, and with that, some negotiating power for awhile yet.

In the long term I think distribution methods will continue to change (as they already have) but the Networks will be smart enough to not lose complete control in the process.

 

[Popeye206]

And likely the end of a lot of shows you like. Cable TV pushed the quality of programming up signficantly. But a lot of that was either made by premium channels like HBO or cable networks that used the safety net of bundled channel revenue to pay the way. Shows like Breaking Bad, Game of Thrones, Walking Dead, etc are a lot riskier when they have to pay their own way.

Everybody assumes that a la carte and skinny bundles will save the shows that THEY like. But many of those shows/stations are part of larger network packages that use the revenue from those subscription fees and ad dollars to fund the whole spectrum.

BTW... Game of Thrones does have to pay it's own way... HBO is all subscription based and relies on viewers paying.

It's not the mega hits like Breaking Bad or Game of Thrones that will have a problem... it's going to be shows like Honey Boo Boo, or Living Naked in the Woods that will not see the light of day. I'm sure you can see, that would be a good day when that happens.

 

[HobeSoundDarryl]

Don't understand your point. Is Apple telling you that in order to buy a MacBook you have to buy an iPhone? Or that you can't buy a single Taylor Swift song unless you buy them all?

You're twisting the conversation. My point was basically pot calling the kettle black. You had just painted the media companies as greedy crooks, not deserving of their "champagne waterfalls" and "gold-plated jets". What you were implying is that they are deserving of disruption such that their products should end up taking a huge revenue haircut. I can get behind some of that sentiment myself.

However, expecting Apple to be this savior is pot calling the kettle black. Apple execs are probably not unfamiliar with champagne waterfalls and private jets themselves. Believing that Apple can come into this business and take their 30% off the top while delivering our "huge discount" dream is delusional. What has Apple ever stepped into as new middleman that resulted in some huge discount for consumers? Why will it be different with THIS business?

I can somewhat go with you on the concept of "greedy media execs." But I can't turn a blind eye to seeing "greedy Apple execs" at the same time. When someone references richest company in the world, does anyone ever guess they are referring to a Cable or Media company? Is any Cable or Media company even in the top 5 or 10 of a list of the richest companies in the world?

Even if it was possible to fully swap out a Comcast middleman for an Apple middleman (and that's not possible because a Comcast is going to get theirs on the broadband side even if an Apple could take their entire CableTV subscription business) I have no- nor choose to spin no- illusion that Apple's take as new middleman would be significantly less than a Comcast's take as current middleman... and thus there's no "huge discount over what I'm paying now" if Apple steps in as new middleman. I can't think of any scenario where a new, for-profit middleman is added into any modern chain between product creators and product consumers that resulted in lower prices for the latter. Can anyone name ONE such case in the last 10 or 20 years?

 

[mantan]

BTW... Game of Thrones does have to pay it's own way... HBO is all subscription based and relies on viewers paying.

It's not the mega hits like Breaking Bad or Game of Thrones that will have a problem... it's going to be shows like Honey Boo Boo, or Living Naked in the Woods that will not see the light of day. I'm sure you can see, that would be a good day when that happens.

You're right about GOT....subscription based programming.

But I'm not sure about Honey Boo Boo or absolute junk programming. If it's numbers driven, there is going to be an appeal to the lowest common denominator.

It's been a golden age for television in that high quality programming has come from a variety of sources pay subscription, basic channel and now even Netflix/Amazon Prime. It in turn has driven the networks to (somewhat) improve their quality.

But I think a 'pay your own way' model will lead to content providers taking less risks. A show like Breaking Bad took 2 seasons to find it's way and 4 seasons to find an audience. But would it have made enough or shown enough promise to get greenlit...or commit to 5 seasons without the revenue A&E knew they would getting.

 

[diamond.g]

If Comcast gets it way (and like the telcos the others will likely follow) they will cap our bandwidth. With more data going over IP they will find a way to get their cut out of folks that don't want to use traditional cable. On top of that they have already been complained to for not counting their own IPTV services in that cap.


I would love to get rid of cable (once my 20 month commitment us up), but somehow I can see that I'll be paying as much for what I pretty much watch now.

 

[HobeSoundDarryl]

You're right about GOT....subscription based programming.

But I'm not sure about Honey Boo Boo or absolute junk programming. If it's numbers driven, there is going to be an appeal to the lowest common denominator.

It's been a golden age for television in that high quality programming has come from a variety of sources pay subscription, basic channel and now even Netflix/Amazon Prime. It in turn has driven the networks to (somewhat) improve their quality.

But I think a 'pay your own way' model will lead to content providers taking less risks. A show like Breaking Bad took 2 seasons to find it's way and 4 seasons to find an audience. But would it have made enough or shown enough promise to get greenlit...or commit to 5 seasons without the revenue A&E knew they would getting.

Yes, while the oft-spun Netflix concept and it's dirt-cheap pricing built atop mostly long-since, in-the-can programming is biasing most of our imaginations, brand new programming creation in this "new model" thinking is a complete mess. Part of what gets a Breaking Bad to market as one of many pilots (most of which will fail) IS the cushion of profitability built into the "as is" model. If we got what we think we want- some kind of huge squeeze on that profitability to deliver the huge discount over what we pay now- that cushion goes, so a Breaking Bad doesn't make it. Nor do classics like Cheers and Seinfeld and many others that didn't find their audience for a long time.

Some "new model" al-a-carte where every pilot will need to make enough money on episode 1 to warrant the creation of an episode 2 should put a great squeeze on the creation of anything completely new and especially on anything with high budget costs-per-show. In short, this "new model" where we actually get our huge discount and an Apple gets their 30% cut and the Comcasts they replace as TV middleman make up for their losses in higher broadband probably means the creators- the Studios- have to be the one's to take the hit to deliver our "big savings." If so, I expect a quality migration more toward YouTube-type programming where costs are cheap and talent costs as little as nothing vs. what we are accustomed to seeing in current programming with big production budgets and professional actors skilled at their craft.

Again, I think the whole "new model" discount comes down to picking who in the following chain takes the hit to deliver the big discount we think we should get:

Creators (Studios) -> Distributors (Cable/Broadband) -> Apple (new middleman) -> Consumers​

Apple won't subsidize it to make it cost much less for us consumers (and why should they?). Cable doesn't have to take the hit since they have a lock on the broadband pipe such than an Apple can't deliver one minute of "new model" programming without the use of that pipe. Who's left? And how do they do what they do anywhere near as good as it's done now while taking the 80%-95% haircut that we seem to expect in this "new model"?

Is there some waste that could be squeezed out of the "as is" to deliver the same quality & breadth & depth at a lower price? Sure. But I could say the same for stuff like Apple products too. But neither Apple products or Media Products have 80%-95% of waste that could be eliminated to turn our $100/month bill into $10 or $20. If we get what we seem to be wishing for, we should expect new media creations to be more toward the YouTube programming quality than what we are accustomed to in the "as is" model. Cheaper productions will rule and much fewer pilots will come to market. Why? It's the only way it can go if we get our discount. Suck 80%+ out of Apple's pricing and the same quality of Apple products are not going to continue to stock shelves either (if Apple could even survive such a dramatic haircut).

 

[naeS1Sean]

I really dislike this post.

Not only is it not possible to prove one way or the other, it adds nothing to the discussion and is, a best, a tired old "joke". Enough already.

Thanks for basically saying I'm worthless. I think you're great, too.

 

[naeS1Sean]

Sounds EXACTLY like my grandpa, now deceased, who lived his whole life in the past, claiming those all the now dead ppl he knew would have done it better and different with not one tiny bit of proof. Loved him to death, but boy he had trouble living in the present.

Sorry I spoke.

 

[naeS1Sean]

I really hate posting in this forum anymore. People are so extraordinarily mean to each other. Thank God Mac Rumors monitors it here.

 

[Atlasman]

Following comments made by CBS CEO Les Moonves on the state of Apple's rumored television service, news leaked confirming Apple has put plans for such a service on hold for the time being due to difficulties securing content deals.

While Bloomberg spoke to a source that chalked the failed negotiations up to media companies demanding more money than Apple wanted to charge for the service, Re/code's Peter Kafka has added some additional context, pointing towards a reluctance to unbundle channels as another factor that killed the service.

Apple was hoping to offer a limited bundle of approximately 25 channels at a price of $30 to $40 per month, but even early on, there was pushback from content providers who wanted Apple to offer all of their content rather than just a few select channels. A rumor in April concerning negotiations between Disney and Apple suggested Disney was pushing Apple to include most of its content, including ESPN, Disney Channel, Disney Junior, Disney XD, ESPN2, ESPN Classic, and more, while Apple wanted to offer just a few of Disney's channels.

According to Kafka, the situation with Disney happened with other content providers, many of whom did not want to offer just a small selection of channels from their content catalogs.iTunes chief Eddy Cue offered media companies an option to sell additional tiers of channels (such as a sports package) alongside a core service, but refused to compromise on offering a larger number of base channels. "He doesn't want to have filler," a TV executive told Re/code.

According to Re/code's TV industry sources, Apple has been "quite vocal" about the end of negotiations with media companies, which stopped a couple of months ago. While Apple has suspended its plans for the time being, rumors have suggested the company isn't "giving up entirely" on a television service.

For the time being, Apple will focus on its tvOS App Store, offering content providers a platform to sell content to customers. As Kafka says, Apple may be able to change the minds of media companies if it can prove the Apple TV is a "transformative platform," but the company has a long way to go to reach that goal.

Article Link: Apple's TV Plans Fell Apart Over Content Owners' Resistance to Skinny Bundles

The content should come directly from the source—Apple should focus on delivering a system that can bring these individual sources as though it were one.

 

[Rogifan]

Again - customers may not care about channels. But content creators count on the steady reliable revenue from channel subscription and ad fees to create content. So if you remove the channel equation from the mix, who pays the content creators for the shows?

And if it's the customers who are just watch that content.....a lot of shows (including the ones you like) aren't going to be made.

I think there is a better solution than what's out there. But people have to be realistic about what it can entail. A system like the one you describe would be possible, the challenge would be customers would have to be willing to pay a realistic price for content....(Plus Apple's fee in their somewhere.)

There was a really good post in this thread that talked about 'tiered' customer bases. Some people need to watch shows that day or within 24 hours. Mostly sports (live) and really popular TV shows (Breaking Bad, Walking Dead, Game of Thrones, etc.) The network sites have already shown there is a market to post that contact within 24 hours and still get a lot of hits. Then there is the day old bagel crowd who is completely fine paying less to see the show at a much later date. (Netflix tapped into this.)

The devil is in the details of coming up with a pricing structure that replicates what content providers are getting now. If it doesn't, it's just not gonna fly.

Go to the business your in and have someone tell that you should significantly cut your revenue and cut them in as a partner. See how well that flies. That's essentially what Apple is trying to do here.

The networks have been trying to balance this act themselves. Which is why you see content on their websites and other online distribution channels. But they are going to try to figure it out on their own terms...rather than Apple trying to elbow their way in.

But that's not Apple's problem to solve. And I think there are plenty of things Apple can focus on to improve Apple TV without wasting energy on a silly skinny bundle cable like package.

 

[mkldev]

Everybody assumes that a la carte and skinny bundles will save the shows that THEY like. But many of those shows/stations are part of larger network packages that use the revenue from those subscription fees and ad dollars to fund the whole spectrum.

Actually, with the exception of sports fans, everybody is right. The overwhelming majority of the money that cable companies pay to content providers goes towards sports programming. If sports could be completely segregated into a sports package, then consumers would have more control over that cost, and consumers would see the actual cost of sports reflected in their bills.

The non-sports viewers would pay about $10 a month, and the sports viewers would pay an extra $20. Now suppose that the non-sports viewers continue to spend $30 per month towards their TV viewing rather than cutting their bill so dramatically. Suddenly there would be more money for everything else but sports.

Let me put the true cost in the proper perspective.... In 2014, ESPN signed a $24 billion dollar, 9 year deal with the NBA. Thats almost $2.7 billion per year for access to just a single sport by a single network. If you took a major network's average cost for prime-time drama (about $3 million per episode), that means ESPN's deal cost them about as much as two entire seasons of prime-time drama, for three hours per week, seven days a week. They have to bring in a lot of revenue to cover those sorts of costs.

This is why Disney/ABC is so adamant about ESPN being part of the base package. Most of their revenue actually goes to a single, enormously expensive channel, and they know that a sizable percentage of users would dump ESPN if they could. Given how few new shows Disney Channel produces each year, their half-hour format, and the relatively low budget under which they operate, you could probably pay for all of the Disney channel's new programming for the rest of our natural lives for less money than ESPN spent for a single year of NBA coverage.

Right now, TV networks are producing shows that aren't nearly as good as the shows of even ten years ago, and one big reason for that is that all the money is being siphoned off to pay the sports franchises. Fix that problem, and everything except sports will get significantly more money than it does now, the quality of shows will improve, and the performing arts as a whole will benefit from it.

 

[macguru212]

For the love of Pete,

Here's what you do Apple:

Figure out a way to integrate this:

into this: ------->

and also add this:

to this --------------------->

Pour your billions of dollars and engineering to perfecting OTA reception. Slap on the usual Apple interface polish (7.1 WHABC-TV listing = ABC) and....

Voila! The TV industry will collectively **** its pants and will come back to the table and reason for a more acceptable price.

This would terrify them.

There's no OTA because Apple can't make money off it. But yes, your entire concept is spot on.