Grappling With TV Providers Leaves Apple Sweaty and Winded
Apple wants to release a streaming TV service for Apple TV users by year's end, but negotiations with content providers have hit a brick wall, according to a recent report. With content producers, cable and satellite providers and competing online services all in the mix, it's apparently proven difficult for Apple to get a firm handle on a deal.
In addition to the television content it already provides via iTunes, which customers can buy and download on a per-episode basis, Apple wants to secure content for streaming video, offering channels in much the same way it presently offers apps, according to the report.
But providers, which have already secured relationships with cable networks, satellite TV and streaming services such as Hulu and Netflix, are reportedly reluctant to jump on board with the electronics giant.
The company ran into the same problem in 2009, according to the story, when Apple was apparently set to offer a bundle of shows for a monthly subscription fee. The deal never went through.
Must Have Control
"Apple's need for control plays a part in this negotiation stalemate," Jia Wu, senior analyst at Strategy Analytics, told MacNewsWorld.
If such a stalemate is indeed going on, Apple isn't be the only company to bicker with content providers. The initial launch of Google TV launch lost a significant amount of traction when major networks such as ABC, NBC and CBS blocked the device's access to their streaming services. Netflix has also had issues securing content, especially for its streaming services, and recently lost a contract with Starz.
Unlike the music industry, in which Apple's iTunes has a strong hold on content, the TV industry has more competitors from different sectors.
"Cable, satellite and telecom companies have huge stakes in the game, and they are willing to invest heavily to make them relevant no matter what new products come to the market," said Wu.
Because of those aggressive competing forces and the state of the digital media industry, it could be more difficult for Apple to work its way in.
"The music industry was in serious trouble when Jobs tried to launch the iPod, but the total audiovisual industry is still growing now despite the decline of DVD sales," said Wu. "So unlike the music industry, Hollywood studios and content providers are not desperately looking for someone to save them at the moment, and they are tough negotiators due to their current position."
Hindsight is also an advantage to TV providers.
"The content providers have witnessed how the music industry lost control to Apple, and they do not want to repeat this," said Wu.
Kaput Without Content?
"Apple's programming is its problem," Paul Sweeting, principal at Concurrent Media Strategies and digital media analyst at GigaOM Pro, told MacNewsWorld. "Somebody has to give them the rights to content, and the providers would have to see some advantage to doing that, and right now there's not that advantage."
However, Apple has other forces working for it that could give it an advantage in the crowded markets in which it has a stake.
"Apple still has a chance to succeed, as no one has really established a leading position in the audiovisual service market yet. Apple's advantage is their track record of releasing revolutionary products, their brand and marketing power as well as their large fan base," said Wu.
Apple did not respond to our requests for comment.