WSJ: Apple’s shot at launching a TV streaming service hurt by its own difficult demands

Apple's proposed service combined live TV with on-demand streaming of entire seasons, but major networks didn't bite. The Wall Street Journal explains why.

When Apple debuted a brand-new Apple TV device in 2015, many of us were left scratching our heads after the announcement. Where was Apple’s long-rumored TV streaming service?

A new report outlined in the Wall Street Journal on Thursday pulls back the curtain a bit to reveal what may have happened: The story claims that Apple’s senior vice president of internet software and services Eddy Cue proposed demands that were too difficult for major networks to meet. According to the WSJ’s sources, Apple met with Disney (the parent company of ABC and ESPN), Fox, CBS, Comcast (the parent company of NBC), and Time Warner (the parent company of HBO, TNT, CNN, and more) several times between 2009 and 2015, outlining plans for a service that went against standard industry practice. When discussing details of the meeting between Apple and Disney, the report states:

“In particular, Apple wanted to freeze for several years the monthly rate per viewer it would pay to license Disney channels. TV channels usually get annual rate increases and rely on them to fuel profit growth.”

This streaming service Apple pitched to Disney was set at $30 per month for consumers, and would combine live channels with a library filled with full seasons of popular shows available on demand. However, network execs fear that these terms “could allow traditional cable-TV distributors to demand the same deal.”

The WSJ report further explains that Apple was hesitant to share details about its planned service with providers—including what the Apple TV navigation UI would look like—which made it a hard sell. Apple also wanted all users to sign in with Apple IDs but leave billing and customer service up to the networks, and proposed $10 a month per subscriber as their revenue share.

The full article takes an even deeper dive at all the details, which you can find here.

The impact on you: This isn’t the first time Apple has driven a hard bargain when it comes to content sharing with other partners. With the launch of Apple Music in 2015, Cue had a very public discussion with Taylor Swift over artist royalties, which Apple didn’t want to pay during Apple Music’s three-month free trial. The company eventually reversed its decision, seeing the power that an artist as popular as Swift has over the industry.

But the cable industry is not like the music industry, as the report points out:

“We’re challenged in a lot of ways, but we’re not waiting for this white knight to come racing in the way music was,” one senior TV executive says.

Apple’s hardware sales are down across the board, as shown during the company’s quarterly earnings report released on Tuesday. While they still earned $42.4 billion in revenue, new products and services in its arsenal will only help the company grow, especially when considering the required monthly subscription fee. Apple’s current TV strategy includes channel-based apps and an upcoming lineup of original shows.

If we ever hope to see a true streaming service on the Apple TV, the company will need to be willing to bend their demands a little bit, and work with major network heads on a forward-thinking solution that works for all parties—including viewers at home.

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Leah Yamshon

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