Can Apple bully its way to a streaming TV service?

Can Apple bully its way to a streaming TV service?

Summary: Apple may have ultimately earned the upper hand over the music industry with the iTunes store, but its similar bare-knuckled negotiating tactics don't seem to be working as well with the TV industry, according to a recent report in the NY Post.At issue is a streaming TV service that Apple is supposedly trying to develop, presumably to work with a rumored Apple television set (though it could also be a possibility for its Apple TV boxes and even the iPad).

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TOPICS: Apple, Hardware, Mobility
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Apple may have ultimately earned the upper hand over the music industry with the iTunes store, but its similar bare-knuckled negotiating tactics don't seem to be working as well with the TV industry, according to a recent report in the NY Post.

At issue is a streaming TV service that Apple is supposedly trying to develop, presumably to work with a rumored Apple television set (though it could also be a possibility for its Apple TV boxes and even the iPad). While an Apple television would be highly anticipated and probably very popular, it's hardly the same landscape that music labels faced when the iTunes Store was first presented to them. Then, free downloading was rampant and the iPod was quickly establishing itself as the MP3 player. In other words, Apple had huge leverage and used it to the hilt.

Though the video landscape is in a state of flux, with streaming services like Netflix and Hulu battling traditional cable and satellite companies for the viewing minutes of consumers, broadcasters aren't in the same state of utter panic over their immediate future. Not surprisingly, then, media execs aren't exactly caving in to Apple's offers, which one describes as "They want everything for nothing."

Apple apparently is also trying to get pay TV providers to abandon their set-top boxes and work with Apple's UI and devices instead. As with broadcasters, cable companies -- shockingly -- aren't that interested.

You can't fault Apple for trying to upend the industry in the way it's done before, but you do have to wonder if this is an example of the late Steve Jobs' "reality distortion field" in action. It's hard to negotiate that "we decide the price, we decide what content" -- as one source told the Post -- when there's already a huge existing base of TV owners, legacy set-top boxes, established streaming services, and mobile apps from TV providers and networks alike.

It's clear that offer streaming TV apps with the roll out of an "iTV" is part of the Apple strategy to appeal to cord cutters as well as fanboys. But as long as networks perceive that their content is more valuable to Apple than Apple's devices are to them, those apps may be limited in number.

Do you think Apple will eventually be able to persuade broadcasters to offer their programming for a streaming TV service? Let us know your thoughts in the Comments section below.

Topics: Apple, Hardware, Mobility

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28 comments
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  • Apple has a good relationship with Disney which owns ABC

    Apple also has 90 Billion and growing in reserves. So in theory it could purchase outright or buy controlling shares or enough shares to effect the decisions of other studios? So who knows? Not sure what the valuations of these companies are but I'm thinking while perhaps in the billions not 90.

    Pagan jim
    James Quinn
    • I doubt that Apple could

      purchase controlling shares of studios, Disney included.

      Yes, they have a good relationship, but it was Steve Jobs' and his family, not Apple, that owned those shares.

      NBC is owned by GE and Universal, Universal in turn is owned by Comcast, which in turn has far larger control and presence in media then Apple, so I doubt that Apple could come close to controlling them or forcing them to relinquish any type of control.

      What can Apple offer that these comapnies do not already have? What can Apple do to these companies that would force them to keep giving content to Apple?

      And there is also the SEC, DoJ, and FCC to contend with. Apple need tread [i]very[/i] lightly there.
      :|
      Tim Cook
  • jobs had the mojo

    Steve Jobs had the charisma to do it, but with netflix and others spoiling the pool, it will be a challenge to fight ofor content that Apple doesn't own
    flyguy29
    • De Ja Vu

      Is this a reprint (light modification) of last years article on the new improved iTV Apple Thingy? Take over your viewing by storm?

      I have a smart tv, I have HDTV's, I have streaming, satellite, Prime ...... what does Apple bring to the table to get me to even consider replacing some / all my current hardware? Especially when their old "model" of show by show or channel by channel was significantly more expensive?
      rhonin
    • Netflix

      Netflix streaming is a joke. They have almost no content worth watching. I cancelled my service and just get DVDs from Blockbuster by mail. Same price with much, much better selection.
      gribittmep
  • Nope

    They use a rental only model through their TV service and offer no free cloud storage options.

    Amazon's service is in just about every Smart TV or Bluray player out there and your movies are stored free of charge forever as long as they are purchased from Amazons Streaming Service.
    slickjim
    • Works really well

      Have a Smart TV and Prime movies / shows via Amazon are great.
      Add Hulu Plus and satellite tv and I have just about anything I want.
      What would Apple provide that replaces what I have and justifies the hardware outlay?

      For me, this is what it would be fighting....
      rhonin
      • Yep...

        I don't have a prime membership but I have season 4 of Breaking Bad and about 5 other movies I bought through them. If they get closed captioning on more videos and tv shows, I will buy more from them but for now it is just kids movies that are on their server.
        slickjim
    • Actually, purchases & free cloud storage are there

      There was a time when Apple TV was rental only but they have offered movie and TV season pass purchases for a long time now. And prior purchases can be streamed from Apple's cloud. No need to download.
      jimoro
  • Playing hard to get

    Oh I am sure they are interested. But we have to understand what the broadcasters want and it ain't the piddly 70% of whatever the end user pays for the service. Protecting revenue streams, they want access to Apple's trove of user information as well as advertising rights.
    oncall
  • Of course they can

    Everybody who has underestimated this company and their customers since the late 1990s has egg in their face
    edkollin
    • Steve Jobs underestimated his own company many years ago

      which is why he was only worth 6 billion, when he sold his shares as he had no faith in it's future.

      Also, What can Apple offer that they do not already have?
      Tim Cook
      • You missed one vital part in your emotional rush

        to bash Apple - Steve jobs had no faith in an Apple Computer [i]without[/i] Steve Jobs as he sold is stock shortly after being ousted from Apple. And he was proven correct. Apple went into a decline after he was ousted and did not make a comeback until after he took over as CEO.

        Having said that I have to agree with your assessment of Apple being able to bring anything different to the streaming TV service market that does not already exist.
        athynz
    • Apple won't be dictating the terms of their entry in this market

      Apple may get into streaming TV, but they won't be the ones dictating the terms. There will always be a demand for live TV (sporting events for example) and right now the current industry model is the only one that can provide that. There's no reason to let another player in if they are going to decrease profits of the existing players. If Apple wants in this sandbox, they're going to have to learn to play nice.
      mcksmith
      • We will wait and see

        Recent history shows, that Apple rarely attempt something (public), for which they are not very well prepared and considered all the consequences. If there is talk about Apple entering this industry, and talks about "resistance" from the established players, this most likely means that we will soon hear how "generous" Apple has been to "accept" their terms.
        danbi
      • They most certainly can.

        They may not be successful but if they can't dictate the terms the may just walk away. Of course the cellular carriers allowed Apple to come in as a new player and dictate the terms (at least AT&T) and look where we are now. I do agree though that there isn't really anything new they can bring to streaming, at least that we know of.
        non-biased
  • "Those who do not remember their past ...

    ??? are condemned to repeat their mistakes."
    "You can???t fault Apple for trying to upend the industry in the way it???s done before."
    Not only can you ??? but you should be determined to ensure you aren't twice bitten.

    An idiotic statement from Portnoy. If those in the media who know what happened take no action to prevent it recurring, then their readers too are likely to be condemned.

    ZDNET bloggers seem to be incredibly na??ve when it comes to corporate strategy. It's as if they want the WINTEL monopoly, Apple and media company strangleholds to be repeated. Losers!
    jacksonjohn
  • fegwere

    www. top4biz com www. top4biz com
    fsdgewrew
  • Loyalty in moneyland? Heh.

    I found this article thoroughly confusing. The terms "broadcasters," "Pay TV providers," and "media" are used almost interchangeably, in ways that leave a reader wondering who is doing what to whom.

    Suppose Apple wants to line up all the [u]Law and Order[/u] re-runs. Who can sell it to them? Cable providers? A broadcast network? Dick Wolf? There is always a way to disrupt a complex distribution scheme (which TV certainly is) by playing the existing forces against each other.
    Robert Hahn
    • But once again you have to look at

      how they would get the most money?

      Cable providers would certainly be a better bet for Law and Order reruns then iTunes or Apple, as with cable (satalite, ect) everyone with cable or satalite gets to see it, and advertisers get pay to get their ads in it.

      What could Apple offer? Only those with iTunes or an AppleTV?

      I'm sure complex distribution scheme is there because of the money involved.

      Why go with Apple and receive 30cents from those willing to purchase a download or do steaming?
      William Farrel