Apple is currently getting a quick and dirty lesson in how challenging hammering out TV contracts can be, according to a recent report in The Street.

The report specifically claims that Apple remains tangled up in negotiations with Disney regarding the number of Disney-owned TV stations which should be included in Apple’s rumored TV service. If you recall, Apple is reportedly aiming to launch a $30-$40/month TV streaming service sometime next fall with a somewhat lightweight selection of 25 or so stations. It’s expected that Apple will officially announce the service this June at WWDC.

DON’T MISS: Apple employee quits his job, spills dirt on ‘what really goes on’ there

As for the particular sticking points of the negotiations, The Street relays that Disney wants all of its channels included in Apple’s TV service, much to Apple’s chagrin.

According to people with knowledge of the talks, Disney is pressing Apple to take most if not all of its channels, which include several channel spinoffs of its mainstays ESPN and Disney Channel, while Apple wants to take fewer channels in a bid to keep the price down for its service, which is expected to be launched later this year.

“Disney has made it clear that it wants to drive the strongest deal it can get,” said one person with knowledge of the talks who is not authorized to speak about the negotiations. A Disney spokeswoman would not comment on the matter.

Apple’s negotiations with Disney highlight the typical complexity that accompanies TV deals. Because various media companies often hold many cable stations under one umbrella, TV stations are often sold to cable networks in bundles wherein the more popular stations help subsidize the costs of more niche stations. If Apple doesn’t want to play the bundle game, it may have to pay a bit of a premium for popular standalone channels.

At the same time, Apple will have to strike a delicate balance between monthly pricing and a sufficiently attractive offering of channels.

View Comments