Why Apple’s cable-killing TV subscription service fell apart

A TV subscription service was supposed to be the flagship feature on Apple’s fourth-gen Apple TV. Rumored to be in the works for quite some time, Apple was reportedly hoping to rollout a lightweight selection of about 25-30 channels and have it priced in the $40 range. The underlying goal, of course, was to generate an additional revenue stream while simultaneously taking advantage of the growing number of consumers opting to cut the cord.

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Unfortunately, the latest reports indicate that Apple’s TV plans are currently, and perhaps permanently, on hold. Following up on our report that CBS CEO Leslie Moonves had said that Apple’s interest in a cable-killing TV service had cooled, Bloomberg published a report indicating that pricing squabbles effectively killed the idea dead in its tracks.

Shedding even more light on the issue, a recent report from Re/Code relays that in addition to pricing issues, disagreements over the traditional channel bundles used in most cable packages also contributed to Apple walking away from the table.

So while the price of the individual channels that Apple wants to package has been an issue, it’s the composition of the package itself — which channels go in and which don’t make the cut — that is just as important to both Apple and the programmers, according to sources.

If Apple gets its way, it means the traditional pay TV package, which averages around 100 channels, will get shrunk by nearly 80 percent. And while TV executives will say 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.

Indeed, bundles are why the number of available channels on cable packages today check in by the hundreds. NBCUniversal, for instance, doesn’t just want to sell its content piecemeal, which is to say that if a cable provider wants to air programming from Bravo, NBCUniversal will also want them to pay for the right to air content from their other properties, a stable which include stations like USA and SyFy.

According to one TV executive briefed on Apple’s plans, Apple executive Eddy Cue is keen on releasing a service with no filler, which is to say that adding on a number of superfluous channels solely to placate content producers isn’t something we can expect to see anytime soon, or ever.