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Apple reportedly blows off cable companies, talks directly with HBO, ESPN for iTV service

August 22nd, 2013 at 12:00 PM
Apple iTV HBO ESPN Viacom Negotiations

Apple has apparently grown tired of playing nice with the incumbent cable providers. Unnamed sources tell Quartz that the company has started employing “a new strategy of talking directly to content providers” for a long-discussed Internet television service after “years of halting negotiations with cable companies haven’t gotten Apple much closer to its grand vision for television.” Quartz says that Apple is now in talks with HBO, ESPN and Viacom to bring content to a future online television platform that would presumably compete with incumbent cable providers.

Specifically, Quartz’s sources claim that “Apple’s strategy could include forming its own pay TV service, essentially becoming a cable company itself, except with content delivered entirely over the internet,” similar to what Google and Intel have been trying to do. No agreement appears imminent, however, and Quartz says that right now talks are going on between content providers and multiple tech companies for potential Internet television services.

That Apple is reportedly talking with content providers directly is big news because the company has until now employed a strategy of working closely with the incumbent cable companies on its streaming service. But with Google and Intel working to cut out the middle man, it seems that Apple has decided to take a similar approach.

What will be interesting to watch is whether Apple, Google and Intel will pay higher premiums for the rights to distribute content than what cable companies now pay or whether they’ll pay regular rates for streaming rights while accepting the same types of content bundles that consumers have grown increasingly tired of over the years. Either way, the entrance of all three companies into the pay TV market would certainly be very disruptive to the incumbent cable companies.

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