With a revamped Apple TV just around the corner, Apple is laying the groundwork for what may soon be a wildly successful TV streaming business.
With streaming services like Netflix and HBO Now more popular than ever, the writing on the wall is clear: consumers, on the whole, just aren’t as interested in paying $100 a month for 150 channels. Instead, they’re much happier getting less and paying less.
With that in mind, Apple’s rumored TV subscription service may truly be a market disruptor. Not to mention, it would certainly fit Apple’s time-tested m.o of coming to the party late yet still being able to turn an industry on its head.
Only thing is, Apple’s TV subscription service necessitates that Apple strike deals with a whole host of content providers and price has reportedly remained a sticking point during negotiations.
Writing for The Information, Jessica Lessin relays that Apple is hoping to charge consumers $40/month for a lightweight selection of about 25-30 channels. While certainly cheap from a consumer perspective where cable bills can easily and quickly soar into the triple digits, some content providers believe that the figure is far too low.
“There’s still a big gap between the price media companies want for their TV channels and the roughly $40 a month Apple wants to charge consumers,” Lessin writes. “Something has to give.”
Incidentally, some of the earlier reports surrounding Apple’s planned TV service hinted that Tim Cook and co. were trying to secure a monthly pricepoint as low as $30.
With Apple’s highly-anticipated TV subscription service reportedly delayed until 2016, you can bet that Eddy Cue and his team at Apple are working furiously behind the scenes to get all of the required contracts signed and dotted. The only question is: who’s gonna blink first?
While some might reasonably claim that Apple finds itself in a weak negotiating position, the ever increasing number of cord cutters suggests that Apple might actually be negotiating from a position of strength. Especially with cord cutting becoming more and more popular, the idea of a recurring revenue stream from a potentially gigantic pool of users (anyone with an Internet connection, really), content providers may find that jumping into bed with Apple may simply be too good of an opportunity to pass up.
While we’re not exactly sure which content providers in particular are demanding a bigger cut, some of the cable channels already on board reportedly include ESPN and FX. Though it’s possible that the dynamics have changed, a report from this past March relayed that Apple was running into trouble trying to secure content deals with NBCUniversal, a Comcast subsidiary that owns quite a few popular cable channels, including USA, E!, and Bravo.