This past October, the fourth-gen Apple TV was released to largely positive reviews, this in spite of the fact that it shipped without an accompanying TV subscription service that some prematurely labeled a ‘cable killer.’
In the build-up to the Apple TV release, there were no shortage of rumors pointing to Apple rolling out a lightweight TV bundle in the $40/month range. This rumored subscription service, as envisioned by Apple, would have consisted of about 25-30 channels and was intended to position the Apple TV as a must-have and all-encompassing entertainment device for the living room.
But as things often go in tech, Apple’s plans were stifled due to economic considerations. Specifically, reports indicated that content providers were not happy with Apple’s proposed pricing scheme. On top of that, there were reports that Apple encountered problems over bundling issues.
“So while the price of the individual channels that Apple wants to package has been an issue,” Re/Code reported this past December, “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.”
Shedding more light on Apple’s negotiating woes, ESPN President John Skipper recently sat down with the Wall Street Journal where he discussed Apple’s efforts to get into the TV business alongside a number of other topics.
With respect to Apple, Skipper says that Apple remains frustrated by its inability to put together a viable TV subscription service.
WSJ: Does Apple have a path to being a player in the TV industry?
Mr. Skipper: They are creating a significantly advantageous operating system and a great television experience and that television experience is fabulous for sports. We are big proponents of believing it would be a fabulous place to sell some subscriptions. We have ongoing conversations. They have been frustrated by their ability to construct something which works for them with programmers. We continue to try to work with them.
Interestingly, Skipper attributed ESPN’s well-documented decline in subscribers to customers opting for skinnier bundles, which is exactly what Apple was hoping to introduce late last year.
“That impact hasn’t leaked into ad revenue, nor has it leaked into ratings,” Skipper made a point of noting. “The people who’ve traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV.”
Interestingly, ESPN was one of the channels that Apple reportedly had already convinced to be a part of Apple’s own skinny bundle which, for the time being, appears to be stuck on the shelf.