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Apple’s Negotiations With TV Providers Stalled Due to 'Hard-Nosed' Tactics

A new report also says Apple is planning a push into content creation
Connected Theater
July 28, 2016

Don’t expect to see a streaming TV service from Apple anytime soon. According to a new report from The Wall Street Journal, Apple’s tough negotiation tactics turned off a number of media companies – even including longtime ally Disney.

Upending the industry

Upending the industry
Apple was reportedly trying to create its own streaming service for the new Apple TV.

Apple was reportedly trying to create its own streaming service for the new Apple TV.

In particular, Disney was apparently ready and willing to deal with Apple until they heard the terms. Here’s more from the report:

Disney, which owns channels such as ESPN and ABC, was stunned, though, when Apple executive Eddy Cue made demands that would have upended decades of cable-industry and Hollywood practices, people familiar with the discussions say.

In particular, Apple wanted to freeze for several years the monthly rate per viewer it would pay to license Disney channels. TV channels usually get annual rate increases and rely on them to fuel profit growth.

Disney balked. Similar talks with media giants that included 21st Century Fox Inc. and CBS Corp. also stalled. When Apple debuted its newest Apple TV set-top box last September, it announced no streaming TV service.

Some TV providers worried that agreeing to Apple’s terms would cause problems in other areas:

Media companies worry that agreeing to Apple’s sweetheart terms could allow traditional cable-TV distributors to demand the same deal and make it harder to recoup their investments in original shows.

“We’re challenged in a lot of ways, but we’re not waiting for this white knight to come racing in the way music was,” one senior TV executive says.

'We're Apple'

'We're Apple'

To make up for the lack of a streaming service, Apple is revamping its approach to include some original programming.

Earlier this week, Apple announced the surprise purchase of the unscripted TV show, “Carpool Karaoke.” The series, based on a segment from CBS’s “The Late Late Show with James Corden,” will appear first on Apple Music. Sixteen episodes will be made available exclusively to Apple Music subscribers.

Apple is also planning a reality show about app creation, “Planet of the Apps,” and a drama series starring Dr Dre.

The entire story is definitely worth a read, and at least according sources, Cue and Apple believe the media companies will eventually comes around:

One cable-industry executive sums up Mr. Cue’s strategy as saying: “We’re Apple.”