Apple’s negotiating techniques holding up Apple TV streaming service

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Date: Friday, July 29th, 2016, 08:44
Category: Apple TV, News, TvOS


Apple knows exactly what it wants in terms of negotiations.

And it might just be getting in the way in terms of setting up an Apple TV streaming service.

The company’s “assertive” negotiation tactics have apparently made it difficult to establish and lock deals with various cable providers and networks.

Apple started talking with the Walt Disney Company in early 2015 about getting Disney-owned content onto its then-planned streaming television service, but Apple executives, iTunes chief Eddy Cue in particular, made demands networks were not prepared to meet.

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, in return, balked and similar talked with networks such as 21st Century Fox and CBS have also stalled in the same way.

Apple sees TV as a way to push further product growth, but persuasion tactics that have worked in the mobile phone and music industries aren’t working in the television industry. Content providers are reluctant to agree to Apple’s terms because it would compromise traditional revenue streams. It’s been noted that inking a “sweetheart” deal with Apple could lead to traditional cable distributors demanding similar deals.

Over the last several years, Apple has made several attempts to enter the television market, seeking deals with Time Warner, Comcast, and other providers, but nothing has panned out. In one instance, Apple wanted full on-demand seasons of hit shows and a recording feature that would include ad-skipping in newly aired shows, something cable executives were surprised by.

Apple initially sought payments of $10/month per subscribe from cable providers and refused to rule out pursuing an even higher share of monthly subscriptions in the future. It also wanted users to sign in with Apple IDs, even though Comcast and Time Warner Cable would handle billing and customer service.

Up until last year, Apple was still in talks for a streaming television service that would bundle several popular live channels and on-demand television at a price point of approximately $30 per month, but Apple reportedly put the project on hold after being unable to establish the necessary deals because content providers were reluctant to unbundle their channels. Cue, who leads most of the deals, is known for his “hard-nosed” negotiating style and refuses to settle for less than what Apple wants.

The company has apparently shifted towards positioning its Apple TV set top box and tvOS App Store as its own platform with which networks can share their own original content.

As always, stay tuned for additional details as they become available.

Via MacRumors and The Wall Street Journal

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