Apple has suspended an initiative to bring a live television service to its AppleTV device, frustrating hopes that users could soon forego basic cable for an Apple-sponsored bundle.
Instead, Apple has decided to double down on its App Store where media companies can develop their own apps to market directly to customers. The move comes after negotiations with major networks stalled due to Apple’s intention to offer its 14 or so channels at about $30 to $40 a month. At that price, networks felt they weren’t getting enough for their programming, according to Bloomberg.
Current cable bundles for a similar number of channels cost about $85 a month, and Apple would need to either raise its price or convince media companies to accept lower fees to make its live-TV service work. Apple hasn’t given up on the effort all together, but it looks like customers’ hopes for a 2016 launch isn’t going to happen.
“We ultimately believe Cook & Co. need to offer content and eventually go down the streaming-TV/cord-cutting path given the changing dynamics in the consumer media landscape,” Daniel Ives, an analyst with FBR & Co., wrote in a note.
In 2015, Apple has launched a streaming music service as well as a brand new Apple TV with enhanced functionality. With those two elements already under its belt, Apple was set “to ink its streaming TV deals heading into 2016,” Ives said.
Apple effectively worked with music executives to get its streaming music service off the ground, but pushback from media networks has been much more fraught. In some cases, media executives want upstarts like Apple and Amazon to pay more than current distributors, according to Bloomberg. That’s left negotiations in a tough spot, though at least some leaders know that the service will inevitably launch.
“This will happen,” CBS CEO Les Moonves, said at Business Insider’s Ignite Conference Tuesday. “People will not be spending money on channels they don’t want to watch.”
Moonves had said back in May that CBS would likely join Apple’s service, but money would be a central part of the decision.