Apple’s Negotiating Tactics Could Be Holding Up Its TV Service
Apple might be getting in its own way in its pitch to operate a streaming TV service to combat traditional television services.
Apple has proven to be difficult in negotiations with television industry executives, making it impossible for the company to ink deals required to launch its long-rumored streaming-TV service, The Wall Street Journal is reporting, citing industry executives. In one instance, Apple senior vice president of Internet software and services Eddy Cue was said to have one response when negotiating with the industry: “We’re Apple.”
Indeed, Apple (AAPL) is painted in the Journal piece as being difficult to work with, reporting that Apple was seeking $10 per month per subscriber from cable providers to work alongside the likes of Comcast (CMCSA) to offer a TV service. The company was also said to have asked that all users to sign in with an Apple ID, the tool used by its customers to access Apple Music, iTunes, and much more. Former Time Warner Cable executives said that when Apple was pressed for how its TV service would work, Apple replied that its software would be “better than anything you’ve ever had.”
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Although Apple itself hasn’t discussed its negotiating style, the company has long been called aggressive in how it talks with companies across the media landscape. Those efforts have helped Apple attract a massive library of songs from the world’s largest record labels, and helped the company strike lucrative revenue-sharing deals with developers that sign on to its application stores.
But in the television industry, Apple appears to be having some difficulty.
In January, that was brought to light when John Skipper, president of sports network ESPN (DIS), said that Apple had grown “frustrated” in its negotiations with television providers. Skipper said that Apple has been having conversations about a streaming TV service, but those discussions had gone nowhere. He added that the frustration came from Apple’s seeming inability to strike a deal that would be amenable to both content providers and its own interests.
But it wasn’t supposed to be this difficult. For years, Apple had referred to its Apple TV streaming box as a “hobby” that allowed users to stream content from other providers. However, with the launch of a new Apple TV last year, complete with built-in apps and storage, the tech giant was rumored to have plans to launch a streaming TV service simultaneously. That service was expected to be able to provide customers with a monthly subscription to a wide range of channels, allowing them to skirt traditional cable and satellite offerings.
Ultimately, though, reports said that discussions had stalled, and Apple was forced to delay its launch.
Now, Apple could be changing its tactics. Rather than rely upon the television industry—which Apple reportedly believes is behind the times and should follow its lead instead—the company is getting into original content. Apple is already planning to shoot a reality show called Planet of the Apps that focuses on app developers, and recently acquired the rights to Carpool Karaoke, a popular skit on The Late Late Show with James Corden. According to the Journal’s sources, Apple is looking for other ways to expand its content.
Still, Apple isn’t giving up on the television industry. The report claims Cue, along with CEO Tim Cook, continue to have a keen interest in getting into the television business. It just so happens that, at least right now, the strategy that Apple had used in the past to ink lucrative deals with other struggling elements of show business might not be working as well as it had hoped.
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“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,” a senior TV executive told the Journal, referring to Apple.
Apple declined to comment on the Journal’s report.