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Apple TV Broadcaster Negotiations Going Poorly
Can Apple's Billions Bend the Stubborn Pay TV Sector?
by Karl Bode Friday 02-Mar-2012 tags: Video · competition · business · alternatives
We've noted repeatedly how it's somewhere close to impossible to develop a broadband-based video service that can seriously compete with cable, given the fact the broadcast and cable industry does everything in their power to see you fail. The end result have been things like Microsoft's Xbox 360 video offerings, which on the surface sound innovative, but suffer from paywalls and other restrictions all designed to protect legacy video profits.

Everyone seems to believe that Apple's new TV service is going to somehow be different, but despite (or perhaps because of) the company's golden child status, Apple's running into the exact same problem as they try to negotiate with broadcasters. Apple already had to shelve a subscription TV service because broadcasters wouldn't budge, and it appears they're having the same problem as they prepare to launch Apple TV:

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While Apple harbors big TV ambitions, it’s having a tough time getting media companies to play along. Apple is pushing ahead with plans to launch a streaming TV service by Christmas — despite making little headway in its negotiations with content providers, The Post has learned. For months, Apple’s point man, Eddie Cue, has been leading talks with content providers, which have largely balked at the tech giant’s efforts to exert control over all aspects of the video service, including pricing, sources said.

Right now, broadcasters are angry and claim Apple "wants everything for nothing" and is being kind of a bully (amusing, coming from retrans-blackout-happy broadcasters) in negotiations as they try to develop a disruptive product. Broadcast and cable execs traditionally won't budge on any service that can challenge cable, but everyone knows Apple has $100 billion in cash just burning a hole in their pocket. It should be interesting to see just how far that cash will get the cable and broadcast industry to bend.

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spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1

Not gonna happen

Looks like the TV Broadcasters aren't willing to stand in line to drink the iKoolaid!
--
The weekend is here, grab a can of beer!
pandora
Premium
join:2001-06-01
Outland
kudos:1

Re: Not gonna happen

IIRC Apple is sitting on 100 billion in cash +-. Couldn't they buy a few content providers outright?

tc1uscg

join:2005-03-09
Saint Clair Shores, MI

Re: Not gonna happen

said by pandora:

IIRC Apple is sitting on 100 billion in cash +-. Couldn't they buy a few content providers outright?

Or just establish their own. They seem to be infamious for that. Look what they did to the MP3 player industry. Not that they had aproduct that played music any better, they just passed around the iKoolaid and waited. Why not now?

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5
said by spewak:

Looks like the TV Broadcasters aren't willing to stand in line to drink the iKoolaid!

Doing a deal with Apple is like selling your soul to the devil.

And this really is the problem:
quote:
content providers, which have largely balked at the tech giant’s efforts to exert control over all aspects of the video service, including pricing, sources said.
The cell carriers got horrible deals from Apple, which takes a huge % of the profits, leaving carriers like Sprint going broke on the deal. Is it any wonder the content providers don't want to deal with them.
--
The nine most terrifying words in the English language are, I'm from the government and I'm here to help.
»www.politico.com/2012-election/

25139889

join:2011-10-25
Toledo, OH

Re: Not gonna happen

and that's the key point. it's not about Cable providers its about Apple being greedy.
Chuck_IV

join:2003-11-18
New Milford, CT

I still think...

Sony will have the best chance at breaking through with this type of thing on their streamers because Sony actually owns/controls a lot of content.

It will just be a matter of if they want to risk PO the providers.

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY

Scared to death

The TV people are afraid of getting iTuned. These people are so afraid of loosing any control over their content they will loose money before that happens.

Sofa King
Premium
join:2009-03-01
21435

"Apple wants everything for nothing"

Whether we like it or not, content owners want to get paid. Apple wants all the profits. If Apple wants to get into the video business they need to play by the same rules as their competitors... Lot's of lessons learned from iTunes.

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

Re: "Apple wants everything for nothing"

Of course.

People who don't work in the industry ignore this. Producing content is not cheap and it's not easy.

inteller
Sociopaths always win.

join:2003-12-08
Tulsa, OK
Reviews:
·Cingular Wireless

Re: "Apple wants everything for nothing"

really? a dozen different shows of loser idiots singing to win some dubious song contract is hard to produce? getting a bunch of fat losers together and making them cry while they lose weight is not cheap?
--
"WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"

elwoodblues
Elwood Blues
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join:2006-08-30
HarperLand
Reviews:
·Cybersurf Intern..

Re: "Apple wants everything for nothing"

said by inteller:

really? a dozen different shows of loser idiots singing to win some dubious song contract is hard to produce? getting a bunch of fat losers together and making them cry while they lose weight is not cheap?

But when you pay some the hosts outrageous amounts of money (I'm hearing Tyler gets $50m/yr) yea it does.
--
No, I didn't. Honest... I ran out of gas. I... I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from out of town. Someone stole my car. There was an earthquake.......
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: "Apple wants everything for nothing"

Correct... and that's their problem.. they're paying someone way too much money to talk on camera. Like anything on the open market, they could invest into people, train them, groom them, and do it at a whole lot less than they are now..

.. .oh wait, unions.. damn me!

They pay actors and personalities WAY too damn much for what they do.

mech1164
I'll Be Back

join:2001-11-19
Lodi, NJ
said by fifty nine:

Of course.

People who don't work in the industry ignore this. Producing content is not cheap and it's not easy.

Suuurrreee
We are talking about HOLLYWOOD here. The land where to make a film is say 20 mil and it makes 140 mil nationally. Then through the mechanism of creative financing. Not only is it a loss it can be worse then what they took in.

Also what Apple is trying to do runs counter to what the Content creators what from lemming err consumers. PAY PAY PAY again and again. Instead of trying to lower the price and make it easily available they want to restrict it and make it artificially high. Forcing people to look for less legal means for it.

What will be fun is when Apple gets tough and instead of going through the content creators. Uses that 100 bil on getting some laws changed. Heck if the MPAA can get laws written so can Apple.

Any way the fireworks are going to be fun.

Sofa King
Premium
join:2009-03-01
21435

Re: "Apple wants everything for nothing"

said by mech1164:

What will be fun is when Apple gets tough and instead of going through the content creators. Uses that 100 bil on getting some laws changed. Heck if the MPAA can get laws written so can Apple.

Any way the fireworks are going to be fun.

What is Apple's leverage here and why should they get any special treatment over other distribution methods? Again, these are uneducated and naive statements around a much more complex industry.

Do I think content providers over charge? Yes. So does my cell phone, cable, gas bill, etc. But I don't see why Apple should get any special privileges to join into this game. It reminds me of Verizon saying they should get special privileges from cities and towns for video.

Apple is a 1/2 TRILLION dollar company! They are the poster child for over priced and proprietary products. No special privileges for Apple.
25139889

join:2011-10-25
Toledo, OH
laws are in place to protect the content that is produced and OWNED by the companies that made it. NOT for companies like Apple with their iCrap products to come along and basically rob and bully the people they want products from.

No laws are going to protect Apple from this. And if Apple wants laws passed to get what they want; they better be writing a few checks to China since they decided they were going to steal the iPad brand and now are facing an export/import ban on that.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: "Apple wants everything for nothing"

said by 25139889:

laws are in place to protect the content that is produced and OWNED by the companies that made it. NOT for companies like Apple with their iCrap products to come along and basically rob and bully the people they want products from.

No laws are going to protect Apple from this. And if Apple wants laws passed to get what they want; they better be writing a few checks to China since they decided they were going to steal the iPad brand and now are facing an export/import ban on that.

Try pulling your personal bias out of your posts - they do you no good. You give apple WAY too much credit and not enough to, well, everyone else. Comcast has the largest OnDemand library because they used their size to bully content providers.. in the end Comcast got what they wanted and the broadcasters benefited from the enhanced exposure. Sometimes you have to drag idiots kicking and streaming into reality.

By the way.. jealous much? iCrap products make more in one hour than you will your entire life. Oh, and nice dig on apple and the China iPad issue.. It wasn't a "brand", Mr. Ill-Informed... it was simply the right to use a "name"... or "term" for something. Get it right.

pjcamp

@comcastbusiness.net

Apple arrogance collides with Hollywood arrogance?

This will not turn out well.

inteller
Sociopaths always win.

join:2003-12-08
Tulsa, OK

a possibility

I see Apple buying a studio or two and sending all that content straight to iDevices.
--
"WHEN THE LAUGH TRACK STARTS THEN THE FUN STARTS!"
25139889

join:2011-10-25
Toledo, OH

Re: a possibility

won't happen. Those studios are owned by someone else that won't give up that $$$ coming in.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: a possibility

said by 25139889:

won't happen. Those studios are owned by someone else that won't give up that $$$ coming in.

My god would you ever stop? ... you clearly don't know how the corporate world works... at all... DO YOU?!

You'd be best served if you asked more questions and made less absolute statements like you're an authority on subjects where you clearly have no clue.

Corporations can be bought and sold on strategy and positioning alone.. If it was simply all about money then we'd not be in the spot we are in the global financial world that we are today. Strategy and positioning is they key.. not always $$$.

Comcast had plenty of money to buy Mickey Mouse.. in the end they lost out.

saronian

join:1999-09-07
Oakland, CA
Reviews:
·SONIC.NET
·AT&T U-Verse

Apple's Innovation Has Much To Offer

The best approach I've heard is to turn each TV show into an app and let the consumer decide where to spend their money. Networks hate this because it gives producers a shot at direct distribution.

Either way the consumer benefits and Apple has to compete by offering a better experience through their hardware/software combo.
elray

join:2000-12-16
Santa Monica, CA

Re: Apple's Innovation Has Much To Offer

said by saronian:

The best approach I've heard is to turn each TV show into an app and let the consumer decide where to spend their money. Networks hate this because it gives producers a shot at direct distribution.

Either way the consumer benefits and Apple has to compete by offering a better experience through their hardware/software combo.

Apple brings no "innovation".
Just brute force, big bucks, market-shaping and pricing power, and legions of loyal sheep willing to pay substantial premiums for i-brands - the sum of which might be enough to lure *some* content owners, but not all.

Innovation would mean fixing the middle-mile and last-mile delivery issues for 2K streams.
TheGuvnor9

join:2006-06-23
Beverly Hills, CA

Re: Apple's Innovation Has Much To Offer

You wouldn't call iTunes innovative?
elray

join:2000-12-16
Santa Monica, CA

Re: Apple's Innovation Has Much To Offer

iTunes was innovative, and only in the regard that Jobs pulled off the deal-of-the-century.

That was a while ago.

As a distribution/sales and licensing engine, iTunes always had issues.

iamwhatiam

@verizon.net

Thus said Apple to the NAB...

"Help me help YOU!"

BF69
Premium
join:2004-07-28
Camden, TN

hollywood hates money?

Apple has $100 bil to spend if they choose to spend it Hollywood has to listen. Heck US box office only took in $10 bil gross. Which means maybe $2 bil in profit, but they are going to turn down billions from Apple? Stupid is as stupid does.
jfmezei
Premium
join:2007-01-03
Pointe-Claire, QC
kudos:22

Re: hollywood hates money?

That 100 billion belongs to me (as an AAPL shareholder). I don't want Apple to donate my money to Hollywood

But if Apple wants to use some of that money to buy Disney, and the return on investment for Disney is higher than having 100 billion sitting at the bank, then go for it.

From a regulatory point of view, Apple might have enough cash to buy all of hollywood, but the government wouldn't allow that. Something about monopoly and anti trust laws.

Buying cable companies might be another way to get the job done.

But it is becoming apparent that Apple TV isn't going to happen this year.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: hollywood hates money?

Corporations have a responsibility to do what's in the best interest of the corporation and to make the most profit for it's shareholders.

And you're right, APPLE can't ever buy all of Hollywood.. that would never happen.. but you cut an apple into a bunch of smaller pieces and call them all something else, it's amazing what you can do.

The corporate world has been very clever and doing what ever it really wants underneath the noses of everyone, including the government. Just look at the banking industry over the last 100 years to understand that one.

BF69
Premium
join:2004-07-28
Camden, TN
said by jfmezei:

That 100 billion belongs to me (as an AAPL shareholder). I don't want Apple to donate my money to Hollywood

So Apple spend says $5 billion a year to acquire content for their subscription service which they charge say $20 a month and they get say 30 million subscribers. That $7.2 billion year on a $5 billion investment. You are against that?
25139889

join:2011-10-25
Toledo, OH
it's not about Hollywood hating money. It's about Apple wanting everything for FREE.

Shazzbot

@charter.com

One thing not being mentioned...

Steve Jobs' widow is now the #1 individual owner of Disney stock. Disney itself is now effectively run by the Pixar guys who were "raised" by Jobs.

Disney owns ABC and ESPN. The ABC suits balking at cutting a deal with Apple could be overruled by Disney at the stroke of a pen. ABC doesn't mean all that much in the big picture, but ESPN is the cornerstone of cable and satellite TV packages (yes, even if you don't watch them).
25139889

join:2011-10-25
Toledo, OH

Re: One thing not being mentioned...

Disney-ABC run by Pixar? LOL proof?

and as ar as Jobs' widow being the #1 individual owner- you must not have seen the news where Jobs' was/is being investigated for drug selling,etc? Was a CNN story about 3 weeks ago. Made MSNBC and other news as well- except blogs that LOVE Apple.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: One thing not being mentioned...

So? what does Jobs and Drugs have to do with anything here? .. it's clear you hate everything apple.. give it up.

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