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Parsing the latest rumor about Apple’s TV plans

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In a story published Thursday, the New York Post has what appears to be new evidence that Apple(s AAPL) “plans to launch a streaming TV service by Christmas.” At first glance, it’s a pretty compelling and sensational story… But take a closer look at what the article is actually reporting, and it doesn’t seem like Apple is creating its own bundle of video channels at all.

Here are the pertinent details, as the Post lays them out:

  • Apple is pitching the idea of offering channels as apps for its devices, including its Apple TV set-top box.
  • It’s unclear whether it would group the apps together and charge a fee — similar to a cable TV subscription — or offer the channels on an a-la-carte basis.
  • Apple has tried to get cable operators to work with it to improve the accessibility and look of video services and in the process dump their clunky cable boxes in favor of sleek Apple devices.
  • Apple hasn’t given up, however, and is said to be pursuing deals with telecom companies such as Verizon(s VZW) and AT&T(s T). It hopes to get traction with a single player in hopes of pulling the rest of them along.

Frankly, I don’t know who the Post‘s sources are, but putting aside the sensationalist lead paragraphs, and based solely on the supporting evidence provided by the story, Apple doesn’t seem to be building out a streaming service. What it sounds like to me is that Apple’s Eddie Cue has been meeting with executives from content owners and distributors — the networks and the cable and IPTV companies — and trying to get them to build apps for the next generation of its Apple TV products.

Even look at some of the supporting quotes from media executives in the New York Post story:

  • “They want everything for nothing,” said [one] media executive.
  • “They want to create the interface, and they wanted to work with the cable guys to manage bandwidth across the TV and broadband pipeline,” said [another] source familiar with the talks.

If that’s the case, Apple’s plans for TV services seem to be not all that different from how it has partnered with content owners for the iPad or other mobile devices built on iOS. It wants content providers to create apps for its platform — for free — with it controlling the interface and how users access and navigate the content.

All of this has been reported to different degrees in the past, including stories in Bloomberg and The Globe and Mail in which Apple has been in discussions with operators about partnering to bring their live and on-demand TV services onto its video platform. (I wrote about why Apple would and should partner with carriers in this post.)

The key bit of tension here appears to be that the networks and distributors expect Apple to license their content for a new range of TV devices. They don’t want to build free apps that would just help Apple sell devices without getting paid for them, believing that those apps could potentially cannibalize their broadcast and cable TV audiences. And they’re also probably not very keen on Apple’s “apps as channels” plan, in which they would lose control over how their content is browsed or navigated, and how it would likely be displayed on the TV alongside apps from streaming video services like Netflix(s NFLX).

But all of that is a whole different story from what the Post and others imply when they say Apple is “pushing ahead” with its video ambitions. There’s no real supporting evidence in the article to suggest that Apple is looking to build a bundled streaming service of its own, just that it’s trying to corral content owners and distributors into making their content available as apps for a new group of TV devices.

8 Responses to “Parsing the latest rumor about Apple’s TV plans”

  1. Steve Jobs was the master of getting people into positions where they had to give him what he wanted. It will be interesting to see if Apple can pull this off without Steve’s manipulative skills.

  2. I can’t see any reason Apple need to step in content bundle for tv content. Tv channel are indeed bundle by themselves, they are different from music and movies which all sell item by item. You seldom recall the studio behind the movie, but you can always tell what’s inside NatGeo, SciFi, Animal kingdom, Disney channel….all are clearly branded.

    That’s the ecosystem in tv, apple has no point to step in that. Rather they can work with them. The enemy of apple is always the distributor guy, not the content bundle guy.

  3. Why partner? If its a winner for the public, Apple could just buy one of the smaller cable companies and turn it into a major threat to the big players and a growth opportunity for itself.

  4. James GordonGekko Gillmore

    a lot of the apps networks and TV shows are releasing for the iPad already would make great iTV apps. Conan has a great app that syncs with your television based on the audio coming out of your TV, and upsells related sketches to the current one playing on both your iPad and TV.

    Basically any iPad apps that are airing live stuff in sync with what’s scheduled on TV would make a perfect iTV app.

    Content providers, channels, etc, may have already screwed themselves by giving away too much on the iPad. That at least is an easy backdoor way for this to go downtown and for Apple to have the last laugh.

  5. I find it compelling that even Apple is trying to figure out how to create the way overdue A la Carte TV content model. \

    I am endlessly amazed at the idiots that create content still trying to tie things to supply amd demand (which is obsolete,) and blow off massive new market opportunities with more flexible delivery models!

  6. Is it possible they buy/parnter with a smaller cable company (i.e. RCN, Insight, Brightouse)and then offer their TV everywhere bundle through Apple hardware nationally? I thought I remember reading that the MSO’s were going to start competing in each other’s regions. Just a thought, may be impossible.