Apple Inc. has suspended plans to offer a live Internet-based television service and is instead focusing on being a platform for media companies to sell directly to customers through its App Store, according to a person with knowledge of the matter.
While Apple isn’t giving up entirely on releasing a live-TV service, its plan to sell a package of 14 or so channels for $30 to $40 a month has run into resistance from media companies that want more money for their programming, said the person, who asked not to be named discussing a prospective product.
CBS Corp. Chief Executive Officer Les Moonves said at a conference earlier Tuesday that Apple had put its live TV plans “on hold.”
$100-and-up cable bills are common because of the industrywide practice of bundling. That is, in order to get the few channels you’d actually pay to buy, you also have to take a bunch of channels you’ll never watch. And the cable/satellite companies are smart — the bundles are tiered to entice customers into buying more bundles, ratcheting up monthly bills into the three-digit range.
Bundling is also what keeps extremely low-rated networks like MSNBC in business, because customers have to pay for the stuff they don’t want.
My wife and I are happy customers of the previous generations of Apple TV, almost exclusively for streaming content from our ample iTunes library. We’d love to cut the cord and eliminate our cable service altogether, and so the promise of a low-cost, streaming “slim bundle” of just the major networks was appealing.
But it looks like the networks aren’t — yet — willing to risk pissing off Comcast* or DirecTV, even with Apple’s huge cash pile and the company’s easy access to hundreds of millions of customer credit cards.
That really is a shame, because it’s difficult to imagine anything much sweeter than cutting your cable bill by 60% and sticking it to MSNBC at the same time.
*Comcast is the parent company of NBC which I’m sure has nothing at all to do with that network’s fierce resistance to unbundling. [/sarc]
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