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Apple Inc. (AAPL) Hasn’t Closed Its TV Deal, but It’s Getting There

Apple inc (NASDAQ:AAPL) Apple TV

Apple Inc. is putting together a TV service to rival cable firms. It’s an open secret in the media industry, though Apple has stayed quiet about the whole thing so far. A new report shows that the firm still hasn’t closed the key content deals it needs to have in place in order to launch the product.

Apple inc (NASDAQ:AAPL)

A report published in the New York Post this morning, which cites people close to the deal as sources, says that Apple is making progress in clearing up the complex rights issues around getting the content it needs for its service. At the heart of the matter is the affiliate model that local TV in the US is based on.

Apple forces networks to get rights

Apple wouldn’t be allowed to show local programming from stations affiliated with networks like CBS Corporation or ABC because the networks don’t own that local content. Apple clearly wishes to have that content on its platform, because people in the US still watch a lot of local TV.

  

Tim Cook and his team didn’t want to negotiate with stations all over the country in order to obtain those rights, however, so it told the networks to do that for them.

This morning the New York Post says that the process is working out. One source told the outlet that Fox “has the ability to negotiate with Apple [for affiliates], or it will have it very soon.” Other networks are also getting into a position where they will be able to open talks on behalf of their affiliates.

That will only begin the ability to open up talks, however, and Apple clearly wants to have as full a product as possible when it puts the Apple TV service out there. No firm has ever tried to beat cable in the way Apple is doing so, and the firm’s efforts could be stymied if perceptions of the service on release peg it as “worse than Netflix,” when that’s not what the firm is trying to offer.

Andy Hargreaves of Pacific Crest, like so many more Wall Street voices, can’t wait to see what Apple does with its TV release. He said, in a May report on Apple’s presumed service, that Apple would not release a “skinny bundle.” Instead the firm is going to aim to replace cable TV more fully in order to deliver a premium version of what Netflix and others currently offer.

That means including network TV and local TV in a package that can also get Netflix and HBO Go. As other content makers move to streaming, Apple is sure to get them onto the platform. Mr. Hargreaves reckons the package will carry a premium price tag, likely less than cable but not comparable to Netflix pricing.

Apple TV still months away

Content talks have proved hard for Apple, and the release date for the Apple TV is soft. The firm was initially thought to be planning on a June release, to coincide with WWDC 2015, but those talks undermined the firm’s ability to launch during the Summer.

Now it’s not clear when Apple will put the TV service out there. Apple’s leaders still have a lot of ground to cover in content talks in order to ensure that the service they launch is as good as it can be. That means that launch is likely months away.

It may coincide with the release of the next iPhone on September 18, or it might not arrive before the end of the year. With talks still going on, the latter seems more likely than the former, but Apple has surprised on release dates in the past, and may do the same with the Apple TV.

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