Bloomberg reports that Apple’s negotiations with televisions networks have stalled, making them unable to debut their much-rumored streaming television package until 2016. Apple had hoped to have the service ready for a September 9 debut, alongside a revamped Apple TV set-top box.
Talks to license programming from TV networks such as those owned by CBS Corp. and 21st Century Fox Inc. are progressing slowly, some of the people said. Apple also doesn’t have the computer network capacity in place to ensure a good viewing experience, said some of the people, who asked not to be identified because the talks are private.
Pricing of the new service is said to be one of the main stumbling blocks in negotiations, as Bloomberg reports Apple wants to offer a package of popular channels for $40 per month, which is around half of the what the average cable television subscriber pays.
However, TV content providers are expecting to receive more money from Internet television services like Apple’s, as they are new to the market and are looking to gain a toe hold. Talks with networks, including Fox, CBS, and NBC have been mired down for several months, reports Bloomberg’s sources.
In addition to bogged down content negotiations, the report indicates Apple has encountered problems in creating a network with enough capacity to ensure an excellent viewing experience. The company is said to be working on storing popular shows close to viewers homes, so the content doesn’t have to be streamed directly from one of Apple’s data centers in California, Nevada, North Carolina and Oregon.
“Apple could send every bit from one central point, but the bandwidth costs would be exorbitant,” said Nick Del Deo, an analyst at Moffettnathanson LLC. “Plus, the service would be terrible.”
While Apple has in the past relied on Akamai Technologies Inc., which runs a “content distribution network” of 170,000 servers, to speed the delivery of content such as music, movies and apps, it has recently been working on increasing its own capacity, but doesn’t have enough as yet to support a major TV service rollout.