Apple’s forceful negotiating tactics have long served the company well. The Cupertino firm has long been known as a tough negotiator whe it comes to keeping supplier costs down. However, those same “hard-nosed” tactics aren’t proving to return the same results when it comes to negotiating deals with television networks and cable providers.
According to The Wall Street Journal, Apple started talking with the Walt Disney Company in early 2015 about getting Disney-owned content onto its then-planned streaming television service, but Apple executives, iTunes chief Eddy Cue in particular, made demands networks were not prepared to meet.
Apple wanted to freeze the monthly rate per viewer it would pay to license Disney channels for a period of several years. Content providers such as Disney usually get annual rate increases from cable and satellite companies, depending on those increases to fuel yearly profit growth. Disney refused. Talks with 21st Century Fox and CBS resulted in similar stalemates.
While Apple’s tactics have served them well in negotiations with suppliers, as well as music labels, television providers are reluctant to make such sweetheart deals due to fears it would compromise the more traditional deals they have in place with cable companies. If they give in to Apple, their other distributors will want to know, “Why not us?”
This Isn’t the First Time Apple has Failed to Make a Deal
Apple has made previous moves to enter the television market, attempting deals with Time Warner, Comcast, and others, but nothing has come of the talks. The companies were reportedly taken aback by such Apple demands as a $10 per month per subscriber payment to Apple, on-demand streaming of seasons of hit shows, ad skipping in newly aired shows, and more.
Apple was reportedly still in talks as late as last year to create a streaming television service that would cost somewhere around $30 a month. The subscription would have bundled a number of popular networks, but the project is reportedly on hold, due to Apple’s inability to make deals where content providers would be forced to unbundle their channels, a condition on which Apple nor the providers would give an inch on.
Apple Concentrates on the Apple TV
For now, Apple is concentrating on making its Apple TV and its accompanying tvOS App Store an attractive platform for content providers to use to share their content via apps. Apple is also slowly developing its own custom content, including a new reality series that will feature app developers, called “Planet of the Apps,” as well as grabbing the rights to a new show that is a spin-off of the popular “Carpool Karaoke” segment of the “Late Late Show” with James Corden.
It’s anyones guess as to which side will blink first in Apple’s prolonged staring contest with the television industry, although suppliers and record executives can testify to just how long Apple can hold out to get what they want.