Higher-than-expected licensing costs for programming appears to be the glitch that is putting Apple's planned service on hold.
Apple is apparently suspending its efforts
to start its own Internet-based television streaming service after the company ran into friction over affordable licensing arrangements with media companies for their content.
Instead, Apple will now focus on selling TV programming content for the same media companies to customers through Apple's own App Store, rather than as a standalone new service, according to a Dec. 8 story by Bloomberg
"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," a person with knowledge of the situation told Bloomberg
CBS Corp. CEO Les Moonves also confirmed on Dec. 8 that Apple put the plans on hold, according to the story, though Moonves added that he expects the company will eventually offer a bundle of channels as part of some kind of service.
Apple was expected to announce its then-rumored live streaming TV service back in September at its product announcement event in San Francisco, but the plans were scrapped, according to an earlier eWEEK
In August, those plans were delayed because the complex contractual arrangements with the media companies were taking longer than expected. The slated service was then pushed to a start sometime in 2016.
But that is now not happening due to the continuing logjam over how much money the media companies want for their content and how much Apple wants to pay so it can keep its prices affordable for consumers. Apple's challenge is keeping its rates lower than traditional cable companies so consumers get what they want from Apple instead of from cable companies.
Apple reportedly has been trying to price its offering at about $40 a month compared to higher rates from cable providers.
Plans for the Apple streaming TV service began to circulate in March, starting with about 25 channels of content that would be viewable on the company's computers, smartphones and Apple TV set-top boxes. The service hoped to include programming from ABC, CBS, Fox and other networks, according to an earlier eWEEK
report. Apple had been talking to Walt Disney Co., CBS, 21st Century Fox and others to assemble less-expensive TV bundles that include channels like CBS, ESPN and FX, while leaving out many of the smaller networks that are included in typical standard cable TV packages.
In March, Apple announced the expansion of its existing channels on its Apple TV set-top box with the creation of the new HBO NOW service in collaboration with HBO. The channel is available on Apple TV in the United States for $15 per month, without a cable or satellite subscription.
The new version of the company's Apple TV set-top box, which was announced in September and began shipping in October, includes an improved remote, Siri integration, new capabilities for Apple Music, a new operating system, improved gaming and multiplayer options, and more. Apple TV also now includes a 64-bit A8 processor and fast 802.11ac WiFi and comes in two versions—a 32GB model for $149 and a 64GB model for $199. The earlier Apple TV version continues to be sold for $69.