Apple TV ‘skinny’ bundle could accelerate cord cutting
The big TV premiere this fall could be the unbundling of TV.
Apple Inc. is in discussions with major TV programmers, including Fox, CBS and ABC, to create a “skinny” TV service for its Apple TV product and other Apple devices, according to people close to the companies who asked not to be identified.
The Cupertino, Calif.-based tech giant has long wanted to get into the business of television. However, its efforts have been rebuffed by broadcasters until now.
Apple is preparing to announce its new slenderized bundle of TV networks in June and have it ready to launch in September to coincide with the start of the fall TV season. The Wall Street Journal first reported the talks with programmers. NBC is said not to be involved in the talks.
Apple declined to comment both on the TV service and what’s in store for the Apple TV box.
The Apple TV package would consist of about 25 channels, cutting out those outskirt networks that traditionally bulk up cable TV bundles. Apple is most interested in doing a deal with the broadcast networks, such as Fox and ABC, and is interested in including sister cable channels such as FX and ESPN in its offering.
The service could offer frustrated pay TV customers a lower-cost option.
“I think we are going to see an increase in cord cutting, but it’s not going to be dramatic,” said James McQuivey, an analyst with Forrester Research. “Not yet. The main reason it won’t be dramatic is there is no way to cut the cord and still get everything you want. You can get some of what you want.”
Instead, some consumers might find that they are spending more than they currently are for the right mix of channels, he added.
Although Apple has had its eye on designing a digital subscription TV service for quite some time, the breakthrough appears to have happened in recent months and culminated with its landmark deal with HBO.
Apple last week announced that it has a deal to be the exclusive digital device partner for HBO’s stand-alone digital service, HBO Now, that will launch in April. The service will cost consumers $14.99 a month.
Last week, Apple Chief Executive Tim Cook hinted that Apple would become a bigger player in TV.
“We’re offering content from all leading content providers. Adding more and more each day,” Cook said during an Apple product conference.
A skinny package of channels for Apple TV could be a watershed moment for the television industry because of Apple’s prowess with consumer products.
“To be fair, no one has wanted to be part of the Apple TV deal until very recently,” McQuivey said. “Part of the reason why they are interested now is purely because of HBO.”
Rumblings of the skinny service had some analysts exalting the development.
So-called over-the-top services have been steadily gaining momentum during the last year in response to a growing consumer preference for different distribution options. Recent entrants in the over-the-top game include Dish Network’s Sling TV, which costs consumers $20 a month; CBS’ All Access, which costs $5.99 a month; and HBO Now.
Sony also is working on an Internet delivery option. Other tech giants have approached the broadcast networks about providing additional outlets, knowledgeable people said.
“We believe the current pay-TV model remains antiquated, expensive, over-bundled and in dire need of major changes,” wrote Cantor analyst Brian White. “In our view, Apple remains one of the few companies in the world that has the potential to transform the TV industry, and we believe consumers are ready for a change.”
Times staff writer Paresh Dave contributed to this report.
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