AppleApple is reportedly looking into getting into the TV business in a big way.
According to The Street, Apple is looking to make deals with TV producers and Hollywood studios in order to bring exclusive content for a “cable-like” TV service coming in September.
We’ve reported on Apple’s intentions to roll out a live TV service — and we’ve also mentioned how those plans have repeatedly hit road blocks. So if Apple can’t license content from cable networks, perhaps the company’s best bet is to start making deals for original content.
This strategy has worked out very well for Netflix and Amazon, which both now offer popular, critically acclaimed, award-winning TV shows that are exclusive to their respective platforms. Netflix has “House of Cards” and “Orange is the New Black” among many others, while Amazon has won awards for “Transparent” and “Mozart in the Jungle.” Both companies look to add more original series soon.
Offering enough original content to justify a live TV service could be just what Apple really needs, which is another hit product.
Apple’s hardware and services have a symbiotic relationship: Successful Apple services often mean great hardware sales, and great hardware sales often lead to successful Apple services. The Apple TV is an excellent set-top device, but it lacks services that are truly different from other set-tops out there. Amazon, Google and Roku all make similar set-top boxes that offer most of the same services, and most of these set-tops are cheaper than Apple's $150 offering.
The VergeStill, the newest Apple TV has features you can't get elsewhere, like its exclusive App Store. So the Apple TV could be a major success, but its biggest feature, the long-rumored live TV service, has been stuck in development limbo for years.
Apple has been in talks with networks like 21st Century Fox, CBS and Disney to license programming from those companies, but those talks have stalled again and again. The president of Disney-owned ESPN told The Wall Street Journal that Apple has “been frustrated” by these discussions.
Perhaps Apple’s ability to get original content on the Apple TV will persuade some of the other cable networks to license their programming. Apple has yet to sign any agreements, according to The Street, but one source says Apple hopes to have this exclusive content in place by September, when Apple’s expected to launch the iPhone 7. According to reports, Apple might also release updated Apple TV hardware around that time, so perhaps that will coincide with the announcement of this live TV service.
As we mentioned, Apple really needs a new hit right now. A whopping 68% of Apple’s total revenue comes from the iPhone business, which is both incredible but also worrying because if rival smartphones get better — or a new technology comes along — Apple’s biggest source of income could be in jeopardy. So if Apple wants to diversify its sources of revenue in the short-term, a live TV service with exclusive original content could be just what the doctor ordered.