After months of rumors that Apple (NASDAQ: AAPL) would announce its own $30 to $40 per month linear OTT television service, the iconic company has put its plans for such a service on hold, most likely because it couldn't convince media companies to lower their costs to license programming.
Word the project had been suspended came not from Apple but from CBS Corp. chief Les Moonves, during an appearance at Business Insider's Ignition Conference in New York, Bloomberg reported. However, Moonves wasn't dismissive of Apple's efforts; rather, he said that Apple will eventually offer a channel bundle … someday. "This will happen," he said, predicting the service would include the four major networks and have a price point between $30 and $40.
For now, Apple will continue CEO Tim Cook's initiative to focus on apps, Bloomberg reported. The company recently opened its App Store to outside developers in order for them to sell directly to iOS users.
What effect will lack of a linear TV service have on the Apple TV streaming device? Pausing the service's development removes one potential differentiator for the device in a market that's crowded with popular alternatives. Roku continues to top overall streaming device sales, while Google (NASDAQ: GOOG) Chromecast is the most popular dongle device. Amazon (NASDAQ: AMZN) made an aggressive move this fall, banning competing devices from its online retail listings in order to keep its Fire TV devices front and center.
Apple TV also lacks any sort of dedicated app that might attract consumers, Re/code's Peter Kafka noted. In a new Apple TV ad that began airing Tuesday, the company touted all the TV shows that users can watch on-demand via the streaming device. "Reality check: You could have watched all of this stuff with the old Apple TV, and you can also watch all of this stuff with rival Web TV hardware sold by Google, Amazon and Roku," Kafka said. Instead, Apple should offer apps that are exclusive to its device, he added.
That lack of differentiation may impact Apple TV sales during the holiday season, and make the idea of funding a linear TV service for the device even less appealing to the company. In a presentation at the Ignition conference, Piper Jaffray Senior Research Analyst Gene Munster forecast that only about 3 million Apple TV devices will ship in Dec. 2015, compared to 5 million a year ago. Those sales will bring in about $500 million, or 1 percent of Apple's revenue, he said.
For more:
- see this Bloomberg article
- see this Re/code article
- see this Business Insider article
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