Apple runs into trouble inking content deals for TV Shows and Newspapers

Fri, Mar 19, 2010


The iPad may very well be the ultimate media consumption device, but Apple is reportedly running into trouble getting certain kinds of content onto the iPad at the prices it desires.

The Wall Street Journal reports that TV and Newspaper executives are hesitant to strike content deals with Apple due to concerns that an iPad deal may affect their other revenue streams. If you recall, Apple was reportedly pitching a TV subscription service to Television networks where users would pay a flat $30 fee in exchange for streaming access to a variety of content from iTunes. Early reports of the rumored subscription service noted that the service wouldn’t be exclusive to the iPad, but that users would be able to access it via a variety of hardware devices.

But as is routinely the case, some networks were apprehensive about jumping into bed with Apple in light of how much power they attained in the music industry – nevermind the fact that Apple and iTunes arguably saved the music industry. Another concern, even for networks who were reportedly intrigued with the idea, is how a content deal with Apple would affect existing relationships with cable providers. Given all of the red tape and complex licensing issues that seemingly creep into every facet of a media content negotiation, it really is a marvel that Apple was able to get the iTunes Music Store off the ground in the first place.

Apple has narrowed the device’s scope. It has put on hold its idea to offer TV subscriptions that would be viewable through the iPad, because few media companies were interested. Instead, Apple is discussing dropping the price of TV shows to 99 cents from the $1.99 and $2.99 charged for most shows on its iTunes store, said people familiar with the situation.

Naturally, TV execs aren’t thrilled with dropping the price of TV episodes down to 99 cents, but Apple is reportedly trying to make the case that with lower prices, TV content via iTunes “could help create a new market.” Truth be told, there’s a huge psychological difference in the mind of a consumer when faced with a downloadable TV show for 99 cents versus $1.99.

But TV isn’t the only roadblock encountered by Apple. The Journal notes that Newspapers have also been slow to hop on the iPad bandwagon, with the WSJ and the NY Times being two notable exceptions. So while Apple attempts to traverse its way through TV and Newspaper deals, it’s reportedly decided to focus more attention on what it actually can control – it’s upcoming iBook Store that will allow users to download e-books onto their iPads.

Apple is still negotiating with media companies for a price cut on TV shows that people can download onto the device, some of these people say. Apple also hoped to work closely with newspaper, magazines and textbook publishers on new ways to digitally present print content on the iPad, but has for now put the effort on backburner, said one of the people.

One area where things appear on schedule is Apple’s new virtual bookstore iBooks, which lets iPad owners purchase and read digital books. People familiar with the matter said the largest publishers are on track to deliver most of their titles and it should have almost all of the books as existing e-readers like Inc.’s Kindle and Barnes & Noble Inc.’s Nook.

Further Reading: Disney is pumped about the iPad



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