News Corp. — the owner of the Fox TV network — may hold the swing vote in Apple’s efforts to launch a TV show rental service. According to an LA Times report, NBC Universal, Time Warner Inc. and CBS Corp., are all petrified of the change such a service represents, and have “dug in their heels in opposition” to Apple’s plans. Disney, which owns ABC, has agreed to be a part of the service, however, which leaves News Corp. as the swing vote.
What’s more, it could be News Corp. CEO Rupert Murdoch’s desire to save his newspaper empire that could be at the heart of whether or not his company comes on board.
Since the ouster of Michael Eisner as the head of Walt Disney Co., that company has been the most willing of all the major media companies to work with Apple in delivering music, TV, and movies through iTunes. The two companies have worked even more closely since Disney bought Pixar and Apple CEO Steve Jobs — Pixar’s majority shareholder — became Disney’s largest single shareholder.
NBC Universal, on the other hand, has a less happy track record with Apple. For instance, NBC pulled its TV programming off of iTunes in 2007 when Apple refused a fee structure that would have driven iTunes TV show pricing up to $4.99 per episode for purchase. NBC returned to iTunes a year later, but only after it launched TV streaming service Hulu with News Corp. and other media companies.
NBC CEO Jeff Zucker has also accused Apple (and iTunes) of destroying the music business, thereby denying 15 years of music industry history in one fell swoop. Mr. Zucker is also the executive most closely tied to firing Conan O’Brien from The Tonight Show and bringing back Jay Leno as host, and for embracing reality TV in place of more traditional drama and sitcoms while watching NBC’s once dominant “Must-See TV” Thursday night ratings drain away.
According to the LA Times, Apple believes it can deliver the same, or higher, revenues to TV networks and studios by offering 48 hour TV show rentals for US$0.99 as they currently get through TV show sales on iTunes. The media companies against the plan fear that such a service would destroy the existing advertising-supported model of broadcast and cable TV, and/or harm DVD sales.
Rupert Murdoch’s News Corp. executives are reportedly split on whether or not to come on board, which could leave the newspaper issue as a deciding factor. Citing unnamed sources, The Times said the company may sign up with Apple for a 6-month trial in order to form a better relation with Apple as News Corp. ramps up production of a new national daily newspaper the company is preparing for digital distribution.
Mr. Murdoch has said on multiple occasions that devices like the iPad are key to the digital future of newspapers, and a better relationship with Apple could offer News Corp. benefits down the road.