Apple Reportedly Shelves Plans for Streaming TV Subscription Service

| Analysis

CBS CEO Les Moonves on an CBS CEO Les Moonves on an "Apple TV"

You know those rumors we've been hearing for years? The one about Apple working on a streaming TV service that would let people drop their cable service like a bad habit? Apple is shelving those plans, according to Bloomberg, who cited TV executives, including CBS CEO Les Moonves.

Mr. Moonves has spilled the beans on Apple's plans in the past. In 2011 he said publicly that he had declined to work with Apple on a subscription service due to Apple's terms. In 2012, he claimed that Steve Jobs personally pitched him on the idea. This tangentially jives with Walter Isaacson's Steve Jobs biography, in which Mr. Jobs was quoted as saying he had "cracked" the code for a connected TV interface.

On Tuesday, Mr. Moonves said at a conference that Apple has put plans for its surface "on hold." Bloomberg added that Apple is instead focusing on the App Store for Apple TV being an ad hoc avenue for Internet-delivered TV one app at a time.

Despite that "hold" and new focus, Mr. Moonves said that Apple hasn't entirely given up on its plans for a subscription service. He described a scenario where Apple would eventually offer a limited bundle of TV and cable networks between US$30 and $40 per month.

"This will happen," Mr. Moonves said at the conference. "It has four major TV networks and 10 cable networks, let’s say, and the price point will be in the $30s, $30 to $35, $40 maybe. People will not be spending money on channels they don’t want to watch."

14 channels at $40 is far more expensive on a per-channel basis than the 200 or so channels most people get for their $60-$100 cable subscriptions. On that basis it doesn't sound like a winning formula, but the reality is that most of us watch only a handful of the channels we get in the first place.

But here's the rub. In a throwaway line at the end of its report, Bloomberg said that unspecified media executives expect Apple, Amazon, and other new Internet-based distributors to pay more for their content than cable and satellite companies. Yet Mr. Moonves is balking at Apple's terms, terms that on the face of things would have customers paying more per channel than they currently do. How much more do these executives expect to get?

I'm likely oversimplifying the situation. It's also important to remember that while CBS would assuredly be one of the major networks included with any 14 channel service offered by Apple, CBS is a much larger company that gets money for some of those 186 other channels we all have but few watch.

In other words, Apple wants to upset the TV cart by offering something many customers are clamoring for, a focused plan offering them only the content they want. That's roughly the last thing that folks like Les Moonves want.

It's a shame, too. Many Apple fans have been intrigued by the tease we got in Steve Jobs. A TV interface with the Apple touch would be so much more enjoyable than the fare we otherwise have. If Mr. Moonves is to be believed—and I do believe him—we won't be getting it any time soon.

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I’m getting closer and closer to cutting the cord and replacing it with nothing. Not AppleTV, not Roku, any of them. You said that most people get 200 channels but watch few. I find I watch less and less of them. If my wife wan’t a huge fan of NCIS/Bones/Castle We’d be gone already.

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