Apple TV: Time Warner was Apple's Content Fallback Option

Apple's original plan for the next generation Apple TV may have been to side step cable service providers and give new shows to customers without needing subscriptions from companies like Comcast, Time Warner, and Dish. Those negotiations apparently didn't pan out, leaving Apple in a position where it had to scale back its plans and start negotiating with Time Warner Cable for content deals instead.

Apple wants content deals for next generation Apple TVApple wants content deals for next generation Apple TV

The iPhone and iPad maker had been working to license TV shows from content makers so it could launch its own Internet-based television service, which would've put Apple in direct competition with service providers. With those talks dead in the water Apple was forced to chance its plans and open dialogs with Time Warner and other media companies to get content for its set top box.

The upside of dealing with Time Warner is that Apple is more likely to swing a deal. The downside is that users will most likely need a cable subscription to view the content Apple offers through the deal.

That content will include on demand current TV shows, although instead of full seasons, viewers will have access to just the last five episodes. Sources told the Wall Street Journal Apple may be willing to block viewers from fast forwarding shows during the first three days they're available to help keep TV networks from balking at the deal. By blocking fast forwarding, viewers wouldn't be able to skip through any embedded ads like they currently can when using digital video recorders such as TiVo.

New content will be critical for the updated Apple TV model. The new version will include an updated interface designed to make it easier to jump between TV shows, movies, and other streaming content, and current TV programming will be a big part of that.

Apple may, however, have a few extra hurdles to jump through before it lands a Time Warner deal. Comcast announced it is planning on completing a complete buyout of Time Warner Cable before the end of the year, making a single cable provider with services from both companies. Any deals Time Warner works Apple will take into account the Comcast buyout plan -- something that could be Apple's foot in the door to Comcast, or a show stopper.

For Apple, the immediate win would be getting access to the first run content it wants to stream by using Time Warner as a go-between. Longer term, Apple TV becomes a wide spread alternative to traditional cable TV boxes, which saves service providers money since they don't have to invest in hardware for customers.

Sources are saying an Apple TV announcement could come as early as April, and the updated model will ship some time between then and fall.