According to a person familiar with the matter, Apple has decided to place its plans to develop a live Internet-based TV service on hold.
However, while Apple will move its focus to providing a platform to media companies in selling directly to users through the App Store, the company has not entirely given up on some day launching a live Internet TV service.
Apple was met with resistance by media companies as the company looked to sell a bundle of about 14 channels for a monthly fee of around $30 to $40. The companies wanted more money for the content that they produce during negotiations with Apple, according to Bloomberg's source, while Apple wanted to maintain the service at the proposed price point.
CBS CEO Les Moonves earlier confirmed that Apple had placed its plans for a live Internet TV service on hold. Moonves added that the network and Apple came close to an agreement with a $35 price point for the service, but Apple decided to suspend its plans.
Moonves, however, thinks that Apple will eventually be able to offer customers with channel bundles that could have four major networks and 10 cable networks. Moonves also said that the service could push through at the price point that Apple is proposing, as consumers are looking not to spend money for channels that they do not watch.
The news regarding Apple's suspension of the development of its live Internet TV service shows the reluctance of media companies to change up the conventional bundles for pay TV. Apple will either have to charge a higher amount that its $30 to $40 price point or media companies will need to accept less profits for the project to proceed.
Apple, which saw willingness from music companies to form partnerships, is seeing the opposite from TV programmers. Executives of media companies have stated their expectations of being paid higher by new TV distributors such as Apple compared to existing distributors, which does not bode well for lower-cost services.
Without the live Internet TV service in place, Apple is relying on software developers to create entertainment content for the Apple TV.
The live Internet TV service of Apple has long been the subject of rumors, with many expecting it to be launched alongside the revamped fourth-gen Apple TV. However, that did not push through because of slow negotiations in securing licensing deals with content providers.
