To offer such broadcasts, Apple would have to negotiate terms not only with the major TV networks but with individual local stations that are affiliates or franchisees of those networks. And that could complicate Apple’s efforts to secure local broadcast rights.
Apple’s interest in offering live, local programs could delay its plans to launch Web TV sometime this fall, according to a report published Friday by Re/code. Citing industry executives, the article also noted that Apple probably hasn’t signed any deals with programmers that could be announced at its developers’ conference next month.
‘Cutting the Cable Cord’
Internet-based, streaming television services such as Amazon Instant Video, Hulu and Netflix are among the forces that have been driving a decline in traditional cable TV subscriptions in recent years. According to data from Nomura Research earlier this year, live ratings on network television in the U.S. dropped by 12.7 from January 2014 to January 2015.
“Basically, broadband Internet is bringing consumers new, over-the-top options like Hulu and Amazon Prime, and with the high-price of cable bundles — around $125 a month — consumers are pursuing alternatives,” Federal Communications Chairman (FCC) Tom Wheeler told a gathering of the National Association of Broadcasters at a conference in Las Vegas last month. “We . . . see a growing number of people cutting the cable cord and pairing an over-the-air antenna with some OTT (over-the-top) services. I expect that we also will see more broadcast channels incorporated into OTT service offerings.”
The FCC is proposing to classify some over-the-top video service providers as multichannel video programming distributors, or MVPDs. That designation would require OTT broadcasters to obtain retransmission rights from the broadcast companies that hold those rights. The agency has been inviting public comments on that proposal, and is expected to review those later this year.
A company called Aereo had delivered an OTT television service for several years, but the U.S. Supreme Court ruled last year that its service amounted to retransmission that required the approval of the original broadcasters. The company filed for Chapter 11 bankruptcy protection in November.
Apple Is ‘Onto Something’
To include live, local programs, any Internet service like Apple TV would likely have to abide by terms that specify those programs would be available only within a designated market area, or DMA, Dennis Wharton, Executive Vice President of Communications for the National Association of Broadcasters, told us. There are currently 210 separate DMAs across the U.S.
“An over-the-top Internet-based service . . . would have to [find] a way to deliver that [local] content to discrete areas,” Wharton said. With current technology that allows for the spot-beaming of content, it is doable, he added.
ABC’s online app, for instance, offers anytime-anywhere network program streaming, although it’s limited to cable TV subscribers in only eight markets. CBS is doing something similar, Wharton said.
“Apple’s onto something here,” Wharton said, adding that local news and public affairs programs continue to draw audiences even as the rest of the market keeps fragmenting. “We’d obviously be interested in getting our [members’] content on as many devices as possible.”
We reached out to Apple for more information about its plans, but a spokesperson said the company declined to comment.