Apple, eyeing $40/month TV service, pushes launch back to 2016, report says

Apple (NASDAQ: AAPL) has once again pushed back plans to reinvent television, according to Bloomberg.

Citing unnamed sources, the publication reported that sluggish negotiations for program licensing are causing Apple to re-calibrate its launch date for a new streaming pay-TV service to 2016. Bloomberg said Apple is seeking to keep the monthly consumer price point at or below $40 for a programming bundle that includes the networks of CBS Corp., 21st Century Fox and Comcast/NBCUniversal, among other conglomerates.

Apple, the report said, continues its years-long quest to bundle together an essential collection of networks at the right monthly price.

Bloomberg also said that Apple still hasn't worked out an efficient technology scheme for streaming high-definition video to a customer base dispersed all over the U.S.

The Bloomberg report lacks clarity on the specific nature of the negotiation impasses. Citing unnamed sources close to Apple, it said that Apple is trying to get a steep discount on programming that typically costs $80 in a traditional pay-TV bundle. But it is unclear as to how many channels Apple is trying to assemble.

Earlier insider reports suggested Apple is emphasizing access to live feeds from local broadcast stations. The reports said Apple is working with major programming conglomerates, asking them to get their network affiliates on board with the program. 

Piper Jaffrey analyst Gene Munster said he expects the service to also contain major cable networks like ESPN, TNT, TBS and AMC. Apple hasn't confirmed or commented on its agenda.

Munster also told investors that it's "50-50" as to whether Apple will unveil the new service at an anticipated Sept. 9 public event in San Francisco. 

FBR Capital Markets analyst Daniel Ives told Bloomberg that a streaming video could add as much as $3 billion to Apple's annual bottom line -- not large money for a company that generated $233 billion in its fiscal 2014.

However, the ability to create a content ecosystem around its devices, as it did with music starting more than a decade ago, remains Apple's ultimate goal.

"Streaming TV would provide another future growth avenue into the next generation consumer," Ives said.

For more:
- read this Bloomberg story
- read this Apple Insider story

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