iTV said to come with pay-TV service

Apple TV (teaser 001)

The Apple television saga continues with a new report by Quartz today offering a fresh insight behind the curtain of Apple’s ongoing negotiations with content owners. The crux: while the talks have stalled as Apple’s faced significant hurdles, the company is cunningly hoping to get at least a few content providers on board for a rumored iTV launch.

Afterwards, Apple is hoping to get cable companies to play along, the report notes. Apple’s ultimate goal is to have the rumored standalone television set launch with a pay TV service that would see Apple “essentially becoming a cable company itself”

According to the Quartz report, the stalling negotiations with cable companies prompted Apple to instead talk directly to content providers who license their content to cable and satellite providers.

Specifically, Apple is apparently negotiating with production studios and networks to provide content for “a television set that would emphasize apps over cable TV”, among them being Disney’s ESPN, Time Warner’s HBO, and Viacom, which owns MTV Networks, Nickelodeon, and Comedy Central.

One alternative being considered is that Apple could essentially become a cable company itself. Under that scenario, sources say, Apple would launch what is formally known as a virtual multichannel video programming distributor.

MVPD is the catch-all term for pay TV services, whether delivered over cable lines, satellites, or otherwise. A virtual MVPD would offer such content entirely over the internet. Intel, Google, and Sony are known to be preparing virtual MVPDs of their own.

The story also mentions that Sony, Google and Intel are considering similar strategy for their own television efforts. Apple and Viacom refused to comment on the story, with ESPN mentioning “there are no formal discussions taking place”.

HBO’s Jeff Cusson said his company has “no plans to go over the top or to enter these markets in a different way,” meaning the network isn’t ready to allow online-only subscriptions as of yet.

Apple’s TV product would offer television apps instead of channels, the report noted, adding the company is tapping its acquisitions of content aggregator and PrimeSense, the Israeli firm whose technology is behind Microsoft’s Kinect.

Former Hulu exec Peter Distad just started work at Apple and Bloomberg thinks he could help with Apple’s talks with Time Warner Cable. The cable network’s CEO previously said his company was discussing streaming video deals with Apple.

He also spoke fondly of Apple’s $99 Apple TV set-top box and indicated his company would be willing to give control of the television interface to Apple provided the company lets it keep customer relationship.

Back in July, Bloomberg claimed Time Warner Cable channels would be coming to the Apple TV “in a few months,” leading pundits to speculate that Apple could still be planning some sort of a TV-related product announcement this year, be it a fourth-generation Apple TV, a full-on TV set or even a companion Apple TV product / intelligent remote.