Apple Approaches Disney, Viacom And Time Warner For iTV Launch
According to Quartz, Apple has spoken with all three firms about the possibility of obtaining select content.
While Netflix (NASDAQ: NFLX) has already secured an exclusive deal with Disney to stream movies in 2016, the company has made no such deal for ESPN. Apple hopes to take advantage of that opening and bring high-end sports content to its future TV set.
Apple is also interested in a deal with Time Warner's HBO. The network has repeatedly said that HBO will remain a cable exclusive, but Apple may be looking to find a way around this restriction.
Viacom -- the conglomerate behind Nickelodeon, MTV and other cable networks -- is said to have had discussions with Apple as well. The company, which has popularized shows like SpongeBob SquarePants and Jersey Shore, has also spoken to Sony (NYSE: SNE) about its rumored pay-TV service.
Can Apple live without content from these companies?
The better question to ask might be, "Which companies must Apple sign agreements with in order to sell a TV?"
The answer is vastly different from the initial speculation. Quartz's sources claim that Apple has concluded that it does not need all of the content providers to come aboard before it can release and successfully sell its first television.
"It just needs enough good programming to distinguish the new product, which will try to simplify the experience of connecting internet video to the TV," Quartz's Zachary M. Seward, Gina Chon and Kevin J. Delaney wrote in their report.
Last year, analysts were convinced that Apple would not release a TV until it could secure content from all of the major providers. Apple was also rumored to be working with cable companies, but that story has persisted without any evidence to back up the claim.
If Apple is only able to obtain select content deals, however, its TV could end up being a niche item.
Sports may be the biggest draw, but unless Apple can offer exclusive events, consumers aren't going to readily dump their existing displays and pay-TV services. To persuade them to make a switch, Apple must offer something that is truly unique.
Even then, Apple could have a difficult road ahead.
Microsoft (NASDAQ: MSFT) relied on sports and other TV gimmicks to promote the Xbox One in May. At the time (which was before the controvery ignited), consumers complained that there weren't enough games.
What would happen if Apple released a TV -- and an a la carte TV service -- that didn't have enough networks and shows? If consumers were still forced to get cable for some content, would they even bother with Apple?
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.