TV Trouble: Apple Gets No Love from Cable Companies

Apple (NASDAQ:AAPL) was widely expected to release a new Apple TV set-top box this year, but according to one report, that is not likely to happen anymore because the company’s talks with cable companies have stalled. Issues that ultimately proved to be the deal-breakers included whether Apple would have total control over the user interface and the exact structure of the content rights deals, according to Bloomberg.

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While Apple was able to make its forays into the music and mobile phone spheres because of a weakened record label industry and a broken wireless market, the stakes have gotten higher in this particular battle. The competition is tougher, too, as Apple faces down Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and (NASDAQ:AMZN) in its attempt to change the television market.

“It’s not a nice, simple, easy story that Apple is going to come in and turn the world upside-down and we’re all going to live happily ever after,” Sanford C. Bernstein analyst Craig Moffett told Bloomberg. According to Moffett, any idea that Apple was likely to soon unveil a brand-new TV system “ignores the business realities that make this such a complicated industry.”

Apart from the user interface debate, Apple and cable providers apparently also disagreed on whether the new set-top box would be sold directly to customers or leased through the latter. According to BTIG analyst Rich Greenfield, cable companies are worried about losing their connection to customers in the same way Apple changed the relationship between wireless carriers and their customers after the iPhone’s debut. Apple also wants to integrate more on-demand content for viewers to watch when they want, including older episodes of television shows.

However, the iPhone maker is said to be deepest in its negotiations with Time Warner Cable (NYSE:TWC) and may look at that provider to be its first partner. “Unlike other distributors, we are not religiously wedded to absolutely controlling the user interface,’ Robert Marcus, chief operating officer of Time Warner Cable, told Bloomberg, but did not comment on Apple specifically.

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