Will Apple Sacrifice Privacy for Its TV Service?

Source: Apple

Earlier this week, new rumors about Apple’s efforts to establish an Internet-based pay-television service emerged from several media outlets. On Monday, sources cited by The Wall Street Journal claimed that the Cupertino, California-based company was in talks with programmers to create an online subscription television service that would consist of around 25 channels and cost as little as $30 per month.

Apple’s proposed service is likely to be welcomed by consumers who have been looking for a user-friendly alternative to the increasingly expensive pay-television subscriptions offered by traditional cable and satellite providers.

Even consumers who are not interested in subscribing to an Apple television service can appreciate the company’s entry into the market, since it would likely spur traditional providers into improving existing services. Sounds great, right? Well, as the old saying goes, “the devil is in the details,” and one of the rumored details of Apple’s proposed service could potentially alienate its existing base of loyal users, even as it disrupts the wider television market.

According to sources cited by the New York Post, Apple has offered to share user data from its proposed television service with programmers. This data would allow programmers to more effectively target shows and advertising at specific groups of viewers. As reported by the Post, this would make Apple’s television service more attractive to programmers than the ones offered by cable companies and other Internet-based service providers, since both of those have so far refused to give this data to programmers.

Without this added user data incentive, Apple may not be able to persuade programmers to get on board with its new service. On the other hand, this move would compromise one of Apple’s cherished principles: its longstanding opposition to monetizing its customers’ data due to privacy concerns.

Source: Thinkstock

 

Privacy has been a hot-button issue in the tech industry ever since documents leaked by former NSA contractor Edward Snowden suggested that many companies — including Apple — aided the government’s surveillance efforts. Since then, Apple has repeatedly denied working with the government to collect customers’ private data, and it has taken pains to highlight its efforts to protect its customers’ privacy.

“[W]e have never worked with any government agency from any country to create a backdoor in any of our products or services,” wrote Apple CEO Tim Cook in a message posted on the company’s website. “We have also never allowed access to our servers. And we never will.” Besides denying the allegations of government cooperation, Apple also highlighted the differences between its product-based business model and the business models of companies such as Google that offer free services based on advertising revenue.

“A few years ago, users of Internet services began to realize that when an online service is free, you’re not the customer. You’re the product. But at Apple, we believe a great customer experience shouldn’t come at the expense of your privacy,” said Cook. “Our business model is very straightforward: we sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers.”

Cook took an even stronger stance on privacy during a recent interview with The Telegraph. “[Privacy] is a basic human right,” he told the publication. “We all have a right to privacy. We shouldn’t give it up.” Apple’s emphasis on privacy even sparked an encryption race between the iPhone maker and Google last year. After Apple announced that iOS 8 would feature default encryption, Google announced that Android would soon offer a similar feature.

Considering how much attention the company has drawn to its stringent privacy policy over the past several years, Apple would appear to be making a major misstep if it launched a streaming television service that violated those principles.

On the other hand, Apple may have decided that any backlash it gets over sharing user data for a television service is a price it is willing to pay in order to gain a foothold in the burgeoning online television market. Considering how long Apple has been rumored to be trying to get its television service off the ground, the company’s offer to give programmers data on users’ viewing habits could even be seen as a desperation play.

Kevork Djansezian/Getty Images

While the Journal’s report was based on recently leaked information, it should be noted that rumors about Apple’s efforts to create its television service have circulated over the past several years. In late 2013, sources cited by Quartz claimed that Apple was in similar negotiations with programmers, while the WSJ reported that Apple was in talks with Comcast over the possibility of allowing an Apple TV service to travel on a separate, less-congested part of its network.

However, neither of these efforts panned out, with the failure of the latter talks being widely blamed on Comcast’s unwillingness to help Apple launch a service that could compete with its own plans for an Internet-based television service.

Now, with more traditional pay-television providers starting to roll out their own Internet-based services, Apple may be getting even more desperate to get its service launched as soon as possible. In January, satellite television service provider Dish unveiled Sling TV, a $20-per-month subscription service that offers 17 channels, including ESPN. Earlier this month, sources that spoke with The Wall Street Journal claimed that Comcast’s NBCUniversal has plans to debut an Internet-based video service featuring comedy programming.

Since the Post’s claims were derived from unnamed industry sources, it is impossible to know whether the rumors about Apple’s proposed television streaming service are true. However, as a company that was founded by a man who was famed for his ability to apply a “reality distortion field” to Apple’s products, it is easy to imagine that Apple could find a way to maintain its reputation as a bastion of privacy, even as it lets programmers fine-tune their advertising with valuable user data.

In any case, it will likely be a while before we find out if this rumor is true. According to the Journal’s sources, Apple’s television service won’t be ready until the fall.

Follow Nathanael on Twitter @ArnoldEtan_WSCS

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