Reportedly, none other than Eddie Cue, vice president of Apple’s internet software and services, pitched the idea of a Time Warner acquisition in a meeting between Apple chief Tim Cook and Olaf Olafsson, Time Warner’s executive VP of international and corporate strategy. The three discussed the potential of a relationship between the two companies — Cue, who oversees the iTunes Store, iCloud, and Apple Music, wanted Time Warner’s popular pay-TV channels to form the basis of a new Apple video streaming service — and, alternatively, a buyout bid worth “billions.” Talks never moved beyond a “preliminary stage,” though, apparently — a merger was never considered “seriously” by Olaffson and Time Warner CEO Jeff Bewkes, and the idea was “very much tentative.”
The talks came after Rupert Murdoch’s 21st Century Fox made a failed bid for Time Warner two years ago.
Apple’s would-be acquisition of Time Warner, a company worth an estimated $60 billion, is yet another sign of the iPhone maker’s intense interest in the cutthroat pay-TV market. Last year, Apple inked a three-month exclusivity deal with Time Warner involving the launch of HBO Now, an a la carte streaming service first made available on the Apple TV. Another case in point: the Cupertino company is producing an original dramatic series about app developers featuring music artist Will.i.am, that is expected to debut alongside an Apple-branded internet TV service at a press conference in September.
A TV streaming service is an idea that Apple has long pursued. According to numerous reports over the past year, the firm has held ongoing meetings with CBS, Fox, NBC, and other content providers across the better part of 2015, but has so far failed to come to terms with any provider on pricing.
Apple wants subscriptions for its service to start at between $20 and $40 per month and provide customers the option of adding premium a la carte bundles for sports and entertainment channels, a sticking point for content companies like ESPN, which want subscriptions to start higher. And Apple is angling to land local channels across all major markets, a tangle of deals with individual affiliates that neither of its biggest competitors, Dish Network’s Sling TV and Sony’s Playstation Vue, has been able to achieve.
Apple is not giving up on its content dreams without a fight, though. It intends to ramp up spending on exclusive content to “several million dollars a year” according to the Financial Times, and plans to launch an “Exclusives” app on Apple TV and within iTunes filled with original shows, short films, documentaries, music videos, and other streaming content. The firm also hasn’t ruled out acquiring a media company, but faces roadblocks: lucrative targets like Comcast, CBS, and Fox have powerful shareholders, making the approval of an acquisition a challenging proposition.
Analysts who spoke with CNBC believe Apple is much more likely to buy a streaming service like Netflix, which would “make it easier for [the company’s] service to continue to offer a wide range of content makers.” One thing’s for certain, though: Apple’s finally getting serious about TV.
