Let's talk


August 25, 2015 | Authored by: Vindicia Team

Apple OTT service not coming until 2016

Fans of Apple products will not be able to get a OTT service from Apple for a little while longer. Apple's OTT video streaming service  is delayed until 2016. According to Bloomberg Business, the licensing talks with companies like CBS and Fox are not moving as quickly as Apple would like. Without the content from big networks, Apple would not be able to launch a competitive OTT service that could keep up with Netflix or Hulu. In addition to the slow pace of licensing agreements, Apple's current network capacity can't provide a good viewing experience, some anonymous sources told Bloomberg Business.

"The content providers hold all the cards here," said John Butler, a Bloomberg intelligence senior analyst. "Apple has no power it was exactly the opposite when they came to the record industry years ago."

Can Apple compete?

Although Apple has some trouble, it seems it will follow through and offer an OTT service. However, Multichannel News pointed out there are already a lot of options, including Netflix, Hulu, Dish's Sling TV, Showtime's recently released OTT service, HBO Now and Sony PlayStation Vue, which offers multichannel packages in seven markets.

"The negotiations with content creators might make the cost of Apple's OTT service higher than its competitors."

Bloomberg points out that, although the prospect of new viewers through Apple's OTT service is appealing to companies like CBS and Fox, it might cost Apple more than they think to get access to the content. The negotiations with content creators might make the cost of Apple's OTT service higher than their competitors. Time Warner Inc.'s TNT live streaming service and Dish's Sling TV, as well as a few others, run $20 dollars per month. Bloomberg's anonymous sources said that Apple is considering a monthly price tag around $40, which is higher than most other OTT video services.

According to Bloomberg, Apple hopes the OTT video service will help improve their sales in 2016. Although the company had a strong growth rate of 28 percent this year, it is expected to drop to 5.3 percent for 2016. Daniel Ives, an analyst at FBR Capital Markets, told Bloomberg the service could generate $2 to $3 billion for Apple by 2018. Still, the sales generated by the OTT video service wouldn't be able to boost that 5.3 percent growth rate back up in the 20 percent range that the company wants to be at, but it would be another growth avenue.

About Author

Vindicia Team

Vindicia Team

We value our subject matter experts and the insights each of them brings to the table. We want to encourage more thought leaders to come together and share their industry knowledge through our blog. Think you have something interesting to contribute as a guest blogger? Contact us at info@vindicia.com