Is Apple Pursuing OTT Again?

A new year, a new Apple TV rumor.

Apple Inc. (Nasdaq: AAPL) is once again in talks with programmers about creating its own OTT video service to compete with conventional pay-TV offerings, according to a report by Recode. Of course, the retail giant has explored pay-TV licensing deals in the past, but to no avail. The big difference now is that the programming market has loosened up… dramatically.

Executives reportedly say that Apple has no intention of replicating the full cable TV line-up online, but would instead follow the new model that Dish Network LLC (Nasdaq: DISH) has established with Sling TV. That startup service, which is still in rolling launch, offers a much skinnier bundle of channels with Walt Disney Co. (NYSE: DIS)-owned networks -- including ESPN -- at its core. At $20 per month, Sling TV costs much less than traditional pay-TV offerings. While it's not the à la carte option some consumers have clamored for, it's much closer to that option than anything introduced in the past. (See Sling TV – Like Pay-TV, but Skinnier.)

Talks between Apple and network execs are still in the early stages, with no word yet on how pricing or timing could shake out. However, Recode's sources say Apple does have a demo service worked up and has shown it off in closed-door meetings.

Want to know more about OTT video? Check out our dedicated OTT content channel here on Light Reading.

There's no guarantee of success if Apple does pursue its own pay-TV service. But the combination of today's higher-capacity broadband networks, growing interest in Internet video and a more flexible programming environment means the company should have a better shot today than at any time in the last decade.

There's a good reason the pay-TV industry is tracking Apple so closely.

— Mari Silbey, special to Light Reading

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