Apple, Inc. will be delaying its live TV service to 2016 due to several factors, people familiar with the matter told Bloomberg.
Issues with the licensing of TV programming and the lack of computer network capacity are said to be the reasons for the delay.
The source, who doesn't want to be identified because talks are private, told Bloomberg that Apple's negotiations to license programming from TV networks owned by CBS Corp. and 21st Century Fox, Inc. is progressing slowly.
The issue with the price is seen as the main reason why talks are stalling.
People familiar with the matter told Bloomberg that Apple wants to offer a package of popular channels for just $40 a month.
The package price is way lower compared to the average monthly cable bill in the U.S.
Bloomberg adds that TV networks expect Internet-based services, like Apple's live TV service, to pay them a higher fee. This is because these services are just new to the market and are also asking to gain a share of the viewers.
CNET also adds that Apple is not being helped by the already competitive market being dominated by cable companies and satellite TV providers.
This competition is also a reason why content providers can hold out for better terms.
Unless Apple can convince these TV networks to give them a discounted price to show some of their programs, it's going to be hard to offer to consumers the $40 a month package that they want.
Bloomberg adds that aside from providing the content, Apple is also struggling with creating a computer network that can support a fast, glitch-free, viewing experience in the U.S.
Nick Del Deo, an analyst at Moffettnathanson LLC, told Bloomberg that though Apple has solutions, it would be expensive.
"Apple could send every bit from one central point, but the bandwidth costs would be exorbitant," he said. "Plus, the service would be terrible."
Apple is working with Akamai Technologies, Inc., a company that runs a "content distribution network," and another company that operates small "micro-data centers" to help solve its network capacity issues, according to Bloomberg.
CNET adds that Apple's live TV service is the company's next step in its entertainment strategy, which is a key component of Apple's overall goal.
Apple wants to create a stable of products and services that keep consumers from straying to competitors such as Google.
