Apple-branded TV contingent upon content deals

Cupertino is unlikely to design and market a full-fledged Apple television  set – unless the company manages to clinch an unspecified number of content deals.

Pacific Crest analyst Andy Hargreaves, who recently met with Apple exec Eddy Cue, reports that chief of Internet Software and Services told him Cupertino was obviously capable of designing an improved television user interface. 

However, without content deals, said Cue, the UI would be an “incomplete” platform.

“Unfortunately for Apple and for consumers, acquiring rights for traditional broadcast and cable network content outside of the current bundled model is virtually impossible because the content is owned by a relatively small group of companies that have little interest in alternative models for their most valuable content,” Hargreaves wrote in an industry note obtained by CNN/Apple 2.0.

“The differences in regional broadcast content and the lack of scale internationally also create significant hurdles that do not seem possible to cross at this point.”

As AppleInsider’s Katie Marsal points out, Hargreaves’ interpretation of Cue’s remarks are congruent with recent reports that indicate Apple is currently in talks with cable providers to potentially build a set-top box capable of streaming live TV programming.

Unfortunately, Apple has yet to clinch a deal with any cable operator, perhaps because of a reluctance on the part of content providers to allow Apple to enter the lucrative live TV market.

Nevertheless, analyst Ben A. Reitzes with Barclays Capital believes major media companies may ultimately end up striking a deal with Apple in an effort to monetize content watching from consumers who are moving away from traditional cable TV subscriptions.

“Apple may hold the cards in being the only company that can fully monetize the small screens for big media companies. 

“The risk of not partnering with Apple is that as young people may ‘cut the cord’ given the cost of cable that a screen connected to an Apple TV with AirPlay can provide a substantial array of content,” Reitzes added.