updated 02:00 am EDT, Tue July 16, 2013
Company would compensate networks for lost ad revenue
A technology reporter for the Wall Street Journal has claimed in a new report that Apple has been negotiating with networks for "more than a year" over a proposal to allow customers using the company's Apple TV -- and presumably any future video-oriented products like the alleged branded HDTV -- to skip the advertisements, possibly substituting them with other types of programming. Under the arrangement, Apple would compensate the network for the lost revenue, but the details of the plan are unclear.
According to the report, Apple wants to offer a "premium" version of the Apple TV service that would include live and on-demand television. While cable companies and networks have thus far been reluctant to endorse any ad-skipping service, the fact that they would be compensated for it may be the key factor to get some companies on board with the idea. Thanks to the invention of digital video recorders, viewers are accustomed to fast-forwarding or skipping ads altogether when watching time-shifted content, which may have softened the stance of the media companies.
How Apple's offering would differ from similar technology Dish Network proposed last year (and got sued over) isn't clear, but Apple has patented a technology that would automatically swap out different content during the normal commercial break. It's possible, for example, that Apple could offer targeted trailers or short subjects, or automatically post photos from the users' library during the breaks and simply compensate the networks for the lost revenue, though how it would make up the income is the part that Apple hasn't revealed.
Apple CEO Tim Cook along with SVP of Internet Services and Software Eddy Cue attended last week's Sun Valley media and tech conference hosted by investment bankers Allen & Company, and presumably had meetings with companies such as Time Warner to discuss any future video or Apple TV arrangements. When asked about possible talks during the conference, Cue joked and feigned innocence with reporters -- quipping "there are cable companies here?" The report says that marketing head Phil Schiller has also been talking to partners, signalling that after a year of fits and starts, the initiative is gathering momentum.