Apple Reportedly Asking TV Networks to Handle Streaming Infrastructure for Upcoming Video Service

Apple is playing it smart.

Apple is expected to unveil its own video service later this year, following the announcement of the company’s new Apple TV, which debuts in June, according to sources. In preparation for the said events, the Cupertino-based technology giant is asking TV networks to provide their own shows and handle the costs of the streaming infrastructure, industry executives revealed to Re/code.

There were mixed reactions to Apple’s approach, with others reportedly halting negotiations with the company. But for Tom Morgan of Net2TV, the streaming costs aren’t high. Morgan says that streaming content to a living room costs around five cents an hour per stream. The decision isn’t also surprising, considering that video services that stream via Apple’s apps are already managing their own streams by partnering with content delivery networks.

Furthermore, sources said that Apple’s Eddy Cue, the person leading the negotiations, wanted Apple to focus on creating the hardware and software, delegating the task of providing content and handling the streaming infrastructure to the TV networks. By doing so, Apple can avoid penalties. Since TV networks are responsible for their own programming, Internet companies like Verizon and Comcast are less likely to impose penalties on Apple.