Apple Pitches Ad-Skipping Tech for its Proposed TV Service

Apple has been in discussions with cable companies and television networks for more than a year regarding licensing agreements for a new service that would allow viewers to access live and on-demand television via an Apple set-top box or TV. In recent discussions, the company reportedly told media execs it hopes to offer a premium version that enables viewers to skip ads. According to people briefed on the discussions, Apple would compensate networks for the lost revenue.

“While TV networks might not mind Apple chipping in to cover the cost of skipped ads, that’s a product that may not sit well with those on Madison Avenue who need the medium to promote their products to the tune of about $70 billion per year,” reports Variety.

The $99 Apple TV currently provides access to iTunes and online video, but the company has been pursuing a more ambitious service that includes live TV. This is the first time that the ad-skipping feature has been reported. However, last year Apple was granted a patent for technology that could provide an alternate video stream during a commercial break.

Apple CEO Tim Cook and senior VP Eddy Cue met with execs during the annual Allen & Company conference in Sun Valley, Idaho last week.

“It is a risky idea,” wrote media tech journalist Jessica Lessin on her blog earlier this week. “Ad-skipping would disrupt the entrenched system of television ratings — the basis for buying TV ads. In fact, television broadcasters sued Dish Network when it introduced similar technology last year.”

“On the other hand, it is no secret that fewer and fewer people are watching commercials thanks to DVRs; networks may very well be eager to make, rather than lose, money off the practice.”

Lessin, who spent the past eight years as a reporter and editor for The Wall Street Journal, announced last month that she was “leaving the paper to start a premium technology news publication with a small team of awesome reporters.” Her blog is a news resource designed to serve as a “site for scoops and other stories” until the new venture is up and running.

Lessin notes that Apple has been pursuing cable companies such as Time Warner Cable “to allow cable subscribers to watch television using an Apple device as a set-top box and with a software interface designed by Apple. But the company has also been talking to television networks, which sell cable companies rights to their content, about rights for the service and issues such as ad-skipping.”

“A series of rumors has pointed toward the company expanding from selling content a la carte to a subscription that would rival what people purchase from their cable provider,” reports CNET. “Apple would not be the first company to offer users a way to skip ads on TV programming. TiVo and ReplayTV offered the feature to consumers more than a decade ago, and it’s since permeated to the DVRs cable providers offer to customers. More recently, companies like Dish and its Hopper technology can skip commercial blocks, though the feature can be limited on certain programming and has raised legal ire from major broadcast networks which say it violates copyright law.”

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