Why Apple might want to buy HBO from Time Warner
Time Warner isn't for sale, but Apple is reportedly eyeing its assets.
Apple has big plans for TV that don’t stop with a redesigned version of its set-top box and an App Store just for TV apps. While Cupertino has given up on creating its own television, leaving that to established players like Samsung and LG, the company is reportedly hard at work developing a streaming TV service that could kill cable. But instead of starting from scratch with its own streaming package, rumor has it Apple is eyeing Time Warner’s assets—not to partner with, but to buy outright.
Eddy Cue, Apple’s senior vice president of software and services, is reportedly keeping a close eye on Time Warner, which isn’t officially for sale, but is under pressure from shareholders and investors to either sell all or part of itself. According to the New York Post, Apple is more interested in Time Warner assets like HBO, CNN, and Turner Sports, plus TV shows and movies from Warner Bros., than in running a media company. Those assets could become the core of Cupertino’s stand-alone streaming service.
An Apple acquisition of Time Warner or its assets would have huge ramifications for the tech and media landscape, placing Apple squarely in the center of an old-guard industry it’s trying to upend. CBS CEO Les Moonves said in December that Apple had hit the pause button on development of its streaming service because of difficulty nailing down networks, and a Time Warner deal would likely restart that process.
It seems more likely that Apple would want a few pieces of Time Warner, such as HBO, rather than the whole company, which would be a backwards move. Apple often acquires startups developing new tech the company can put into its hardware and services, or companies like Beats which are successful on their own. It does not have a history of acquiring media conglomerates entrenched in old ways of thinking. It would make more sense for Apple to buy HBO, which the company worked with to launch the HBO Now streaming app last year. But Time Warner has no interest in carving off HBO or its cable TV offerings from the rest of its assets, according to the Post, because the company is less valuable without them.
Why this matters: Apple wants to help Apple TV buyers cut the cord with a cheaper streaming package that bundles the best networks and removes the bloat that bogs down traditional cable subscriptions. But buying Time Warner would be a strange move for Apple for all the above reasons—plus the company faces competition from AT&T—which now owns DirecTV—and Fox. Like Eddy Cue, we’ll be keeping a close eye on these developments.