Rumors of Apple's intentions to enter the TV game have circulated for years now. However, news today suggests that the company is halting all current development on its Apple TV project. The Apple TV concept is being retired because company executives have been unable to reach deals with content providers.

Apple executive Eddy Cue told Andy Hargreaves, a Pacific Crest industry analyst, that Apple was unlikely to release its own television unless it could strike deals with major television networks to provide the content. Cue said that Apple's engineering and design teams could certainly change the way users think about how television should be experienced with regard to its user interface, but without the ability to provide content directly to the user, it would be an "incomplete solution" to the problem.

One of the most recent rumors surrounding Apple TV was the idea of a "smart TV." The current Apple TV set top box brings much of the power of iOS to your TV by providing access to YouTube, Netflix, games, and your personal library. But the Apple TV has always been more of a side project for the company.

Back in April, Apple CEO Tim Cook announced that the company had plans to expand into the television market. He all but confirmed the existence of a true Apple television in the works.

"Apple doesn't do hobbies, as a general rule. We believe in focus and only working on a few things. With Apple TV, however, despite the barriers in that market, for those of us who use it, we've always thought there was something there," said Cook. "If we kept following our intuition and kept pulling the string, we might find something that was larger. For those people that have it right now, the customer satisfaction is off the chart. We need something that could go more main-market for it to be a serious category."

Apple famously revolutionized the music industry when it reached deals with music companies to sell individual tracks. Before iTunes, customers would have to buy an entire CD with 12+ songs just so they could listen to the one or two songs they really wanted. Steve Jobs and Apple changed all that.

Similarly, customers today have to pay for television. You can't just buy episodes of an HBO show, you have to buy HBO. And to buy HBO, you have to have an expensive cable plan. Apple wants to create more of an a la carte option for customers. Recalling his conversation with Cue, Hargreaves noted that Apple didn't want to break into the industry until it could "deliver content in a way that is different from the current multi-channel pay TV model."

To accomplish this, Apple could possibly do two things. First, it could do what it did with music and sell individual episodes of individual shows. You can buy TV episodes, even season passes, in iTunes, but you can't do it for every show. Or you could go the iOS route and have an app for each network. Users could then purchase the app, install it on their televisions, and buy the content directly from the network. For example, if CBS had an app on an Apple TV that gave users access to every show in their catalogue, you could pay for episodes of "The Big Bang Theory," but not "The Good Wife." You wouldn't have to pay for content you don't watch.

Earlier this month, Apple Insider reported that Apple was in talks with major television networks over how content could be delivered to views in the future. According to Hargreaves, those negotiations have broken down.

However, iTunes changed the music industry because charging $.99 for a song meant the industry could finally combat piracy. Customers want to get their content legally, but they also want it in their own ways - on their computers, iPads, and smartphones. If the television companies won't allow them, they are encouraging piracy.

Barclay Capital analyst Ben Reitzes believes that television networks will soon be forced to deal with Apple and embrace its business model. If they don't, they will have no way to monetize their content once piracy begins to shrink primetime audiences.

"Apple may hold the cards in being the only company that can fully monetize the small screen for big media companies," says Reitzes. "The risk of not partnering with Apple is that 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."

As the Wall Street Journal reported last week, Apple's vision for Apple TV involves blurring the line between live and on-demand television by letting people watch any show at any time. But any significant expansion of on-demand content as part of a cable subscription would threaten other revenue sources for the TV industry, such as Hulu Plus subscriptions or episode purchases on iTunes. (The Journal notes, for instance, that Apple wants all episodes of current-season TV shows included in a subscription, even as most cable providers limit their on-demand offers to the last few episodes.)

On top of all this, Apple would have to successfully negotiate with multiple cable companies, telcos, satellite providers and TV networks, or else its product launch would be limited in scope.

Why would TV networks and service providers, who both benefit from charging for a big bucket of channels, have any interest in changing their ways? No rumors seem to answer this question.

Eventually content will be available via an Apple-like model. But for now, the point goes to Hollywood. Apple TV is on hold indefinitely.