Getty ImagesApple is talking to Comcast about using Apple TV as a cable box that streams video, according to a new report from Shalini Ramachandran, Daisuke Wakabayashi, Amol Sharma at the Wall Street Journal.The talks are still in preliminary stages, and seem uncertain to happen. The WSJ says, 'Apple and Comcast aren't close to an agreement.'
Apple has been exploring the TV market for years.
In 2010, Steve Jobs explained the problem with the TV market, saying, 'There isn't a cable operator that's national, there's a bunch of operators. And it's not like there's GSM, where you build a phone and it works in all these other countries. No every single country has different standards. It's very 'tower of babble-ish', no, that's not the right word. Balkanized. It's very balkanized'
Tonight's WSJ story illustrates this connundrum very well.
Apple appears to have a vision for how to deliver an Internet-based TV service. It would store content in the cloud. It would be live, and on-demand. Presumably, it would have a simple, gorgeous interface that's easy to use.
But Apple, even with $146 billion in cash, can't just go out and do this on its own. It has to work with Comcast because Comcast delivers Internet and TV to millions of people in the U.S.
Say Apple wanted to pay TV networks for rights to shows, just like Comcast pays TV networks. Apple would still have to run its Internet-based TV service through Comcast's Internet service. That could lead to choppy service if Apple didn't pay Comcast extra, just like Netflix recently paid Comcast.
That means Apple has to pay a ton of money to get TV rights, then more money to Comcast, then it has to charge users, and it ends up as a low-margin, pain-in-the-rear business for Apple.
As a result, you end up with what the WSJ is reporting tonight:
Apple wants to get 'special treatment' from Comcast so that its Internet-based video streams don't encounter the same sort of congestion that other Internet content would hit, according to the WSJ. Apple doesn't want any users bumping into buffering or streaming issues. To deliver a high quality Internet-based TV service, Comcast would have to invest in its own network. Comcast subscribers who get their television service through an Apple TV would log-in using an Apple ID, the same Apple ID people use for buying apps and music from Apple. Comcast isn't thrilled with the idea of Apple controlling its customers. Apple would seek a cut of the subscription revenue from Comcast subscribers. Apple has to secure rights from TV networks to do a service like this, says the WSJ.
The whole thing sounds messy and complicated. It also seems like a relatively small business for Apple.
Why would Comcast agree to this? It probably won't. But, the WSJ says there is a fear that it's continuing to lose subscribers because people don't want to pay for TV. Teaming up with Apple, which has a track record of delivering high quality, addictive consumer products, would keep people paying for TV from Comcast.
Posted by Unknown on Sunday, March 23, 2014 - Rating: 4.5
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