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Your next Apple TV could come from Comcast

Susie Ochs | March 25, 2014
We still don't know what Apple's long-rumored, near-mythical TV effort will look like, or exactly how it'll work, or what it'll cost, or whether it'll be a big enough improvement over today's status quo to really change the game. But on Sunday, The Wall Street Journal's anonymous sources gave us a glimpse at the deals being struck, claiming that Apple is working with Comcast on this TV of the future.

We still don't know what Apple's long-rumored, near-mythical TV effort will look like, or exactly how it'll work, or what it'll cost, or whether it'll be a big enough improvement over today's status quo to really change the game. But on Sunday, The Wall Street Journal's anonymous sources gave us a glimpse at the deals being struck, claiming that Apple is working with Comcast on this TV of the future.

Comcast customers everywhere likely groaned at this news and crossed Apple's not-yet-a-product off their imaginary Christmas lists. But Apple's partnered with an unpopular communication monstrosity before (remember AT&T's nearly four-year exclusive lock on a little item called the iPhone?), so it's possible that a Comcast-Apple partnership could work out. Or maybe not.

What's happening

According to the Journal's report, this device will likely be an Apple-branded set-top box that replaces your cable box and gets priority treatment on Comcast's network. Apple had been allegedly working with Time Warner Cable, which is now being swallowed by Comcast if the $45 billion proposed merger goes through. So it makes sense for Apple to continue those talks with Comcast, because partnering with a cable company could get Apple "managed service" status. Part of the "last mile" of the Internet pipeline from the cable ISPs to your house is reserved for the cable company's own managed services, including cable TV, video on demand, and VoIP. The rest of the pipe is for the public Internet, and with streaming video becoming more and more popular, that public bandwidth is getting more and more crowded.

After an appeals court struck down the FCC's net neutrality rules in January, ISPs like Comcast are legally able to prioritize some content over others. Netflix had to cut a deal with Comcast in February to improve the streaming experience over the public pipe for Comcast's customers, although that didn't stop Netflix CEO Reed Hastings from complaining about it after the fact, in a call to strengthen net neutrality rules. (The FCC has gone back to the drawing board to write new rules.) So Apple is wise to want to sidestep that whole kerfluffle and secure itself managed service status with Comcast, the nation's biggest ISP.

Why we're skeptical

The details of such an Apple-Comcast deal are still up in the air: Content rights and customer data were both mentioned by the WSJ article as sticking points. Apple wants to control the entire service, meaning users would log in with Apple IDs and Apple would own all the customer data. But Comcast wants to keep a tight handle on customer service and user data too.

Plus, Comcast is leaving it up to Apple to secure the content rights, and that could be even tougher, especially since, according to the WSJ, "Comcast would want to ensure that the price Apple has to pay to acquire rights wouldn't cause the service to be priced higher than traditional pay-TV service." Ryan Lawler at TechCrunch points out that many tech companies have tried and failed to roll out over-the-top TV services because they couldn't get enough content rights. Sony struck a preliminary deal with Viacom for an online pay-TV service last August, but we still haven't seen that service appear yet.

 

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