9 ms·

Apple in Talks with Comcast About Streaming-TV Service

42 points by ssclafani 13y ago

msoad 13y ago
Disable JavaScript if you want to read it for free.
ianlevesque 13y ago
Non-paywall link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CDYQqQIwAA&url=http%3A%2F%2Fonline.wsj.com%2Fnews%2Farticles%2FSB10001424052702303949704579457554242014552&ei=Z4QvU9i3D5Hr0QHL9YGoDg&usg=AFQjCNGqZ0phTS0rcFQmkASnZTByV2ljTA&bvm=bv.63556303,d.dmQ https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
- shmerl 13y ago
  Same paywall for me there.
bluedevil2k 13y ago
If the streaming service comes with a typical Comcastic price of $80/month like their cable service, then this thing will be DOA. People don't want to pay a ton of money to watch 5% of the 500 channels you're forcing them to buy - they want to pay a reasonable price for only the content they care about. If this Comcast/Apple thing offered channels a la carte, the TV holy grail on my opinion, then it could be great. But, call me a pessimist to think that a cable company is forward thinking in any way, and not simply locked into their current and dying cash cow business model.
- ams6110 13y ago
  Live sports is another one. If I could buy ESPN, NBC Universal, and the Big Ten Network a-la carte, I wouldn't need any other cable stations. Netflix-style access for sitcoms and movies would be fine for the rest; currency is much less critical for those.
  - bluedevil2k 13y ago
    Along those lines, I found it was far cheaper to go to a sports bar and eat and drink beers every Sunday instead of getting Sunday Ticket.
    - skyebook 13y ago
      Hockey fan here. Good luck getting a bar to turn on the game when football is still on or baseball season is underway. Beyond that, some people just really don't like bar environments. (Or show me a sports bar where people are hanging out and watching a game + doing hackathons during the intermissions.. that would be unbelievably cool)
    - kodablah 13y ago
      Went on a bit of a tangent here...sorry. I hear this argument frequently. This is not a practical solution for those watching their favorite NHL/NBA teams 82+ games a year or MLB 162+ games a year. IIRC ESPN gets $6+ per subscriber-month and would greatly fear reprisal from cable providers if they offered a way to watch without a subscription. Due to the leagues' stranglehold over dissemination of their live events and major sports channels large budgets to pay them, there really is no end in sight for wannabe cord-cutters that want to watch their teams. There are three outcomes I foresee: 1. the status quo, 2. a company w/ deep pockets (Apple, Google, Netflix, etc) convinces a major sport to take their money, or 3. piracy of live sports streams becomes more reliable and easier to consume. #2 is possible but would still be a big gamble. I fervently believe the rise of bittorrent escalated alternative viewing options for non-live events, so I secretly am hoping for #3. All of the live pirated streams I have seen are horribly unreliable and seem to get shutdown with ease. I'm a software engineer, maybe I should make a live P2P streaming protocol! Can't put what I want on it due to living in the US and fear of prosecution, but maybe just the simplicity will help the industry.
      - selectodude 13y ago
        Can't speak for any other sport, but the pirated stream options for the NHL are absolutely impeccable.
- mikeryan 13y ago
  People don't want to pay a ton of money to watch 5% of the 500 channels you're forcing them to buy - they want to pay a reasonable price for only the content they care about Considering 85 million households in the US do this exact thing every month I'm going to go out on a limb and say you're incorrect in this assumption. If Apple can provide a better user experience for the same price I'm pretty sure you'll make a case for folks to switch.
- Touche 13y ago
  I don't understand why getting channels a la carte is "the TV holy grail". Just because you like one program doesn't mean you like the rest of what a channel shows. To me it's the same problem as paying for channels you don't like, just at a different scale. I want to pay for the programs I want. Which you can currently do, sort of. I just want to be able to do it for all programs. And I want discounts for paying in bulk (full season) and for paying in advance.
  - bluedevil2k 13y ago
    With Netflix, you're paying for the shows you don't watch. At some level, you're going to pay for things you don't want.
- tzs 13y ago
  A la carte might not actually save much money. There was quite a bit of discussion about this last year when Senator McCain tried to push for it legislatively. Some articles that discussed this and other issues related to bundling: http://money.cnn.com/2013/08/02/technology/cable-a-la-carte/ http://money.cnn.com/2013/08/02/technology/cable-a-la-carte/ http://www.slate.com/articles/business/moneybox/2013/05/mccain_s_la_carte_cable_bill_is_bad_deal_for_consumers.html http://www.slate.com/articles/business/moneybox/2013/05/mcca... http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/30/why-a-la-carte-cable-wont-save-you-as-much-as-you-think/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/30/w... http://priceonomics.com/the-couch-potato-subsidy/ http://priceonomics.com/the-couch-potato-subsidy/
IBM 13y ago
Take a moment and remember the state of TV today so we can avoid all the discussion about how "obvious" the TV experience is years from now.
- cromwellian 13y ago
  You mean, how Netflix innovated and showed everyone how it should be done? Or do you mean, when Apple buys their way into a collusive agreement with a monopoly provider giving them preferential access?
- shitlord 13y ago
  I'm pretty sure Google Fiber already has this
Sovietaced 13y ago
Why are you linking me to an article where I have to sign in?
wikiburner 13y ago
"Apple Inc. is in talks with Comcast Corp. about teaming up for a streaming-television service that would use an Apple set-top box and get special treatment on Comcast's cables to ensure it bypasses congestion on the Web, people familiar with the matter say." Wow, I can't believe how quickly and with such little fuss Net Neutrality was killed. Shouldn't it be highly controversial for Apple to be exploiting this situation?
- doctorshady 13y ago
  Maybe somebody will point that out. I doubt the average person keeps this on their mind often enough to put two and two together, though. I guess this was inevitable. If a business model is viable, someone is going to try and use it to their advantage. Whether it be Beats Music and AT&T Wireless' "toll-free data", or, well, Apple and Comcast.
- deleted 13y ago
  [deleted]
- shock-value 13y ago
  There are some subtleties that seem to make this situation different than Comcast's strictly prioritizing some internet traffic over others. Apple seems to want to use the part of the pipe usually reserved for cable VOD. Though perhaps you could argue that separating VOD from the internet portion of the pipe (which has been the case ever since VOD existed) is itself a violation of net neutrality principles.
  - wikiburner 13y ago
    As you mentioned, a lot of people already have a problem with cable companies' VOD getting preferential treatment, but I think it's an order of magnitude worse for cable companies to then lease out the VOD bandwidth they've carved out for themselves to the highest bidder. With this precedent set, Youtube, Netflix, and Amazon Prime could all end up paying a Comcast Tax to remain competitive with Apple. If that happens, all of a sudden there will be way fewer video or other high bandwidth startups, unless they're lucky enough to get sufficient VC to pay off the cable companies. No new Dropboxes or Vimeos. Also, I think this situation is fairly different than, say, Motorola manufacturing set-top boxes for cable companies. The Apple boxes will be sold in retail stores directly to the consumer, and are an attempt by Apple to create a Netflix/Roku killer. Apple paying a Comcast tax to gain competitive advantage seems to be a pretty clear violation of what Net Neutrality was all about.
DigitalSea 13y ago
Yet another streaming service that Australia won't get. But that is the least of my concerns, Apple signing agreements with providers like Comcast to guarantee speed is the start of something horrible. Apple are encouraging some very slippery slope behaviour if the rumours are to be believed. Before too long, we'll be seeing paid packages along the likes of; Priority Youtube Speed Pack $5.95 per month, Unlimited Google Searches $1.95 per month amongst others. I think this is the beginning of the end of net neutrality people buckle up, it's going to be a rough ride.
- madeofpalk 13y ago
  When iTunes store launched TV Shows, they signed deals with US companies to get their content. A year or two later, TV was available on the AU iTunes store, and shortly after with local content. I could only imagine these international deals would only happen quicker now that Apple has a much larger reach than before.
- deleted 13y ago
  [deleted]
- rodgerd 13y ago
  Indeed. This will be Apple's lever to make sure it never faces any credible tech competitor in selling media again.
coreymgilmore 13y ago
My question is this: Is Apply in talks to release something for the Apple TV? Or is this in preparation for a new device,; possible iTV? The article notes "set-top box" but that could just be lost in translation between the source and the writer and whomever is in between. Of note: here is a similar article not requiring the WSJ sign in: http://www.businessinsider.com/apple-talking-to-comcast-for-apple-tv-2014-3 http://www.businessinsider.com/apple-talking-to-comcast-for-... Second note: you can load the google cached version of the story for free: just search the story title.
lord_quas 13y ago
Apple Inc. AAPL +0.79% is in talks with Comcast Corp. CMCSA -1.20% about teaming up for a streaming-television service that would use an Apple set-top box and get special treatment on Comcast's cables to ensure it bypasses congestion on the Web, people familiar with the matter say. The discussions between the world's most valuable company and the nation's largest cable provider are still in early stages and many hurdles remain. But the deal, if sealed, would mark a new level of cooperation and integration between a technology company and a cable provider to modernize TV viewing. Apple's intention is to allow users to stream live and on-demand TV programming and digital-video recordings stored in the "cloud," effectively taking the place of a traditional cable set-top box. Apple would benefit from a cable-company partner because it wants the new TV service's traffic to be separated from public Internet traffic over the "last mile"—the portion of a cable operator's pipes that connect to customers' homes, the people familiar with the matter say. That stretch of the Internet tends to get clogged when too many users in a region try to access too much bandwidth at the same time. Apple's goal would be to ensure users don't see hiccups in the service or buffering that can take place while streaming Web video, making its video the same quality as Comcast's TV transmissions to normal set-top boxes. While devices such as Microsoft Corp.'s MSFT -0.42% Xbox gaming console and Roku Inc.'s set-top box have made some inroads in the TV industry, none offer the kind of fully formed TV service, with the guarantee of network quality, that Apple desires. Apple has spent several years exploring various avenues to enter TV, but it has been unable thus far to find business models that media companies and cable providers find appealing. Getting the support of Comcast would give Apple's plans a big boost. The companies share a common goal: advancing set-top box technology so that TV more closely resembles the easy-to-use apps and streaming-video services to which consumers are growing accustomed. Innovation is becoming a high priority for content-owners and operators amid pay-TV subscriber losses and fears that a younger generation of consumers will forgo paying for TV altogether. Apple and Comcast aren't close to an agreement, said one person familiar with the talks. Delivering the service quality Apple envisions would require Comcast to make significant investments in network equipment and other back-office technology, according to people familiar with Comcast's thinking. The companies also differ on how deep a relationship Apple should have with Comcast's customers. Apple has proposed that users would sign on to the new device using Apple login IDs, and it is interested in controlling customer data, the people familiar with the matter said. Apple also has asked for a cut of the monthly subscription fees paid by customers, these people said. Comcast wants to retain significant control over the relationship with customers and the data. Furthermore, Apple must acquire significant TV programming rights from media companies, one of the people said. 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, this person said. Apple has had discussions since at least mid-2012 with Time Warner Cable Inc., TWC -1.34% the No. 2 operator, people familiar with the matter said. Those talks, known internally at Time Warner Cable as "Project Jupiter," came to a standstill when the cable operator became a takeover target, the people said. Comcast in February agreed to acquire Time Warner Cable for $45 billion, a deal regulators are reviewing that would give Comcast a total of 30 million U.S. customers, after proposed divestitures. Under the plan Apple proposed to Comcast, Apple's video streams would be treated as a "managed service" traveling in Internet protocol format—similar to cable video-on-demand or phone service. Those services travel on a special portion of the cable pipe that is separate from the more congested portion reserved for public Internet access. People familiar with the matter said that while Apple would like a separate "flow" for its video traffic, it isn't asking for its traffic to be prioritized over other Internet-based services. Those distinctions are important because of merger conditions Comcast agreed to as part of its 2011 acquisition of NBCUniversal. Those "net-neutrality" restrictions, which will be in place through 2018, say Comcast cannot "unreasonably discriminate" in how it transmits network traffic. The Federal Communications Commission is in the process of drafting net-neutrality rules for the broadband industry after the U.S. Court of Appeals for the District of Columbia in January tossed out an earlier set of regulations the agency had in place. The FCC has signaled that its new rules will prevent Internet service providers from blocking or slowing down access to Web content providers that don't pay a toll. It isn't clear what approach the FCC will take to a situation in which a provider such as Apple wants enhanced treatment for a cloud-based service in partnership with an operator. The FCC also could consider net-neutrality proposals as part of its review of the Comcast-Time Warner Cable deal. Under the FCC rules the court struck down, broadband providers were allowed to treat managed services differently from public Internet traffic. The agency noted the potential risks, however, if broadband providers invest too much in specialized last-mile services but "constrict or fail to continue expanding network capacity" for the public Internet. Comcast could see value forming a partnership with Apple to add and retain customers. In addition, the Apple device likely would be sold at retail to customers rather than leased through the cable operator like a traditional set-top box—something that could reduce Comcast's capital expenditures over time, said one person familiar with the talks. At the same time, though, Comcast has been aggressively investing in and deploying its own Internet-connected set-top box and guide—dubbed "X1"— that far eclipses capabilities of its old boxes. To date, Comcast has limited the managed-video services it offers only to its own cable TV services. Apple's interest in separating its streaming-TV service from ordinary Web traffic highlights growing concerns in the media industry about the Internet's ability to handle the increasing consumer demand for online video. Netflix Inc. recently agreed to pay Comcast to directly connect to the cable provider's network to improve the quality of its streaming-video service. That "interconnection" deal was different from Apple's proposed approach in that it didn't address how Netflix's traffic would be treated over the "last mile" to households. The arrangement Apple is seeking could give it a leg up over other new entrants vying to offer online versions of pay-television service, such as Sony Corp. 6758.TO +3.47% , whose traffic would travel over the public Internet. Anticipation built about a breakthrough TV offering from Apple after founder Steve Jobs told biographer Walter Isaacson three years ago that he "finally cracked" a way to revamp the television. But Apple's only television product since then has been Apple TV, which offers users access to iTunes movies on the larger screen of a television as well as streaming video from Netflix, Hulu and other online services. There is some precedent to the kind of deal Apple is seeking with Comcast. The cable operator has a years-old relationship with TiVo Inc., TIVO -1.20% the DVR pioneer, which allows subscribers to receive Comcast TV service through TiVo boxes they buy at retail stores and, in some markets, with certain newer boxes access Comcast's on-demand library. Apple's proposal is different than TiVo's in that it has sought a share of customer fees and a deeper relationship with customers and content owners.
shmerl 13y ago
Nothing DRM-free to expect. Next.
wmf 13y ago
Here are the details from 2012 on Comcast's prioritization system that is used for Xfinity Xbox traffic: https://ber.gd/2012/05/13/comcast-traffic-prioritization/ https://ber.gd/2012/05/13/comcast-traffic-prioritization/ (discussion: https://news.ycombinator.com/item?id=3974259 https://news.ycombinator.com/item?id=3974259 ) I wouldn't be surprised if Apple is discussing using the same system.
tibbydude 13y ago
I see that Netflix want's to introduce more tiers in their pricing ... a bloody good idea so then they can tell their Comcast based subscribers how much extra they need to pay each month for quality service. Why must I as a non US based customer of theirs help fund the poor state of competition in the US broadband market ???.

42 points by ssclafani 13y ago

msoad 13y ago

Disable JavaScript if you want to read it for free.

Non-paywall link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CDYQqQIwAA&url=http%3A%2F%2Fonline.wsj.com%2Fnews%2Farticles%2FSB10001424052702303949704579457554242014552&ei=Z4QvU9i3D5Hr0QHL9YGoDg&usg=AFQjCNGqZ0phTS0rcFQmkASnZTByV2ljTA&bvm=bv.63556303,d.dmQ https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

shmerl 13y ago
Same paywall for me there.

bluedevil2k 13y ago

If the streaming service comes with a typical Comcastic price of $80/month like their cable service, then this thing will be DOA. People don't want to pay a ton of money to watch 5% of the 500 channels you're forcing them to buy - they want to pay a reasonable price for only the content they care about. If this Comcast/Apple thing offered channels a la carte, the TV holy grail on my opinion, then it could be great. But, call me a pessimist to think that a cable company is forward thinking in any way, and not simply locked into their current and dying cash cow business model.

ams6110 13y ago
Live sports is another one. If I could buy ESPN, NBC Universal, and the Big Ten Network a-la carte, I wouldn't need any other cable stations. Netflix-style access for sitcoms and movies would be fine for the rest; currency is much less critical for those.
- bluedevil2k 13y ago
  Along those lines, I found it was far cheaper to go to a sports bar and eat and drink beers every Sunday instead of getting Sunday Ticket.
  - skyebook 13y ago
    Hockey fan here. Good luck getting a bar to turn on the game when football is still on or baseball season is underway. Beyond that, some people just really don't like bar environments. (Or show me a sports bar where people are hanging out and watching a game + doing hackathons during the intermissions.. that would be unbelievably cool)
  - kodablah 13y ago
    Went on a bit of a tangent here...sorry. I hear this argument frequently. This is not a practical solution for those watching their favorite NHL/NBA teams 82+ games a year or MLB 162+ games a year. IIRC ESPN gets $6+ per subscriber-month and would greatly fear reprisal from cable providers if they offered a way to watch without a subscription. Due to the leagues' stranglehold over dissemination of their live events and major sports channels large budgets to pay them, there really is no end in sight for wannabe cord-cutters that want to watch their teams. There are three outcomes I foresee: 1. the status quo, 2. a company w/ deep pockets (Apple, Google, Netflix, etc) convinces a major sport to take their money, or 3. piracy of live sports streams becomes more reliable and easier to consume. #2 is possible but would still be a big gamble. I fervently believe the rise of bittorrent escalated alternative viewing options for non-live events, so I secretly am hoping for #3. All of the live pirated streams I have seen are horribly unreliable and seem to get shutdown with ease. I'm a software engineer, maybe I should make a live P2P streaming protocol! Can't put what I want on it due to living in the US and fear of prosecution, but maybe just the simplicity will help the industry.
    - selectodude 13y ago
      Can't speak for any other sport, but the pirated stream options for the NHL are absolutely impeccable.
mikeryan 13y ago
People don't want to pay a ton of money to watch 5% of the 500 channels you're forcing them to buy - they want to pay a reasonable price for only the content they care about Considering 85 million households in the US do this exact thing every month I'm going to go out on a limb and say you're incorrect in this assumption. If Apple can provide a better user experience for the same price I'm pretty sure you'll make a case for folks to switch.
Touche 13y ago
I don't understand why getting channels a la carte is "the TV holy grail". Just because you like one program doesn't mean you like the rest of what a channel shows. To me it's the same problem as paying for channels you don't like, just at a different scale. I want to pay for the programs I want. Which you can currently do, sort of. I just want to be able to do it for all programs. And I want discounts for paying in bulk (full season) and for paying in advance.
- bluedevil2k 13y ago
  With Netflix, you're paying for the shows you don't watch. At some level, you're going to pay for things you don't want.
tzs 13y ago
A la carte might not actually save much money. There was quite a bit of discussion about this last year when Senator McCain tried to push for it legislatively. Some articles that discussed this and other issues related to bundling: http://money.cnn.com/2013/08/02/technology/cable-a-la-carte/ http://money.cnn.com/2013/08/02/technology/cable-a-la-carte/ http://www.slate.com/articles/business/moneybox/2013/05/mccain_s_la_carte_cable_bill_is_bad_deal_for_consumers.html http://www.slate.com/articles/business/moneybox/2013/05/mcca... http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/30/why-a-la-carte-cable-wont-save-you-as-much-as-you-think/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/30/w... http://priceonomics.com/the-couch-potato-subsidy/ http://priceonomics.com/the-couch-potato-subsidy/

IBM 13y ago

Take a moment and remember the state of TV today so we can avoid all the discussion about how "obvious" the TV experience is years from now.

cromwellian 13y ago
You mean, how Netflix innovated and showed everyone how it should be done? Or do you mean, when Apple buys their way into a collusive agreement with a monopoly provider giving them preferential access?
shitlord 13y ago
I'm pretty sure Google Fiber already has this

Sovietaced 13y ago

Why are you linking me to an article where I have to sign in?

wikiburner 13y ago

"Apple Inc. is in talks with Comcast Corp. about teaming up for a streaming-television service that would use an Apple set-top box and get special treatment on Comcast's cables to ensure it bypasses congestion on the Web, people familiar with the matter say." Wow, I can't believe how quickly and with such little fuss Net Neutrality was killed. Shouldn't it be highly controversial for Apple to be exploiting this situation?

doctorshady 13y ago
Maybe somebody will point that out. I doubt the average person keeps this on their mind often enough to put two and two together, though. I guess this was inevitable. If a business model is viable, someone is going to try and use it to their advantage. Whether it be Beats Music and AT&T Wireless' "toll-free data", or, well, Apple and Comcast.
deleted 13y ago
[deleted]
shock-value 13y ago
There are some subtleties that seem to make this situation different than Comcast's strictly prioritizing some internet traffic over others. Apple seems to want to use the part of the pipe usually reserved for cable VOD. Though perhaps you could argue that separating VOD from the internet portion of the pipe (which has been the case ever since VOD existed) is itself a violation of net neutrality principles.
- wikiburner 13y ago
  As you mentioned, a lot of people already have a problem with cable companies' VOD getting preferential treatment, but I think it's an order of magnitude worse for cable companies to then lease out the VOD bandwidth they've carved out for themselves to the highest bidder. With this precedent set, Youtube, Netflix, and Amazon Prime could all end up paying a Comcast Tax to remain competitive with Apple. If that happens, all of a sudden there will be way fewer video or other high bandwidth startups, unless they're lucky enough to get sufficient VC to pay off the cable companies. No new Dropboxes or Vimeos. Also, I think this situation is fairly different than, say, Motorola manufacturing set-top boxes for cable companies. The Apple boxes will be sold in retail stores directly to the consumer, and are an attempt by Apple to create a Netflix/Roku killer. Apple paying a Comcast tax to gain competitive advantage seems to be a pretty clear violation of what Net Neutrality was all about.

DigitalSea 13y ago

Yet another streaming service that Australia won't get. But that is the least of my concerns, Apple signing agreements with providers like Comcast to guarantee speed is the start of something horrible. Apple are encouraging some very slippery slope behaviour if the rumours are to be believed. Before too long, we'll be seeing paid packages along the likes of; Priority Youtube Speed Pack $5.95 per month, Unlimited Google Searches $1.95 per month amongst others. I think this is the beginning of the end of net neutrality people buckle up, it's going to be a rough ride.

madeofpalk 13y ago
When iTunes store launched TV Shows, they signed deals with US companies to get their content. A year or two later, TV was available on the AU iTunes store, and shortly after with local content. I could only imagine these international deals would only happen quicker now that Apple has a much larger reach than before.
deleted 13y ago
[deleted]
rodgerd 13y ago
Indeed. This will be Apple's lever to make sure it never faces any credible tech competitor in selling media again.

coreymgilmore 13y ago

My question is this: Is Apply in talks to release something for the Apple TV? Or is this in preparation for a new device,; possible iTV? The article notes "set-top box" but that could just be lost in translation between the source and the writer and whomever is in between. Of note: here is a similar article not requiring the WSJ sign in: http://www.businessinsider.com/apple-talking-to-comcast-for-apple-tv-2014-3 http://www.businessinsider.com/apple-talking-to-comcast-for-... Second note: you can load the google cached version of the story for free: just search the story title.

lord_quas 13y ago

Apple Inc. AAPL +0.79% is in talks with Comcast Corp. CMCSA -1.20% about teaming up for a streaming-television service that would use an Apple set-top box and get special treatment on Comcast's cables to ensure it bypasses congestion on the Web, people familiar with the matter say. The discussions between the world's most valuable company and the nation's largest cable provider are still in early stages and many hurdles remain. But the deal, if sealed, would mark a new level of cooperation and integration between a technology company and a cable provider to modernize TV viewing. Apple's intention is to allow users to stream live and on-demand TV programming and digital-video recordings stored in the "cloud," effectively taking the place of a traditional cable set-top box. Apple would benefit from a cable-company partner because it wants the new TV service's traffic to be separated from public Internet traffic over the "last mile"—the portion of a cable operator's pipes that connect to customers' homes, the people familiar with the matter say. That stretch of the Internet tends to get clogged when too many users in a region try to access too much bandwidth at the same time. Apple's goal would be to ensure users don't see hiccups in the service or buffering that can take place while streaming Web video, making its video the same quality as Comcast's TV transmissions to normal set-top boxes. While devices such as Microsoft Corp.'s MSFT -0.42% Xbox gaming console and Roku Inc.'s set-top box have made some inroads in the TV industry, none offer the kind of fully formed TV service, with the guarantee of network quality, that Apple desires. Apple has spent several years exploring various avenues to enter TV, but it has been unable thus far to find business models that media companies and cable providers find appealing. Getting the support of Comcast would give Apple's plans a big boost. The companies share a common goal: advancing set-top box technology so that TV more closely resembles the easy-to-use apps and streaming-video services to which consumers are growing accustomed. Innovation is becoming a high priority for content-owners and operators amid pay-TV subscriber losses and fears that a younger generation of consumers will forgo paying for TV altogether. Apple and Comcast aren't close to an agreement, said one person familiar with the talks. Delivering the service quality Apple envisions would require Comcast to make significant investments in network equipment and other back-office technology, according to people familiar with Comcast's thinking. The companies also differ on how deep a relationship Apple should have with Comcast's customers. Apple has proposed that users would sign on to the new device using Apple login IDs, and it is interested in controlling customer data, the people familiar with the matter said. Apple also has asked for a cut of the monthly subscription fees paid by customers, these people said. Comcast wants to retain significant control over the relationship with customers and the data. Furthermore, Apple must acquire significant TV programming rights from media companies, one of the people said. 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, this person said. Apple has had discussions since at least mid-2012 with Time Warner Cable Inc., TWC -1.34% the No. 2 operator, people familiar with the matter said. Those talks, known internally at Time Warner Cable as "Project Jupiter," came to a standstill when the cable operator became a takeover target, the people said. Comcast in February agreed to acquire Time Warner Cable for $45 billion, a deal regulators are reviewing that would give Comcast a total of 30 million U.S. customers, after proposed divestitures. Under the plan Apple proposed to Comcast, Apple's video streams would be treated as a "managed service" traveling in Internet protocol format—similar to cable video-on-demand or phone service. Those services travel on a special portion of the cable pipe that is separate from the more congested portion reserved for public Internet access. People familiar with the matter said that while Apple would like a separate "flow" for its video traffic, it isn't asking for its traffic to be prioritized over other Internet-based services. Those distinctions are important because of merger conditions Comcast agreed to as part of its 2011 acquisition of NBCUniversal. Those "net-neutrality" restrictions, which will be in place through 2018, say Comcast cannot "unreasonably discriminate" in how it transmits network traffic. The Federal Communications Commission is in the process of drafting net-neutrality rules for the broadband industry after the U.S. Court of Appeals for the District of Columbia in January tossed out an earlier set of regulations the agency had in place. The FCC has signaled that its new rules will prevent Internet service providers from blocking or slowing down access to Web content providers that don't pay a toll. It isn't clear what approach the FCC will take to a situation in which a provider such as Apple wants enhanced treatment for a cloud-based service in partnership with an operator. The FCC also could consider net-neutrality proposals as part of its review of the Comcast-Time Warner Cable deal. Under the FCC rules the court struck down, broadband providers were allowed to treat managed services differently from public Internet traffic. The agency noted the potential risks, however, if broadband providers invest too much in specialized last-mile services but "constrict or fail to continue expanding network capacity" for the public Internet. Comcast could see value forming a partnership with Apple to add and retain customers. In addition, the Apple device likely would be sold at retail to customers rather than leased through the cable operator like a traditional set-top box—something that could reduce Comcast's capital expenditures over time, said one person familiar with the talks. At the same time, though, Comcast has been aggressively investing in and deploying its own Internet-connected set-top box and guide—dubbed "X1"— that far eclipses capabilities of its old boxes. To date, Comcast has limited the managed-video services it offers only to its own cable TV services. Apple's interest in separating its streaming-TV service from ordinary Web traffic highlights growing concerns in the media industry about the Internet's ability to handle the increasing consumer demand for online video. Netflix Inc. recently agreed to pay Comcast to directly connect to the cable provider's network to improve the quality of its streaming-video service. That "interconnection" deal was different from Apple's proposed approach in that it didn't address how Netflix's traffic would be treated over the "last mile" to households. The arrangement Apple is seeking could give it a leg up over other new entrants vying to offer online versions of pay-television service, such as Sony Corp. 6758.TO +3.47% , whose traffic would travel over the public Internet. Anticipation built about a breakthrough TV offering from Apple after founder Steve Jobs told biographer Walter Isaacson three years ago that he "finally cracked" a way to revamp the television. But Apple's only television product since then has been Apple TV, which offers users access to iTunes movies on the larger screen of a television as well as streaming video from Netflix, Hulu and other online services. There is some precedent to the kind of deal Apple is seeking with Comcast. The cable operator has a years-old relationship with TiVo Inc., TIVO -1.20% the DVR pioneer, which allows subscribers to receive Comcast TV service through TiVo boxes they buy at retail stores and, in some markets, with certain newer boxes access Comcast's on-demand library. Apple's proposal is different than TiVo's in that it has sought a share of customer fees and a deeper relationship with customers and content owners.

shmerl 13y ago

Nothing DRM-free to expect. Next.

wmf 13y ago

Here are the details from 2012 on Comcast's prioritization system that is used for Xfinity Xbox traffic: https://ber.gd/2012/05/13/comcast-traffic-prioritization/ https://ber.gd/2012/05/13/comcast-traffic-prioritization/ (discussion: https://news.ycombinator.com/item?id=3974259 https://news.ycombinator.com/item?id=3974259 ) I wouldn't be surprised if Apple is discussing using the same system.

tibbydude 13y ago

I see that Netflix want's to introduce more tiers in their pricing ... a bloody good idea so then they can tell their Comcast based subscribers how much extra they need to pay each month for quality service. Why must I as a non US based customer of theirs help fund the poor state of competition in the US broadband market ???.