“Netflix‘s stock has fallen more than 10% following reports that Apple is in talks with Comcast about a streaming service via Apple TV,” Trefis Team writes for Forbes. “Apple wants Comcast to offer a managed service that will ensure high streaming quality and bypass web congestion. Technically speaking, such distinction is recognized and does not overstep on net neutrality rules as Apple wants a separate route for its videos and not a preferential treatment on common public route.”
“Although the negotiations are still in early stages, a precedent has been set for a more competitive online streaming market in the future. This does not bode well for Netflix, which has managed to post impressive growth over the years, capitalizing on its early market entry and competitive advantage,” Trefis Team writes. “Not only does Apple have the capability to attract a large customer base, its entry will also push content prices up. Also, if its streaming standards surpass those of Netflix, the latter will face some serious challenge, assuming Apple prices its service competitively.”
“Apple has more than enough cash to pay for some juicy content deals, including exclusive and original content, which makes it a very dangerous competitor for Netflix,” Trefis Team writes. “While the company primarily makes money from hardware sales, its recent moves suggest it has ambitions of controlling digital content distribution as well.”
Read more in the full article here.
For the moment, Netflix has nothing to worry about. If Apple gets a better selection of movies for near the 7 bucks a month Netflix offers, then yeah.
As an Amazon prime member for shipping I also have access to their terrible movie streaming service but prefer to pay the extra 7 bucks a month for Netflix anyway.
I don’t know if Netflix should be worried about Apple, because for all we know, they are part of those negotiations.
However, Netflix should definitely be worried about Apple rumors.
“its recent moves suggest it has ambitions of controlling digital content distribution as well.”
Recent? Wasn’t the iTunes Music Store opened up more than a decade ago? There’s nothing recent about Apple’s desire and ambitions to make sure their users have content readily available.
Their original reason for getting into this market was because there weren’t any music services for Mac users “back in the day”. They all ran Microsoft DRM, which was Windows only.
Apple doesn’t jump into a market just because a competitor is doing it, they do it when it makes sense – and it makes the most sense when they want to keep their users satisfied.
wouldn’t Netflix benefit from a comcast deal? they have an app on the apple tv, and if the deal is for the box, it seems like all the app partners would benefit from the higher bandwidth. am I missing something?
I think these news reports are missing something. You’re not. You can only evaluate this by what’s reported. Cable TV operators want us watching their commercial filled content, not on demand services like Netflix with no ads.
Apple should find a way to partner with Netflix rather than compete with them. Since I bought an Apple TV in December 2010, I have spent more time watching shows on Netflix than on my over priced AT&T U-Verse service. Apple’s clout with the entertainment industry could go a long way to making Netflix even better. I would love to see TV go completely on demand. The challenge is to make that kind of model profitable for the owners and producers of the content. Of course “broadband” internet service in this country is a total joke, so even if TV service moved completely onto the internet, our internet service providers would find a way to make the experience suck.
I believe Netflix recently paid Comcast for better bandwidth, so how’s this Apple bandwidth issue any different?