Apple in talks with Comcast about streaming-TV service; companies discussing deal to bypass web congestion

“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,” Shalini Ramachandran, Daisuke Wakabayashi and Amol Sharma report for The Wall Street Journal. “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,” Ramachandran, Wakabayashi and Sharma report. “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.”

“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,” Ramachandran, Wakabayashi and Sharma report. “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 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., whose traffic would travel over the public Internet.”

Much more in the full article here.

[Thanks to MacDailyNews Readers “David E.,” “Dan K.,” “leesweet,” “AAPLcore,” “Lynn Weiler,” and “Fred Mertz” for the heads up.]


    1. No, and no. Comcast has no incentive to willfully slash its own profit margin. Comcast will merely offer different bundles and then advertise what a better deal you’re getting because now you’ll be able to choose from an additional 500 channels of brainless garbage.

      … and live sports will cost extra.

  1. I wonder if a key point in negotiations is: what happens when people record the television broadcasts? If we’re going through an Atv presumably you could connect the recording to iTunes and keep it forever. But that would threaten a whole host of revenue streams including Apple’s own in iTunes. This, the functionality I hope for seems destined not to materialize. TV’s going to be a pita for a long long time methinks.

    1. You raise some important concerns, however they’re based on past practices and hardware.

      Apple has new products in the pipeline that will require the cable companies cooperation going forward.

      When Steve jobs was developing content delivery strategies for music and video, they also involved a number of “last mile” scenarios that were dependent on third parties and future technologies and services not yet in existence.

      Apple sees in their future several opportunities, of which many third parties don’t even know they have a role.

      A good example is when Apple approached AT&T about a cell phone deal, which at the time seemed trivial and insignificant but made AT&T’s hair stand up because they saw the future through Steve Jobs’ eyes and they wanted an exclusive deal, even before knowing it would have much impact at all.

      If and when Apple approaches a third party about a deal, their stock rises on the rumor and consider themselves as hitting the lottery.

    1. actually there are packages that don’t include sports and give you better internet. check out their “blast plus” package. it gives you 45 channels , no sports, but you get 50mbps internet for about $60

  2. This makes sense. I have these comcast hd adapters on my HDTV’s that are no bigger than an Apple TV. i always thought it would make more sense to combine the two. if that were to happen, you would not need to find your tv’s original remote to change the input to access Apple TV. there would just be an Apple TV button on remote and the Apple TV UI would popup over the comcast broadcasts

  3. 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.

    “Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, although that fact may be concealed, with the specific intent to engender continual patronage for this party. A prototype is the protection racket, wherein a person or group indicates that they could protect a store from potential damage, damage that the same person or group would otherwise inflict, while the correlation of threat and protection may be more or less deniably veiled, distinguishing it from the more direct act of extortion.”

    Don’t pay their blood money Apple. Don’t pay.

    1. “Yo Timmy, c’mon over heeer”… sees, we got a great deal for your little grocery store heeer… pays me every week and me and my boys over der will make sure your delivery truck doesn’t suffer no unfortunate delays…capice? We really likes you Timmy, wouldn’t want nuthin’ to happen to your apples, use got it paisan? Just gimme you weekly dues Timmy and we takes reeel good care of you. Thank me Timmy? Fuget about it!!”

    2. Between the thought and the deed you arrived at, “Don’t pay their blood money Apple. Don’t pay.”

      Why don’t we give Apple a little credit before jumping to specious conclusions.

      Admit it, you said the same thing about Apple when they teamed up with the music industry to bring music to iPod & iTunes, or movies and television to TV from the film & television industries.

      You’re conflating what “people familiar with the matter say” and your cut & paste from Wiki’s definition of Racketeering to proffer some silly notion this process is not only criminal, but blood is involved?

      You shot your wad prematurely. Why don’t we wait and see if this in fact the truth or just another of WSJs attempts to garner page views at Apple’s expense.

  4. The attraction of cord cuttings getting away from the cable cartel- Comcast is the prime member.

    There is a very short list of channels or programs that I watch and it chaps my ass that I am required to subsidize 200 channels of bullshit that I have no interest in to get a few channels. Why exactly is it that I must buy a huge list of lowest common denominator crap in order to pay even more for HBO, Showtime, Cinemax, etc.

    Let me pay for what I want and not one thing more- that is a real free market. Under such a model about 3/4ths of the channels now on would shutter within 90 days or recast their channels entirely.

  5. Point:
    -IF- our lazy ass, cheapskate, customer abusing, money gouging, money hogging biznizz bozo ISPs/Cable/etc companies DID THEIR JOB and created adequate bandwidth, as they PROMISED…
    If the FCC wasn’t a corrupt bag of cow excrement
    -THEN- this ‘web congestion’ problem would not exist.

    But scum will be scum. Screw Thy Customer.

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