Apple Discusses Streaming-Television Service Partnership With Comcast
Apple’s (NASDAQ:AAPL) long-rumored successor to the current Apple TV product may finally be coming to fruition. According to “people familiar with the matter” cited by the Wall Street Journal, Apple is in talks with Comcast (NASDAQ:CMCSA) over the possibility of creating a streaming-television service that would bypass congestion caused by public Internet traffic.
The proposed service would offer users an on-demand television experience featuring live shows and full seasons of currently running programs. Apple would deliver the service through a revamped Apple TV product that would stream the video content from cloud storage.
Apple wants its proposed streaming-television service to be classified as a “managed service,” according to the Wall Street Journal’s sources. This would allow Apple to guarantee the quality of its video stream, since Comcast would transmit the service separately on a less-congested part of the network. Broadband providers won the right to treat managed services this way when a federal appeals court struck down key segments of the Federal Communications Commission’s Open Internet rules. This arrangement would presumably keep Comcast from violating the special “net neutrality” rules that were imposed on the company after it merged with NBC Universal in 2011. Netflix (NASDAQ:NFLX) CEO Reed Hastings recently criticized Comcast and other ISPs for their alleged anti-net neutrality behavior in a recent blog post after the company was forced to pay for a higher interconnection fee for its video-streaming service.
According to one of the Wall Street Journal’s unnamed sources, Apple and Comcast are still in the early phase of the talks and there are several obstacles that must still be overcome. Before the service could be worthwhile, Apple would need to acquire more television programming rights from content providers. Although Apple TV currently offers content from popular video-streaming services such as Netflix, Hulu, and YouTube, it still has few live programming options.