Apple's Attempt At A TV Revolution Runs Face First Into Comcast Corporation

from the the-TV-revolution-will-not-be-televised dept

For years now, media reports have suggested that Apple has dreamed of offering a disruptive broadband TV streaming service that rattles the status quo. The problem for Apple (and countless companies before it) has been that the broadcasters in charge of said status quo haven’t historically been willing to budge on the kind of flexible licensing needed to make this dream a reality. That has resulted in year after year of Apple TV service rumors that never materialize as Apple repeatedly ran face first into licensing negotiations. Similarly, cable operators, wary of Apple getting the same kind of power it now wields in the music industry and losing set top revenues, haven’t been keen on Apple’s proposals for Apple-made set top boxes.

Just about a year ago, the Wall Street Journal ran a story stating that Apple was in negotiations with Comcast regarding an internet TV service that would get priority over Comcast’s network. One year later, and a new Wall Street Journal report notes that while a new Apple TV service is finally slated to launch this fall (and the Apple rumor gods really, really mean it this time), it’s going to likely be without Comcast/NBC Universal content. Why? Apple insiders claim Comcast is stringing the company along to delay Apple while it focuses on its own efforts:

“For now, the talks don?t involve NBCUniversal, owner of the NBC broadcast network and cable channels like USA and Bravo, because of a falling-out between Apple and NBCUniversal parent company Comcast Corp., the people familiar with the matter said. Apple and Comcast were in talks as recently as last year about working together on a streaming television platform that would combine Apple?s expertise in user interfaces with Comcast?s strength in broadband delivery. Apple came to believe that Comcast was stringing it along while the cable giant focused on its own X1 Web-enabled set-top box, the people said.”

While what business arrangements Comcast engages in is of course the company’s prerogative, this sort of thing is certainly fodder for those worried about Comcast’s growing power post Time Warner Cable merger. Whether it’s raising rates on Netflix via interconnection, using NBC to withhold licensing agreements, imposing broadband usage caps or refusing to authenticate HBO Go on the Playstation 4, there are plenty of ways Comcast can constrict internet video’s growth — without running afoul of our new net neutrality rules.

Meanwhile, Apple’s pretty clearly realizing the company needs to ease off of its own (often draconian and bizarre) control demands if it’s going to get a foothold in the broadcast and TV industry, as the sort of success and control Apple enjoys in wireless simply isn’t going to be replicated in cable without some major concessions. Insiders suggest Apple’s willing to go the extra mile to get cable operators and broadcasters on board, including sharing more viewer data than Netflix traditionally does:

“The company is willing to share details on who its viewers are, what they watch and when they watch it to entice broadcast networks and others to go along with the service, sources said…Apple, which is known for tightly controlling its ecosystem, is taking a more hands-off approach with programmers, such as letting them decide whether they want to air ads. “They?re allowing a lot more decision-making by the content owner,” said one source familiar with the talks, adding that Apple has told potential partners, “It?s up to you, whatever you guys want to do.”

Despite a decade of the cable and broadcast industry fighting internet video tooth and nail, 2015 actually appears to be the year internet video gains meaningful traction anyway. Whether that’s through Dish’s Sling TV, HBO Now or Sony’s Playstation Vue, we’re finally starting to see some broader choices when it comes to TV packages and pricing. As for Comcast getting in the way of this progress, it’s very possible the FCC and DOJ may approve their merger but impose some conditions that they play nice. Of course whether those conditions are intelligent, meaningful or actually enforced is another question entirely.

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Companies: apple, comcast

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Comments on “Apple's Attempt At A TV Revolution Runs Face First Into Comcast Corporation”

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Anonymous Coward says:

Sometimes I’ve wondered why Comcast doesn’t attempt to go fully vertically integrated, from producing its own TV shows (NBC-Universal) to streaming them (Netflix-like clone) to building the *proprietary* televisions that operate on Comcast’s nation-wide cable service (once Comcast buys out all the other regional monopolies)

I’ve got to wonder if we might see that sort of thing, maybe 30 years from now, when a company like Comcast simply owns it all, from beginning to end, and any company that wants to do anything, from creating content to building hardware, must come to Comcast on bended knee — or be shut out completely.

Michael (profile) says:

Re: Re:

from producing its own TV shows (NBC-Universal) to streaming them (Netflix-like clone) to building the proprietary televisions that operate on Comcast’s nation-wide cable service

I would guess there are a few reasons for that, but so far, it hasn’t had to. All of the companies that do any of what you are talking about cannot manage to get it done with the Comcast blessing at this point. Why bother to try to get into something you may not be very good at when you can simply squeeze money out of the people that are good at it? They can keep risk low and pull in lots of cash this way.

Anonymous Coward says:

Re: Re: Re:

Why? Well, for one thing, the whole cash-flow system is upside down and backwards. Content producers should be paying cable companies to deliver their ad-packed shows, just as they pay broadcast towers to air them. Why is it that when a tv channel is transmitted over wire instead of air, the direction of payment is reversed? It makes absolutely no sense, except that it’s the way it has always been done.

A nation-wide cable tv company that produced it’s own content would have much additional leverage to not only force independent channels to offer their content for free (they already get paid for running ads), but force them to pay for the privilege of being carried on and distributed through the cable network, in the same way that they would have to pay a broadcast tower.

And of course a monopoly could charge monopoly prices. Being the sole gatekeeper, a super-sized cable company would have this power.

Nilt (profile) says:

The company is willing to share details on who its viewers are, what they watch and when they watch it to entice broadcast networks and others to go along with the service, sources said…Apple, which is known for tightly controlling its ecosystem, is taking a more hands-off approach with programmers, such as letting them decide whether they want to air ads. “They’re allowing a lot more decision-making by the content owner,” said one source familiar with the talks, adding that Apple has told potential partners, “It’s up to you, whatever you guys want to do.”

Wow, there’s not a chance I’d sign up for that service. Half the reason I don’t have cable now is because of the constant barrage of ads and invasive marketing such as direct mail sent by Comcast and their “partners”. Sure, Apple makes pretty good products, generally speaking. That doesn’t make the invasion into my personal viewing habits acceptable.

Anonymous Coward says:

Doomed from the start

platform that would combine Apple’s expertise in user interfaces with Comcast’s strength in broadband delivery

I laughed when I read this. I’m not sure which is a greater disservice to the product — Apple’s expertise in forcing users to use it the way Apple thinks you should use it (“You’re holding it wrong”) or Comcast’s “strength” in broadband (non)delivery.

Anonymous Coward says:

with this having been going on for god knows how long, including it stopping Apple previously, why the hell did it think it could get further this time? the Big boys in telephone and broadband have ruled what can be transmitted anywhere and everywhere in the USA since they came into being, just like Hollywood and the other industries have fucked up start up after start up to do with music and movie making and distribution. they refuse to allow anyone else to do it but refuse to do it themselves. hence we get this stagnation of development, not caused by the lack of ideas and technology, but caused by industries that are afraid of the future and the progress it brings. Apple’s only hope is to get some other distribution method but seeing as how it, like Google, sat back and allowed anything bad that can happen actually happen as far as broadcasting and distribution was/is concerned, they dont have any backing now. serves them rights!! and as for new laws? they only happen when the right amount of ‘campaign contributions’ have been distributed!!

John Fenderson (profile) says:

Re: Why can Apple share viewership info?

Because the law about video rental stores was specifically intended to apply solely to video rental stores. It was a “personal” law passed because a lawmaker was embarrassed when a video rental store disclosed his rental history. That law does not apply in any other context.

The bizarre effect of it is that the rental history from video rental stores has a higher level of protection than almost any other data.

Ninja (profile) says:

Aaah, when the spell turns against the wizard. Sweet karma.

The big conglomerates won’t let us have up to date content free of geo restrictions and stupid windows that easily. They could have embraced the model a decade ago already if they wanted but they are blind with their money milking machines and refuse to see that they can get an entire freaking Biblical flood if they make the content more accessible, restrictions free.

Anonymous Coward says:

Re: Re:

I can think of a lot of reasons to hate Comcast. But for better or worse at the end of the day they truly are a leader of the broadband industry. Outside of FiOS areas, they are almost always the fastest internet provider in their area by a significant margin. As a whole they are constantly upgrading and don’t leave their customers to rot on outdated infrastructure like nearly every major telco. And even though it may not seem like it, they really have come a longs ways in terms of reliability and service consistency. If you have ever experienced some of the other cable companies or DSL from the major telcos you would see that Comcast’s broadband is really not all that bad.

Karl Bode (profile) says:

Re: Re: Re:

“they truly are a leader of the broadband industry.”Sometimes. They’re pretty great on the engineering front when it comes to DNS security or IPV6 upgrades. But when it comes to customer service they’re undeniably the worst not only in the telecom industry — but according to rankings like the ACSI — across ALL industries.

Trying to get even basic screw ups fixed can often wind up as a Kafka-esque multi-month nightmare. That’s not exactly what I’d call leadership.

John Fenderson (profile) says:

Re: Re: Re: Re:

True, but the phrase in question is “broadband delivery”. On that narrow point, Comcast has been stellar in my personal experience. They suck so hard on every other point though, including customer service, that stellar broadband delivery isn’t enough to balance everything out. That’s why I would give Comcast an “F” overall.

Nomad of Norad says:

Remember the golden age of movie houses....

I can remember reading about how, way back in the golden age of movie theaters, well before I was born, that there used to be a situation that resembles this. In that case, the same corporation that owned all the big, lavish movie theaters also owned the major motion picture studios. Unfortunately, this meant that small, independent movie makers could not get their movies into any of the big theaters, because they were in direct competition to those who owned the major studios. Ultimately, the US government had to make it illegal for any motion picture company to also own movie theaters, and so they forced all the motion picture studios to divest themselves of all theater chains. From that point on, theaters had to be completely independent of the studios.

It is time we did something like that with these giant conglomerates. No company in the US should EVER be allowed to own both production studios AND television stations ever again. Also, no company should ever again be allowed to own both production studios AND streaming-internet TV-content services. This would mean that NBCUniversal would have to be split back up into NBC and into Universal Studios, and would also have to split off Comcast, too.

This is something that should have happened a long time ago, in fact, well before these companies ever could have gotten a chance to become so big and powerful that they could elbow, elbow, ELBOW their politicians into giving them privileges and power they don’t deserve, and/or stomp on the little guy Just Because.

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