
Apple in Talks with Comcast About Streaming-TV Service - ssclafani
http://online.wsj.com/news/articles/SB10001424052702303949704579457554242014552
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wikiburner
_" 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?

~~~
shock-value
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
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.

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encoderer
So, because Netflix and Youtube get the same deal to compete w/ Apple, it
somehow affects companies in the dropbox space?

I think there are a few things -- like video -- that are sensitive to latency
and need consistent bandwidth. Most things aren't like that. Dropbox
specifically was built to sync over slower connections.

I'm not sure how I feel about what Apple's doing here, but I know I feel
differently than you do about the implications.

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wikiburner
I guess you could quibble with Dropbox as an example (except when syncing with
a new device, or uploading a massive file to immediately transfer to another
device or share with others), but I don't think it changes my point at all.

In fact, it probably helps prove it by demonstrating the lengths U.S. startups
have to go to to work around the bandwidth congestion created by the cable
monopolies.

It also shows that the end of Net Neutrality will hurt innovation. Online file
storage didn't really take off until Dropbox came up with a way to work around
shitty bandwidth (as well as device interoperability). You claim that only a
handful of video startups would be affected, but I bet the real number is
probably in the hundreds or thousands, and many of those haven't yet had the
opportunity to build a userbase big enough to pay a bandwidth tax. There could
be countless other applications in VR, gaming, video, and who knows what other
sectors, that are held back because of the bandwidth situation in the U.S, and
an end to Net Neutrality would almost certainly make it worse.

------
DigitalSea
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.

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rodgerd
Indeed. This will be Apple's lever to make sure it never faces any credible
tech competitor in selling media again.

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bluedevil2k
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.

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ams6110
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
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.

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kodablah
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
Can't speak for any other sport, but the pirated stream options for the NHL
are absolutely impeccable.

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IBM
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
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?

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ianlevesque
Non-paywall link:
[https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...](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)

~~~
shmerl
Same paywall for me there.

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coreymgilmore
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-...](http://www.businessinsider.com/apple-talking-to-comcast-for-apple-
tv-2014-3)

Second note: you can load the google cached version of the story for free:
just search the story title.

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wmf
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.

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

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tibbydude
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 ???.

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msoad
Disable JavaScript if you want to read it for free.

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shmerl
Nothing DRM-free to expect. Next.

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lord_quas
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.

