The word is that Apple and Comcast are in talks about how to win the future of television. And that only makes sense. The two tech giants could really use each other’s help.
According to The Wall Street Journal, Apple is seeking what amounts to its own pipeline over Comcast’s cable internet service in order to funnel streaming TV to viewers without interference from other internet traffic. According to the Journal, Apple wants to provide both live and on-demand television via hardware that would effectively replace traditional cable TV.
This won’t happen anytime soon, if ever. The Journal says the discussions “are still in early stages and many hurdles remain.” The cost of network upgrades for Comcast and content licensing for Apple are two of the many complexities that could stymie a deal. But it’s strongly in the interest of both companies to work out the kinks, or at least give the appearance that they’re trying to. As the months keep ticking by without a new Apple product, and as Comcast struggles against a public image as a monopolistic leviathan, the two need each other. In the simplest terms, Comcast could really use Apple’s cachet, and Apple could really use Comcast’s network.
Why Comcast Needs Apple
For Comcast, the cord-cutting trend is impossible to ignore. While only a tiny number of viewers are ditching cable now in favor of internet-only TV options, pay-TV subscriptions actually fell in 2013. From Netflix and Amazon Prime streaming video to Dish Network’s planned internet TV option, younger viewers in particular know they have options other than a pricey subscription from a decades-old cable company. Anyone in the cable business now who believes the industry’s position is safe from cord-cutters risks sounding like the guy in 1995 who said the internet wouldn’t replace the daily newspaper.
Nothing could help Comcast stifle that cord-cutting momentum quite like a deal with Apple. Right now, Apple TV is a cord-cutting enabler. All you need is an internet connection — any ISP’s internet connection — to replace cable with on-demand services like Netflix, a company that is emerging as a major Comcast antagonist around net neutrality issues. A Comcast-backed Apple set-top box would give viewers the full cord-cutting experience while still ultimately tying them to Comcast’s network. Comcast is already working on its own internet TV options, but those in-house efforts will never match the value of Apple’s brand. As with AT&T when it was the only carrier offering the iPhone, Comcast could gain subscribers simply by becoming the only provider offering access to a new Apple product.
Why Apple Needs Comcast
And if there’s anything Apple needs now, it’s a new product. The Journal’s report is the latest in what has become an entire tech journalism subgenre of rumors and leaks around what Apple might do next. The prolonged product drought under CEO Tim Cook has led to Apple share-price stagnation and comparisons to Microsoft. The talks with Comcast highlight an important dimension of what’s taking Apple so long, and why Comcast could be so important to helping Apple out of its malaise.
For the duration of its resurgence starting in the late 1990s, Apple has defiantly shunned Silicon Valley conventional wisdom on product development. Apple is the opposite of a company that operates in the open, fails fast, and iterates. Instead, it works in secret, often for years, until it reaches the closest approximation of perfection it can manage. The result has been gadgets — iPod, iPhone, iPad — that felt both impossibly futuristic and timelessly inevitable.
But Apple can’t achieve the same kind of perfection for the future of TV without a lot of help. The Apple TV was never meant to be that future. It was just a way to get iOS onto a bigger screen, and a kind of appetizer to accustom viewers to thinking of Apple as a TV-connected brand. But to provide a truly transformative TV experience — the equivalent of switching from a feature phone to an iPhone — Apple needs to be able to promise a seamlessly immersive experience that makes any other way of watching seem obsolete. As with everything else the company does, Apple television wants to pull you so deep into its world that you’ll never feel like you can leave. But Apple likely doesn’t feel it can’t get that if its shows are sharing the same pipes clogged by every other data packet on the internet.
Yes, the internet shouldn’t work this way. All traffic should have enough bandwidth to flow unhindered, and no one should have to pay a toll. But the idea of a quasi-closed network resonates strongly with Apple’s overall product philosophy. The precedent such an arrangement might set wouldn’t be good for the internet. But it could be good for Apple.
Still, transforming TV the way the iPhone did cell phones is a massive undertaking involving everyone from Hollywood to the federal government. Someday, Apple could become the future of television. But in the meantime, it might want to get around to releasing that smartwatch.
Via The Wire.