Apple + Comcast = ?
Will a Comcast deal spell success for Apple TV?
Apple and Comcast are reportedly discussing a deal that would give Apple special access to Comcast's wires, the ones that bring cable TV into your home. According to the Wall Street Journal, Apple would then deliver streaming television through a set top box.
The deal, if it becomes a deal, would give Apple access to what's called "the last mile" -- the last section of cable that runs from a neighborhood box into individual homes.
"Apple would get what's called managed service access," says Kevin Werbach, a telecom consultant and professor of business ethics at The Wharton School of Business. "So their content would go over a distinct high-priority pipe across the Comcast network and not be mixed in with other internet traffic."
As you've probably noticed, the quality of video on your TV can vary greatly between traditional cable TV and streaming TV. Take Netflix, for example: lots of people had trouble streaming the new season of "House of Cards". So Netflix agreed to pay extra to Comcast for more bandwidth.
A managed service deal with Apple would be great for Comcast because it would allow the cable company to maintain its role as a gatekeeper for content, says Craig Aaron, president of Freepress, a consumer advocacy group.
"Apple should be a competitor with Comcast, Netflix should be a competitor with Comcast, helping bring down prices, offer more choices," he says. But under a managed service deal, Apple's content would have to go through the cable companies infrastructure, effectively turning Comcast's biggest threat into a source of revenue.
It also solves another problem for Comcast. Increasingly people are not signing up for cable. Instead, they are using apps and internet devices to watch video. A deal like this would also make Comcast relevant in the new media landscape.