Apple is talking to Comcast about a partnership that would deliver a video streaming service to Apple TV users at guaranteed quality levels over the cable company's vast broadband network, according to a Wall Street Journal report.
According to the report, Apple Inc. (Nasdaq: AAPL) is keen to guarantee a high-quality live and on-demand TV/video service to those who buy its tiny set-top box, and can't rely on the best-effort nature of the public Internet. As a result, it is in talks to secure a guaranteed quality of service from Comcast Corp. (Nasdaq: CMCSA, CMCSK), which provides its cable services to more than 21 million US households.
The move is interesting for a number of reasons.
Apple has previously held similar talks with Time Warner Cable Inc. (NYSE: TWC), which is set to be acquired by Comcast. (See Is Apple TV the New Cable Channel?, Comcast Strikes $45B Deal for TWC, and Comcast-TWC Deal: Playing All the Numbers.)
Comcast has previously been somewhat reluctant to team up with the OTT players, so these talks signify a change in attitude for the cable giant.
The rumors also come as Netflix CEO CEO Reed Hastings calls for tighter net neutrality rules to protect US Internet video providers against the "tolls" imposed by large ISPs for service delivery interconnections with broadband networks. (See Netflix CEO Wants 'Strong' Net Neutrality .)
Deals between OTT players, such as Netflix and Apple, and the communication service providers (CSPs) are becoming increasingly popular, and hove proven successful for both parties in markets such as the UK, where Virgin Media Inc. (Nasdaq: VMED) was the first to offer the BBC's iPlayer service over its network and now offers Netflix as a dedicated channel to its cable customers with TiVo Inc. (Nasdaq: TIVO)-integrated cable boxes. (See Netflix to Spend Big, Strike Cable Deals in 2014 and Top European MSOs Embrace Next-Gen Video.)
— Ray Le Maistre, , Editor-in-Chief, Light Reading