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.
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.
Hockey fan here. Good luck getting a bar to turn on the game when football is still on or baseball season is underway.
Beyond that, some people just really don't like bar environments. (Or show me a sports bar where people are hanging out and watching a game + doing hackathons during the intermissions.. that would be unbelievably cool)
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.
In the UK at least I think its only a matter of time before either google or apple but in a huge bid for the premier league TV rights. It would give them huge penetration for there TV offerings almost over night.
Sports is perhaps the most critical issue in cable pricing. A large percentage of cable subscription costs are due to the exorbitant cost of licensing sports networks like ESPN, who, in turn, pay a fortune to license leagues and teams.
Basically, a lot of non-sports fans have to pay a fortune for sports, whether they watch sports or not. Sports fans have to pay more and more for sports, as local teams (and regional sports networks) demand billions for their broadcasting rights. On the whole, live sports is probably the one category keeping cable in business. But it's getting so expensive as to threaten the whole model.
Shameless plug, but I wrote about this topic recently for Slate. My prediction is that certain providers (cable or otherwise) will try to unbundle sports from non-sports in order to offer extremely low-priced service to non-sports fans. Meanwhile, cable networks and providers will cater more and more of their business to sports fans.
ESPN costs ~$5/subscriber/mo. per that article, and it's, as you mention, a huge outlier. Cable bundles often cost in the $80 to $100 range. I'm no fan of bundles, but I think the cable companies themselves (and specifically their lack of competition) are bigger factors in their prices than channels' subscriber fees.
P.S.: The medium article says, "Hockey, NASCAR, and soccer are the only major sports that ESPN doesn’t own". ESPN doesn't "own" the NFL (most of which is on CBS and Fox) or Major League Baseball (most of which is on regional sports channels, the majority of those in turn owned [I think] by Comcast and Fox). A small point maybe, but it hurts overall credibility.
The Medium article is fairly accurate on the whole, with maybe a few minor inaccuracies here and there. Its word choice in "own" is unfortunate in that circumstance, but I don't believe the author actually intended to suggest that ESPN "owns" the NFL, the MLB, etc. Reading the rest of the article, I get the general impression that he knows what he's talking about. At least on a high level, if not necessarily 100% of the minutiae.
In my article (the Slate one), I state that ESPN was an outlier -- but that everyone else sort of recognized as much, then wanted in on the action. Nowadays, RSNs (regional sports networks) have fees as high as, and in some cases higher than, ESPN and its sister networks.
"I think the cable companies themselves (and specifically their lack of competition) are bigger factors in their prices than channels' subscriber fees."
It's a very significant factor. So is the lack of competition among the networks licensing to the cable companies. So is the lack of competition within the major sports leagues. So is the lack of competition within any given city for any given sports franchise. In general, you've got an agglomeration of oligopolistic markets -- resulting in a sort of "powers-of-ten" [1] increase, at every step of the value chain, in programming costs. The consumer is left footing most of these bills.
[1] I use "powers of ten" here in the metaphorical sense of that old science video, and not in the literal sense.
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
Considering 85 million households in the US do this exact thing every month I'm going to go out on a limb and say you're incorrect in this assumption. If Apple can provide a better user experience for the same price I'm pretty sure you'll make a case for folks to switch.
I don't understand why getting channels a la carte is "the TV holy grail". Just because you like one program doesn't mean you like the rest of what a channel shows. To me it's the same problem as paying for channels you don't like, just at a different scale.
I want to pay for the programs I want. Which you can currently do, sort of. I just want to be able to do it for all programs. And I want discounts for paying in bulk (full season) and for paying in advance.
A la carte might not actually save much money. There was quite a bit of discussion about this last year when Senator McCain tried to push for it legislatively. Some articles that discussed this and other issues related to bundling:
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?
"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?
Maybe somebody will point that out. I doubt the average person keeps this on their mind often enough to put two and two together, though.
I guess this was inevitable. If a business model is viable, someone is going to try and use it to their advantage. Whether it be Beats Music and AT&T Wireless' "toll-free data", or, well, Apple and Comcast.
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.
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.
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.
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.
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.
When iTunes store launched TV Shows, they signed deals with US companies to get their content. A year or two later, TV was available on the AU iTunes store, and shortly after with local content.
I could only imagine these international deals would only happen quicker now that Apple has a much larger reach than before.
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.
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&qu...
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 ???.
38 comments
[ 0.22 ms ] story [ 103 ms ] threadBeyond that, some people just really don't like bar environments. (Or show me a sports bar where people are hanging out and watching a game + doing hackathons during the intermissions.. that would be unbelievably cool)
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.
Basically, a lot of non-sports fans have to pay a fortune for sports, whether they watch sports or not. Sports fans have to pay more and more for sports, as local teams (and regional sports networks) demand billions for their broadcasting rights. On the whole, live sports is probably the one category keeping cable in business. But it's getting so expensive as to threaten the whole model.
Shameless plug, but I wrote about this topic recently for Slate. My prediction is that certain providers (cable or otherwise) will try to unbundle sports from non-sports in order to offer extremely low-priced service to non-sports fans. Meanwhile, cable networks and providers will cater more and more of their business to sports fans.
http://www.slate.com/articles/business/the_bet/2014/03/local...
Some other good write-ups on this topic:
https://medium.com/off-the-field/1d7043ed024b
http://priceonomics.com/the-couch-potato-subsidy/
P.S.: The medium article says, "Hockey, NASCAR, and soccer are the only major sports that ESPN doesn’t own". ESPN doesn't "own" the NFL (most of which is on CBS and Fox) or Major League Baseball (most of which is on regional sports channels, the majority of those in turn owned [I think] by Comcast and Fox). A small point maybe, but it hurts overall credibility.
In my article (the Slate one), I state that ESPN was an outlier -- but that everyone else sort of recognized as much, then wanted in on the action. Nowadays, RSNs (regional sports networks) have fees as high as, and in some cases higher than, ESPN and its sister networks.
"I think the cable companies themselves (and specifically their lack of competition) are bigger factors in their prices than channels' subscriber fees."
It's a very significant factor. So is the lack of competition among the networks licensing to the cable companies. So is the lack of competition within the major sports leagues. So is the lack of competition within any given city for any given sports franchise. In general, you've got an agglomeration of oligopolistic markets -- resulting in a sort of "powers-of-ten" [1] increase, at every step of the value chain, in programming costs. The consumer is left footing most of these bills.
[1] I use "powers of ten" here in the metaphorical sense of that old science video, and not in the literal sense.
Considering 85 million households in the US do this exact thing every month I'm going to go out on a limb and say you're incorrect in this assumption. If Apple can provide a better user experience for the same price I'm pretty sure you'll make a case for folks to switch.
I want to pay for the programs I want. Which you can currently do, sort of. I just want to be able to do it for all programs. And I want discounts for paying in bulk (full season) and for paying in advance.
http://money.cnn.com/2013/08/02/technology/cable-a-la-carte/
http://www.slate.com/articles/business/moneybox/2013/05/mcca...
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/30/w...
http://priceonomics.com/the-couch-potato-subsidy/
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?
I guess this was inevitable. If a business model is viable, someone is going to try and use it to their advantage. Whether it be Beats Music and AT&T Wireless' "toll-free data", or, well, Apple and Comcast.
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.
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.
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.
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.
I could only imagine these international deals would only happen quicker now that Apple has a much larger reach than before.
Of note: here is a similar article not requiring the WSJ sign in: http://www.businessinsider.com/apple-talking-to-comcast-for-...
Second note: you can load the google cached version of the story for free: just search the story title.
Why must I as a non US based customer of theirs help fund the poor state of competition in the US broadband market ???.