Apple, Comcast, Netflix and The Last Mile
According to WSJ, Apple and Comcast are looking to become partners in the TV market with a service centered around Apple TV, a streaming box that will stream live TV and on demand content and bring the easy to use interface of Apple products to your TV.
To make sure that Apple’s video signal is transported to the customer in best quality, they’re trying to strike a “privileged access” deal with cable giant Comcast, which would assure that the “last mile” of traffic is kept clear for data on Apple TV. This would guarantee the same streaming quality whether a customer uses a Comcast Xfinity STB or Apple TV.
Should these two giants strike a deal, the home entertainment battlefield, which is populated by Sony (PS4), Microsoft (Xbox One), Amazon (upcoming Android Set-Top-Box) and Google (Chromecast) could see a true disruption. It seems realistic to assume that the winner needs to control hardware, content and bandwidth – and an alliance of Apple and Comcast would come pretty close to achieving that goal.
According to the article a deal is not even close because Comcast would have to shoulder investment into their network technology and Apple is demanding control over customer relationships and data. Making things more complicated are repercussions of the Comcast-NBCUniversal takeover regarding net neutrality.
In the meantime, on his blog, Netflix-CEO Reed Hastings is calling for more net neutrality and accusing Service Providers of cutting a raw deal for Netflix, the video streaming service responsible for nearly a third of peak downstream data traffic in the USA. Netflix subscribers are suffering from congestion, which causes buffering, waiting and poor video quality. These problems directly affect Netflix’s business.
Service Providers know this and are looking to charge fees for “preferred services” while they’re actively slowing down Netflix traffic. Hastings: “When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from.”
The battle is far from over and everyone is bringing out the big guns.