Ahead of the launch of the much-anticipated Apple’s online TV service, Comcast announced a beta test of its new streaming cable service called Stream. The new service requires no extra device or additional equipment… or even a TV.

With Stream, Xfinity internet customers can watch live TV or on demand content from about a dozen networks – including all the major broadcast nets and HBO – on laptops, tablets and phones in their home.

It includes thousands of on demand movies and shows to watch home or away and even comes with access to TV Everywhere and a cloud DVR so you can record all your favorites and watch them later.

Stream will be available to Xfinity Internet customers for $15 per month. Comcast is launching the service in Boston at the end of the summer and they will take it to Chicago and Seattle next, with plans to make it available everywhere in their footprint by early 2016.

The Wall Street Journal reported back in March that Apple was planning to launch its own online television service that would include about 25 channels from broadcasters such as ABC, CBS and Fox and would be available on Apple TV as well as on iPhone and iPad.

Apple Web TV service is expected to be priced at $30/$40 per month and it’s reportedly scheduled to be launched in September.

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Apple has been long rumored to be in talks with Time Warner Cable for a deal regarding streaming of their cable content. Instead of talking directly with individual channels and content owners for copyrights, a partnership with Time Warner was supposed to streamline the process, and sounded sensible too. In the light of recent events, is Apple closer or further from that deal?

First of all, Comcast is (probably) buying Time Warner. Yes, and that too for a whopping 46 billion. As such, any half talks that might have taken place between Apple and TWC are now void and things have to be started again (Apple – Comcast talks) from square one, for any deals to even show up in the horizon.

Secondly, Time Warner has recently made a deal with Fanhattan’s Fan TV. A $99 Fan TV box has finally gone into pre-order and Time Warner is confirmed to be carrying the device. Fan TV supports both cable channels as well as internet content, aiming to be the “ultimate living room hub.”

Although the fate of Apple TV – TWC cooperation seems to be under clouds for the time being, the greatest silver lining is that Apple might end up making a deal with Comcast and eventually make things even easier, as WSJ reported last month.

The TWC – Fan TV deal could also serve for Time Warner as a test and be a first step to do a similar deal with Apple.

Or based on some rumors that future Apple TV will have support for both cable and online content, I wouldn’t be surprised if Apple acquires Fan TV itself.

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Over the weekend, the WSJ reported that Apple and Comcast are working on a deal to streamline the use of Apple TV to Comcast users, where Comcast would provide the bandwidth to the device via a different ‘channel’, allowing the Apple TV content to be protected from the buffering and quality issues that plague other video services relying on the public internet. This is in sharp contrast to the recent Netflix-Comcast deal, whereby Netflix is directly paying Comcast for bandwidth to Comcast’s customer base.

There are three fundamental issues that come into play with delivering cable television to the home, and this type of arrangement between Apple and Comcast could end up being mutually beneficial in each of these areas.

‘The Pipe’

The capabilities and options to deliver TV to the home depend largely on the infrastructure in place. The historical approach to video was to deliver an analog ‘broadband’ connection, where all TV channels are simultaneously transmitted to every home. The intelligence of which channel to display from that stream of all channels was left to the STB – set top box – that connects the TV to the cable network. In order for advanced services like time-shifting or pay-per-view to function in this type of environment, the majority of the intelligence was sitting on top of the customer television set.

As digital cable has expanded and become ubiquitous, the supporting infrastructure has evolved. In systems like AT&T’s U-Verse, the ‘full stream’ of cable channels are no longer sent to the home simultaneously. Instead, only the channels being watched or recorded are sent, down the same pipe that the home internet uses. The difference is that a portion of this bandwidth is reserved for the ‘TV’ portion of the traffic, and is protected from bittorrent, Netflix, and other internet traffic.

With Netflix using approximately 1/3 of all internet traffic, this becomes a huge sticking point for them to grow. A single Netflix HD stream uses approximately 7 Mb/s of bandwidth, and this bandwidth comes out of the customer’s ‘pool’ of bandwidth. Assuming Apple delivers similar quality, Comcast could colocate the servers delivering this content directly on their network and provide this bandwidth over their reserved ‘TV’ bandwidth, guaranteeing this bandwidth available to their customers regardless of whether or not everyone else in the neighbourhood is streaming Netflix or going crazy on bittorrent.

In order for Netflix to deliver a consistent and high-quality experience to their customers, they have decided to compensate Comcast directly for their bandwidth usage, and provide direct connections from their servers into the Comcast network, but their bandwidth is in no way guaranteed, and can and will be impacted by the number of simultaneous users and what they are doing.

This does bring up some interesting questions around net neutrality. However, it is not unreasonable to think that Comcast has an obligation to their customers to deliver a quality television experience, and providing reserved bandwidth is likely the only way to accomplish this. As long as the rest of their internet traffic isn’t filtered or prioritized in a way that unfairly punishes or rewards competitors, they may be able to steer clear of these issues since their customers are paying for television service as a separate, although bundled, service.

 ‘The Smarts’

With the cable companies acting like the slow-moving behemothly monopolistic utilities they are, companies like TiVo came to help give the end user a more intelligent and capable experience. This was a requirement in the old days of analog cable and over-the-air television, and has largely remained in place today. Even in the case of smarter television systems, the hard drive storing the buffered television usually sits in the STB. Really advanced systems can share this hard drive between different receivers, but the intelligence is still contained in the home.

This is not an ideal situation for anyone for many, many reasons. Hard drives fail, people don’t provide a clean, temperature-stable environment for the hardware, and the traditional vendors haven’t always prioritized end-user experience, or even been able to spell end-user experience, leading to a very frustrating customer experience.

For Comcast, the concept of having their end-user experience defined by Apple may be appealing. Apple has created a device that is inexpensive at $99, and that could conceivably provide a much better user experience than what exists today. The biggest problem with the Apple model is that it relies on a very intelligent cloud to deliver the content, and the cable companies have historically operated on the exact opposite of this model.

For Comcast to replace their user experience with Apple TV, they would have to create a very significant internal server infrastructure to deliver live content to millions of users. Luckily, the migration to digital and intelligent television has already accomplished a significant amount of this upgrade, but the DVR/time-shifting capabilities still primarily exist in the home today, and this capability would have to be moved to Comcast’s data centers.

When looking at the infrastructure Apple has been investing in for their content delivery networks, a reasonable theory to consider is that they may be preparing either a reference infrastructure for the cable companies or even preparing to host a significant amount of the infrastructure themselves, and just put in a pipe to the cable providers’ networks.

‘The Content’

Most of the recent rumors and discussions on Apple’s difficulties in entering the home TV market have centered around content contractual issues, and with good reason. The cable companies have used every legal option at their disposal to maintain their stranglehold monopoly over their users. One of the most effective ways of doing this is to “own” the content and channel broadcast rights for their user base. These contractual ties are so tight that as many content providers have created iOS, Apple TV, and Android apps, they are only available with full functionality to cable subscribers.

While this is likely not a viable long-term strategy to stop the ‘cord-cutters’, it certainly is a significant impediment to going cable-free in the short term. If you enjoy broadcast television, premium cable, or nearly any sporting events, you must have a subscription to cable TV to legally view the content through the network’s own applications.

By partnering with the cable companies, Apple sidesteps this issue for the time being. If Comcast is ‘just another app’ on the Apple TV, THEY are responsible for the contractual obligations, and they already likely have all of the necessary rights. Nothing in the Apple TV ecosystem is fundamentally that different from how cable content is delivered today, and will likely fall within the current contracts or require minimal changes.

Long-term, it is likely the content providers will move more ‘upstream’ and the premium channels will market directly to their consumers like Netflix does today, but that is many years and many contract renegotiations away. Today, cable is the in the driver’s seat.

The Biggest Winner: Everyone

Comcast wins because their customers get a better user experience, and they are paid whether the user is watching their cable content, a movie on Netflix, or buying a movie on iTunes.

Apple wins because they own the living room, which is all they really want in the first place.

Netflix wins because every home with an Apple TV installed, they have another device with their app available.

This may be the wave of the future, and the biggest losers would be the current STB providers. Based on how terrible their products are, will anyone care?

Also read:

• Will Apple TV 4 come with Comcast subscriptions?
• Opinion: How Apple can improve the TV experience without the “TV”
• Opinion: Where is Apple taking the TV in 2014?

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Looks like the rumor mill just can’t get enough of Apple TV. This time, the speculations are on a deal between Apple and Comcast to bring channels from the US largest cable TV network to the Apple TV. And as per analysts, Apple TV 4 might be the first one to feature the same.

We infer from the report on The Wall Street Journal that Apple wants to add a new Comcast hub on Apple TV, where users would be able to sign up for a subscription and stream all the live and on-demand content from them. Apple will of course keep a cut from the fee.

The other half of the speculations show that Apple has asked Comcast for a “special treatment” for the content flow to Apple TV devices – a separate set of fibers would broadcast specifically to Apple’s set-top boxes, thereby bypassing the congestion of the normal cables with overloaded bandwidths.

Under the plan Apple proposed to Comcast, Apple’s video streams would be treated as a “managed service” traveling in Internet protocol format – similar to cable video-on-demand or phone service. Those services travel on a special portion of the cable pipe that is separate from the more congested portion reserved for public Internet access.

The report suggests that the discussions are still in the most primitive stages and that means, there is a high chance that this tie-up, if any, will flow into the drain to join hundreds of others. Even if these rumors are true and Apple & Comcast figures out a deal, the Comcast zone for Apple TV would still be a long time away, thanks to the huge cable upgrades and multitude of copyright signatures involved.

Also read: Where is Apple taking the TV in 2014?

So here’s what we think. The first part of the rumor might indeed be true. Apple has been working on making Apple TV the king of living rooms for quite sometime now and adding the traditional cable channels along with what they’ve to offer, seems to be a great first step. That does sound like something Apple would do.

But the other part – on preferential streaming to Apple devices – is very unlikely. Such a provision would be in direct conflict to the net neutrality norms and Apple who likes to boast about ethics on every ad and keynote, would rather skip it. Here is an elaborate critical look into the rumor by GigaOm.

All that being said, we wouldn’t count on Apple-Comcast deal, despite what many bloggers have been saying. There’s a lot to be accomplished between a successful talk and a successful implementation and the time frame given for the Apple TV 4 launch by the most recent rumors isn’t generous enough for that.

Update: Dan Rayburn at StreamingMedia: “From sources I have spoken to, no such deal between Apple and Comcast is being considered today, the way the WSJ describes it. Apple routinely has discussions with all the major content owners but Apple is not working on any special streaming service that will be delivered via Comcast.”

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Bloomberg reports that Apple will add HBO Go content to Apple TV by mid-2013. According to “two people familiar with the plans”, HBO subscribers (cable and satellite) will be able to watch over 600 hours of films and TV shows on Apple TV.

Although there are HBO Go apps for iPhone and iPad, streaming HBO Go content to Apple TV via AirPlay or AirPlay Mirroring isn’t currently possible as video out is blocked in HBO Go app (it only streams audio). At this moment, the only way to enjoy HBO content on Apple TV is via Comcast’s Xfinity TV app (subscription to Comcast and HBO is required).

This is not the first time Apple adds more content to the Apple TV this year. A few weeks ago the company added Vivendi‘s subscription video service Watchever to Apple TV in Germany. The service is best described as a German version of Netflix that holds both German and American content, including content from HBO, CBS, ABC and BBC.

The more content on Apple TV, the more chances for Apple HDTV to become a reality?

[Image: Engadget]

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