Apple and Comcast Want to Revamp Television

Apple and Comcast are in talks to offer a new television service.

Mar 24, 2014 at 10:15AM
Longview

The S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) were down 0.35% and at breakeven, respectively, as of 10:15 a.m. EDT Monday. In this morning's headlines is a possible television collaboration between the world's most valuable company, Apple (NASDAQ:AAPL), and cable giant Comcast (NASDAQ:CMCSA)

The Wall Street Journal reported yesterday that Apple is in negotiations with Comcast to offer a high-quality streaming service that would represent a leap forward in its approach toward television. Apple has yet to make good on the words of co-founder Steve Jobs, who told biographer Walter Isaacson three years ago that he had "finally cracked" the solution to modernizing television. Since then, Apple's only television offer has been Apple TV, which provides users access to movies on an ordinary TV set via iTunes, along with streaming video from Netflix, Hulu, and other providers.

Even Apple executives have long referred to Apple TV as a "hobby," although CEO Tim Cook said last month "it's a little more difficult to call it a hobby these days" -- the Apple TV set-top box brought in $1 billion in revenue last year.

Based on the Journal's reporting, here are the key characteristics of the deal Apple and Comcast are negotiating.

Apple wants to partner with the nation's largest cable provider in order to separate the video traffic the service will generate from public Internet traffic -- similar to cable video on-demand. Ever mindful of the critical importance of customer experience, Apple wants to ensure users aren't frustrated by interruptions or slow service. Last month, Netflix struck an agreement to pay Comcast an interconnection fee in order to improve the quality of the service for its users.

Comcast's motivation is to ensure that its cable subscription service remains relevant in an environment in which consumers' television habits are changing rapidly. However, one of the critical points that could trip up negotiations is who "owns" the relationship with the customers, as well as their data.

Is this the innovation that Apple investors have been waiting for, which would supposedly power the stock higher? Probably not -- and it's not even assured that this deal will get done. Television would appear ripe for disruption, and Apple is better placed than almost any actor to make that happen. However, between entrenched oligopolists and a heavy regulatory apparatus, it's a tough nut to crack. It was always frustrating to have a television show end with the words 'To be continued," but that's what investors are left with in this episode.

It's not Apple! 3 companies set to profit in the $2.2 trillion war for your living room
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers