Apple-Comcast Talks Shows Power of New Media

U.S. stock markets are down today, but Apple is up and it's showing how the Internet could change the future of media.

Mar 24, 2014 at 3:30PM

U.S. stock markets are mixed today after a reading of manufacturing activity slowed and fear of conflict in Ukraine increased again.

Markit's "flash" U.S. Manufacturing Purchasing Managers' Index fell from 57.1 a month ago to 55.5 in its first March reading.  

On the international front, Ukraine pulled its troops from Crimea, yielding to Russia, and President Barack Obama proposed excluding Russia from the Group of Eight nations. There's no imminent danger of military conflict, but the battle over Crimea isn't easing quickly and the market is at least a little concerned about potential escalation there.

Still, the Dow Jones Industrial Average (DJINDICES:^DJI) broke just above breakeven in late trading after a day in the red. What's interesting is that the S&P 500 remained down down 0.24% and the Nasdaq Composite had fallen 0.94%. Higher-growth stocks and higher-risk tech stocks are selling off more than blue chips, which isn't surprising given how growth stocks have dominated market returns over the past year.

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Streaming apps like this are the future of media, which Comcast can see coming a mile away. Image owned by The Motley Fool.

Changes in big media
Outside the Dow, the big move of the day is Apple's (NASDAQ:AAPL) rumored discussions with Comcast (NASDAQ:CMCSA) about a new streaming service. The deal would give an Apple set-top box preferential treatment in ensuring its customers get their cloud-based streaming programs without disruption, much like the deal Comcast recently signed with Netflix (NASDAQ:NFLX).  

This could be an important deal for all three companies given the clout Apple and Comcast could have over other distributors. Apple has the customers to make a streaming service work and has coveted a way to deliver streaming content to replace cable. Apple TV was a step in that direction, but the company has long tried to break the grip on cable with subscription content traditionally found on television. It's been adding apps that play live TV, but a deal with Comcast to provide preferential streaming could open up a larger offering to consumers.

For Comcast, this shows the value of the last mile of transmission that it owns and could provide a growth avenue now that cord-cutting is becoming more realistic for consumers. Remember that Comcast owns major content provider NBC Universal, so a deal for streaming with Apple could open new revenue options for NBC Universal as well.

For Netflix, any thought that Apple could offer expanded content or live sports to consumers is scary. Netflix has long been a leader in streaming, but Apple has the device reach and the balance sheet to challenge that dominance. A subscription offering would at least give consumers an alternative to Netflix, which primarily contends with Hulu's subscription service or one-time digital purchases right now.

Apple's shares are up on the rumors today and Netflix is down significantly, but the power in streaming will only shift if deals like this come to fruition and Apple increases its streaming offerings. That's not yet a sure thing, but I wouldn't bet against it right now.

Your cable company is scared, but you can get rich
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. 


Travis Hoium manages an account that owns shares of Apple. The Motley Fool recommends Apple and Netflix. The Motley Fool owns shares of Apple and Netflix. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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