Apple Talks Streaming With Comcast, Recording Execs

Apple is doing a lot of talking about what consumers will see and hear on their devices whether or not they bear an Apple logo.

It has held discussions with recording industry executives “about the possibility of launching an on-demand streaming service that would rival Spotify and Beats Music” and is also “thinking about adding an iTunes App for Android phones,” sources tell Billboard’s Ed Christman.

Meanwhile, it is talking to Comcast “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,” sources tell the Wall Street Journal’s Shalini Ramachandran, Daisuke Wakabayashi and Amol Sharma

Although Apple founder Steve Jobs believed that consumers would not pay a fee to subscribe to streaming music, as Christman points out, three years after his death “iTunes has to consider the option because so far this year, U.S. digital album sales are down 13% for the week ended March 9, and digital track sales are down 11% from last year, according to Nielsen SoundScan.”

Meanwhile, revenue from streaming services such as Spotify, Pandora and YouTube is growing apace, two reports released last week show. “With iTunes accounting for more than 40% of U.S. recorded music revenue, any decision it makes about its business model will have a significant impact on the labels' business models,” Christman writes. 

The new service would reportedly give consumers greater control over what they hear than Apple’s iTunes Radio — the ad-supported service integrated last year into iOS 7 that lets people create stations based on songs, artists or genres. 

Although Pandora has continued to thrive, 40% of its users access the service through Apple hardware, Daniel Sparks points out on Motley Fool. “What happens if Apple beefs up iTunes radio and makes it both more accessible and more compelling?” he asks. 

The even bigger question is what happens if it made TV programming more accessible.

Apple has reportedly been working on a new Apple TV device for some time, with reports dating to the somewhat-distant past of 2010 claiming it will be unveiled in the near future. If the present claims are true, it will “blend live TV listings with apps and Web video, with a big focus on gaming,” sources tell Jessica E. Lessin and Amir Efrati on The Information, MacRumors’ Richard Padilla reports.

“Unlike the existing $99 Apple TV, the new box would serve as a full replacement for a cable box, offering cable content as well as iTunes and other Web video,” they write. In addition, “Apple has also been working to release an updated version of the $99 box, which supports a growing number of video apps, including apps from Disney and HBO.”

“The type of deal that Apple and Comcast are talking about isn’t without precedent. And a whole lot of how it is delivered will be dependent on who exactly owns the customer relationship and what the service entails,” writes TechCrunch’s Ryan Lawler. 

He concludes, “It’s doubtful Apple would roll out its own TV service or license content to create a streaming TV service. To roll out a Comcast app on the next-generation Apple TV box seems a lot more likely. And to make those Comcast streams a managed service on that box in the same way that they’re a managed service on Xbox seems like a no-brainer.”

Meanwhile, Sprint chairman Masayoshi Son recently said “he wanted to develop a wireless broadband offering robust and affordable enough to compete with fixed-line broadband,” such as that offered by Comcast and it’s probably-soon-to-be mate, TimeWarner Cable, Miriam Gottfried reports in the Wall Street Journal.

There are economic barriers to the plan, Gottlieb reports, and some write off Son’s comments as “bluster” aimed at softening up regulators in advance of a bid for T-Mobile. But the technology to deliver a truly cord-cutting service for TV programming is getting up to speed and Sprint “is more likely than peers to look past poor economics,” Gottlieb writes, in a move that “should it ever happen, could cause huge shifts in the pay-TV and media industries.”

While we’re on the subject of bluster, so far that aptly describes the reality of what consumers have done versus what they say they are going to do when it comes to cutting the cord. A Morgan Stanley survey last year found that 8% said of respondents said they’d “definitely” cancel their cable or satellite TV subscription while 9% said “probably,” Forbes contributor Mark Rogowsky reported last week.

So how many viewers actually defected in 2013? 

“The total subscriber losses for the industry last year were 104,521 — about 0.1% of customers,” according a report by the Leichtman Research Group.

No one is going anywhere, apparently, until the alternatives are viable — which no doubt explains why Apple has taken so long to get to where it’s at.

Tags: apple, radio, streaming, tv
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