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Apple, Comcast Exploring TV Streaming Deal: WSJ

Apple and Comcast are exploring a streaming video partnership that would enable an Apple-supplied box to obtain TV streams and access to cloud DVR recordings over a managed IP connection, rather than via best-effort, over-the-top high-speed Internet links, The Wall Street Journal reported Sunday.

In addition to seeking a managed video connection that does not intermix with high-speed Internet traffic and the ability to deliver a full-freight subscription video services to Apple set-tops without securing separate licensing rights, Apple is also seeking a share of subscriber fees “and a deeper relationship with customers and content owners,” the paper said, adding that Comcast would want to keep “significant control over the relationship with customers and the data.”

Apple’s purported desires represent the kind that cable operators have historically been hesitant to provide, though MSOs have started to loosen up when it comes to ceding some control of the user interface, particularly when it comes to authenticated TV Everywhere applications.

Such a deal would seemingly give Apple a way to offer higher levels of video service and enable Comcast to support a popular CE platform as it seeks new ways to gain and retain video service subscribers. But the paper hedged that the talks “are still in early stages and many hurdles remain,” with one source saying that the two sides aren’t close to striking a deal.

The timing of it comes as new Federal Commission Chairman Tom Wheeler looks to restore the network neutrality rules that were mostly vacated by a D.C. appeals court in January. Comcast, per the conditions of its NBCUniversal transaction, must adhere to the rules through 2018. There’s some belief that Comcast’s commitment could be extended as regulators vet its proposed acquisition of Time Warner Cable.

Although there’s some room for doubt that a Comcast-Apple deal would come together, Comcast has already developed the technology necessary to deliver managed IP video services to the home. A key piece to that is “VIPER,” Comcast’s cloud-based, multiscreen video distribution platform.

As for specific apps and services tied to VIPER, Comcast’s VOD application for the Xbox 360, which drew the ire of Netflix, uses dedicated bandwidth, as does the new X1 cloud services launched by Comcast recently in Boston, which allows in-home streaming of the full live TV lineup and provides access to a  cloud DVR. As a keynoter at last week’s Multichannel News/Broadcasting & Cable Next TV Summit in New York, Matt Strauss, Comcast’s SVP and GM, video services, said the operator expects to expand access to those new cloud-based capabilities to a “good portion of our footprint” this year.

Another Comcast video service that relies on a managed IP infrastructure is Xfinity On Campus, a product that is being tested or will be soon at a handful of colleges, including Lasell College, the University of New Hampshire, the Massachusetts Institute of Technology, Drexel University, and Emerson College. According to the FAQ, Xfinity On Campus currently works on PCs, iPhones, iPods and Ipod Touch devices (AirPlay, a function that lets users play video from iOS devices on an Apple TV box, is currently disabled for the Xfinity On Campus product).

Comcast declined to comment on the WSJ story, but the MSO has shown interest in the Apple TV platform.

Last week, Strauss said Comcast is starting to test TV Everywhere authentication with “certain programmers” on the Apple TV and Roku platforms. He didn’t identify any programmers or TVE apps by name, but a logical candidate is HBO GO.

TWC has reportedly been in talks to bring its TWC TV app, which supports both VOD and hundreds of live TV channels, to the Apple TV platform. Those discussions have been in a holding pattern ever since Comcast and TWC announced their $45 billion merger deal, the WSJ said.