[opendtv] Apple in Talks to Revamp Set-Top Box

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Thu, 13 Feb 2014 07:45:16 -0500

So Comcast is buying Time Warner, and it's X-1 STB looks like it could have 
been developed by Apple.

Getting regulatory approval for the Comcast/Time Warner merger could come with 
some major strings attached, like agreeing to unbundling of the STBs that could 
be used by subscribers. The Comcast/NBC deal came with requirements, including 
the removal of Comcast/NBC Universal from the management of the Hulu service 
that it has an ownership stake in.

Perhaps the most important take away here is that Apple, like Intel and others, 
has given up trying to develop a competing OTT service to the MVPDs, and is now 
trying to work out a deal to integrate the content controlled by the MVPDs with 
OTT services through a single device. 

The strings that are attached to the potential Apple/TW deal are also 
interesting. Apple wanted to give customers the option to pay to avoid ads - NO 
deal. And it appears that Apple may agree to disable the ability to fast 
forward through ads for the first three days after a network show is available 
for VOD.

Bert seems to think the sky is falling for the MVPDs...that their days are 

Articles like this suggest that the content and distribution congloms - 
remember Comcast is both - have the "threat" on the Internet fully under their 



Apple in Talks to Revamp Set-Top Box

Feb. 12, 2014, 8:50 p.m. EST

By Shalini Ramachandran, Amol Sharma and Daisuke Wakabayashi , The Wall Street 

Apple AAPL -0.0075% Inc. appears to be scaling back its lofty TV industry plans.

The company is talking to media companies and pay TV distributors including 
Time Warner Cable TWC +0.30% Inc. about launching a revamped Apple-branded TV 
set-top box in coming months, according to people familiar with the matter. 
Previously, the company had been trying to license TV programming for its own 
Internet-based TV service—similar to other "over the top" efforts from 
technology companies such as Sony Corp., Intel INTC +0.33% Corp. and Google 
GOOG -0.29% Inc.

In the current discussions, which involve at least two big media companies, 
Apple envisages working with cable companies, rather than competing against 
them, the people said. For programming, it would rely on cable providers to 
acquire programming rights from media companies, rather than acquire them on 
its own, the people said. Apple might consider seeking some rights directly in 
the future, one of the people said.

One of the people said Apple was aiming to release the new set-top box as early 
as June, though another cautioned the device might not be ready for several 
months after that.

Apple TV, a digital media player introduced in 2007, offers users access to 
iTunes movies on the larger screen of a television as well as streaming video 
from Netflix, Hulu and other online services. However, Apple TV's appeal to 
consumers as an alternative TV device has been limited by a paucity of live 
television offerings.

Over the past couple of years, Apple has pursued several ambitious paths to 
move deeper into the living room.

In 2012, the Journal reported that Apple was talking with cable operators like 
Time Warner Cable about a set-top box and was approaching media companies to 
gain rights for an ambitious Internet-based digital-video-recording service 
through the box. At the time, it was looking to offer full seasons of current 
shows, as well as live programming. Last year, it approached media companies 
with a proposal to pay extra for ad-free programming.

But it couldn't complete a deal. Programmers resisted the idea of ad-free TV, 
and Time Warner Cable balked at some of Apple's early proposals, which included 
Apple essentially taking over the cable operator's video-on-demand service. 
Comcast CMCSA+0.44% Corp., meanwhile, has been aggressively deploying its own 
next-generation set-top box dubbed the X1.

Apple's latest approach is far less ambitious. Instead of asking for full 
current seasons of shows, it is asking programmers for just the most recent 
five episodes of current-season shows—the standard for video-on-demand services 
in the TV industry, a person familiar with the matter said. Apple is also 
proposing to disable fast-forwarding on shows for three days after they air, 
which would protect TV channels.

It is unclear whether Apple would sell the box directly to customers, as it 
does with Apple TV, or reach a deal with a cable operator to distribute the box 
and lease it to customers. One of the people said cable operators are 
interested in saving money by not having to invest in buying set-top boxes if 
Apple were to sell boxes directly to consumers.

Bloomberg earlier Wednesday reported that Apple is in discussions with several 
distributors over an updated Apple TV set-top box that it aims to launch by 

Write to Shalini Ramachandran at shalini.ramachandran@xxxxxxx , Amol Sharma 
atamol.sharma@xxxxxxx and Daisuke Wakabayashi at Daisuke.Wakabayashi@xxxxxxx

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