Apple and Comcast are looking to team up on a deal for high quality streaming TV, “people familiar with the matter” tell WSJ. News of the early talks between the companies comes a month after Bloomberg reported that Apple was in negotiations with Time Warner Cable for a new Apple TV set-top box. The very next day Comcast and Time Warner announced their $45.2B merger sale. Apple’s potential pact with Comcast would ensure faster streaming to Apple users through the “last mile” channel of internet traffic separate from Comcast’s public web access, delivering high quality streams via Apple’s new cloud-based set-top box. Last week Netflix CEO Reed Hastings called out Comcast for the “arbitrary tax” charged to boost the quality of Netflix’s streaming transmissions via the cable provider’s network, despite Netflix’s part in what last month was announced as a “mutually beneficial interconnection agreement.”
UPDATE: Netflix Agrees To Pay Comcast For Broadband Access; Public Knowledge Calls For FCC, DOJ Action
UPDATE, 2:53 PM: DC-based public interest group Public Knowledge raised its concerns over the Netflix-Comcast deal in a statement Sunday. Said John Bergmayer, Senior Staff Attorney at Public Knowledge:
“No one on the outside knows what is happening in this market. However, it is clear that residential ISPs should be in the business of charging their users for access the Internet, not of charging the rest of the Internet for access to their users. This ensures that they are putting the needs of their users first.
From what information is public, it appears that the largest ISPs are demanding payment from networks that deliver content and services that residential broadband consumers demand. Because the large residential ISPs themselves are the ones keeping the terms of their deals secret, it is raises the question of whether they have something to hide.
One way to prevent competitive problems from arising, and to reduce the need for future regulation, is to prevent ISPs from holding other networks hostage. This raises concerns in light of the proposed Comcast/Time Warner Cable merger.
“What has characterized these traffic disputes has been their opacity. We call on the Federal Communications Commission, the Department of Justice, and interested members of Congress to ensure that the broadband market continues to meet the needs of its users, and allows companies like Netflix (and the next Netflix) to offer the services that users have demonstrated they want.”
PREVIOUS, 10:06 AM: There may be smoother streaming ahead …
The wait for HBO Go is almost over for Time Warner Cable customers. TWC is close to an agreement to offer the popular on-demand service, and an announcement might come in the next few weeks, according to a report. Time Warner Cable customers who subscribe to HBO would get access to past and current shows on their computers, smartphones and iPads through HBO Go. The mobile app is available to the customers of nearly every other large pay-TV provider (Cablevision is the only other provider not yet offering it). HBO Go launched in February, and negotiations with Time Warner Cable have been going on since May.
It worked big time for the premiere of Fox’s comedy New Girl, and NBC will now stream the second episodes of its promising new comedies Up All Night and Whitney in their entirety before they air. NBC has struck a deal with Yahoo to have the Wednesday episode of Up All Night and the Thursday episode of Whitney streamed and promoted on Yahoo’s site starting tomorrow morning. Following a 2-week stint of having the pilot of New Girl pilot available on iTunes, VOD, airplanes, Hulu and in hotels, the Fox comedy blew past any ratings projections to open with a 4.8/12 in adults 18-49 and 10.3 million viewers last week. The Yahoo deal does not include NBC’s third new comedy, Free Agents, which appears headed to a quick cancellation.
If Netflix’s efforts to acquire content for its Web streaming service was a baseball game, then it would be in the 5th inning for securing TV shows and in the 8th for movies — although there’s a chance to start a new match there around 2013 — CFO David Wells told an investor group on Wednesday. Hollywood studios are less fearful of Netflix than they were in 2009 and 2010. “Wall Street probably had a part in amping the paranoia of doing deals,” Wells told the Bank of America Merrill Lynch Technology Conference. But now studios are willing to experiment, and “it means people are coming to us with deals.” Opportunities may increase in a few years as studio commitments to premium channels such as HBO and Starz expire. For example, he says that Netflix would consider doing a deal directly with Disney or Sony in mid-2015 if they’re unhappy with the terms that Starz offers them to stream their films. Wells says that studios “would love for us to have a competitor” to bid up prices for movies and TV shows — and Netflix considers Amazon, Google, and Apple likely candidates to play that role. “They’re well capitalized and consumer-centric,” he says. Years from now he says that cable and satellite companies could join the fray by introducing their own Internet streaming services. “It will make for good sport down the road on the content side,” Wells says.
The British equivalent of Netflix will add 100s of MGM titles to its online streaming service. Lovefilm has 1.4 million subscribers – all of whom have access to streamed movies as part of their membership — making it the third-largest UK subscription movie service after Sky and Virgin Media. There are 5,000 titles available to watch over the internet, compared to over 67,000 on DVD. Lovefilm hopes to double the number of streamed titles to 10,000 available by Christmas – half the number currently available stateside on Netflix. It originally thought that download-to-own (DTO) was the way to go, launching its DTO service in April 2006 with King Kong. Instead, the BBC’s on-demand catch-up service the iPlayer attuned customers to streaming.
2ND UPDATE: Deal is done. See news release below.
UPDATE: I’ve learned that as soon as tomorrow there’ll be a news release about EPIX giving Netflix exclusive online rights to films from its partners — Paramount, Lionsgate, and MGM — for the next 5 years in exchange with $1 billion in licensing fees. Of course, who knows what those 5 years will bring in terms of product? Paramount has been self-financing its limited product and mostly distributing pics, Lionsgate is fighting a hostile takeover, and MGM is a corpse waiting for an afterlife. But all Netflix seems to care about these days is supposedly shaking up the pay channel world with exclusive online streaming deals like the recent one with Relativity Media. And who knows what shape Ryan Kavanaugh’s company will be in a few years.
NEW YORK and BEVERLY HILLS, Calif., August 10, 2010 – EPIX™ and Netflix, Inc. [Nasdaq: NFLX] today announced an agreement through which Netflix members can instantly watch an array of new releases and library titles from EPIX streamed over the Internet from Netflix. Movies from the multi-year deal will begin streaming from Netflix on September 1 and include movies from Paramount, Lionsgate and MGM.