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Apple (NASDAQ: AAPL) and Comcast (NASDAQ: CMCSA) revealed on Monday that they are discussing a potential partnership for a streaming-television service that would use an Apple set-top box and receive priority treatment on Comcast's cables.

Shares of Netflix (NASDAQ: NFLX) tumbled more than seven percent following the news announcement. An Apple and Comcast partnership would combine the world's most valuable (and arguably, most popular) technology company with America's largest cable provider that could modernize TV viewing.

Apple's expansion to the entertainment aspect of the living room has been widely known over the years, as Apple has gone out on a buying spree in acquiring TV-related startups. In August 2013, for example, Apple acquired Matcha.tv, a TV and movie listings and recommendations service.

Related: The 'Last Mile' Connection: Why Would Apple And Comcast Partner Up?

An Apple and Comcast partnership would allow a user to stream live TV and access on-demand recordings and gain access to a cloud-type storage system to save programming.

Apple would benefit immensely from a cable partner like Comcast that could allocate the “last mile” of Comcast's network to access faster speeds and deliver a better final product to consumers.

Comcast and Netflix entered an agreement in February in which Netflix will pay Comcast for a faster and more reliable “pipeline” to deliver content to customers. The deal does not address how Netflix's traffic is treated over the “last mile” to households, giving Apple a tremendous speed advantage.

In other words, Netflix's worst nightmare that it could no longer guarantee the fastest service to customers.

The Wall Street Journal reported that Apple and Comcast are not close to finalizing an agreement; Comcast would also be required to undergo significant investments in network equipment and other technology upgrades.

Additionally, Apple still has to acquire significant TV programming rights from media companies, while ensuring Comcast customers won't be paying a significantly higher price compared to a traditional pay-TV service.

Posted-In: Apple TV Comcast Matcha.tv NetflixNews Tech

 

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