Market Overview

Apple Said to be Closing in on Deal with Time Warner Cable

Apple Said to be Closing in on Deal with Time Warner Cable

Coinciding with the hiring of former Hulu exec., Pete Distad, Apple (NASDAQ: AAPL) is said to be closing in on a deal with Time Warner Cable Inc. (NYSE: TWC) to give Time Warner subscribers access to cable channels via Apple TV.

Bloomberg, citing anonymous sources with “knowledge of the negotiations,” reported this news.

Distad is coming on board to help Apple negotiate with media and cable companies, two people familiar with the matter told Bloomberg. While rumors are rumors, Distad’s hiring does seem to give the Time Warner Cable angle more credibility.

Related: Could Hulu's Senior VP Help Apple Become a Content King?

In addition, Apple announced in June that it would be adding content from Time Warner (NYSE: TWX)’s HBO and The Walt Disney Co. (NYSE: DIS)’s ESPN. All this, said Bloomberg, designed to boost sales of Apple’s $99 set-top box, which competes with Roku Inc.’s device and Microsoft (NASDAQ: MSFT)’s Xbox.

At the same time, media and content providers, like Time Warner, have been seeking more outlets, like Apple, to handle their products on an “on-demand” basis, given the fact that people are becoming less inclined to watch scheduled television shows anyway.

Much to Time Warner’s delight, Apple has found a way to work within the existing business model of subscriber television. By not offering its own, competing live programming online – at least not yet – Apple has removed a major objection to selling content to online services in direct competition with cable and satellite operators.,

If the Apple-Time Warner Cable agreement happens, it will follow similar deals Time Warner Cable made with Roku, Microsoft, and Samsung, as well as Apple’s iPhone and iPad. The company also runs content on Google (NASDAQ: GOOG)’s Android devices via an application called TWC TV.

Apple TV, which began as a way to view TV shows and movies sold on iTunes, has evolved. Now it offers programming from companies such as Netflix Inc. (NASDAQ: NFLX) and others. In addition, customers can wirelessly stream pictures and video from iPhones and iPads via AirPlay.

The rumored deal between Apple and Time Warner Cable is what TechCrunch called a “minor update,” not a “revolution.” For TWC subscribers, the deal would provide one more way to access content they are already paying for.

What would be trailblazing, TechCrunch said, would be an actual Apple television. Whether this agreement – if it happens – would eventually lead to such a device, remains to be seen.

Meanwhile, in early trading Wednesday, Apple shares were up $1.11 at $419.60. Time Warner Cable shares rose $2.25 at $111.72.

As of this writing, Jim Probasco had no position in any mentioned securities.


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