Dennis Kneale

  • Home
  • What’s Bugging Me
  • Dennis Kneale Media
  • Facebook
  • Linkedin
  • Twitter
  • YouTube

Comcast’s Bite at the Apple

March 24, 2014 By Dennis Kneale

APPLE NETFLIX BLOGARTNewsflash:  Apple is in talks with Comcast, the nation’s #1 cable giant, about starting a new Internet-based streaming service, The Wall Street Journal reports this morning.  Topspin:  I got three angles for you.  First:  Comcast shouldn’t do it.  Second:  This net-TV stuff will be far more difficult than expected.  And third:  Netflix be wary—your real competition isn’t HBO after all.  It’s Apple.  And Apple could eat you alive.

Netflix shares are down another 3% this morning, in fact, after dropping 4% on Friday as well.

Word of the Apple-Comcast talks could feel like a betrayal to the folks at Netflix.  The high-flying streamer just signed a deal to start paying Comcast extra to give special treatment to Netflix video and plug the feed directly into the Comcast cable box.  Now comes an Apple effort to one-up Netflix by streaming not just on-demand movies and series but also live programming, interposing a new Apple gadget (presumably an upgrade of the old and slow-selling AppleTV netbox) between Comcast and its own subscribers.

The Journal says Apple is pushing to control much of the customer contact—and, more importantly, the data on customer preferences, practices, orders etc. Story is here: http://on.wsj.com/1lgr6zt

And that’s a big reason why Comcast shouldn’t do this. The Journal says the big cable guy is fighting Apple on this point, but the question is whether Comcast can resist.  It’s like the nerdy kid in the school cafeteria, trading baseball cards with the cool kid who’s also the quarterback; no contest.

Every business today, and especially every digital business, is really two businesses in one:  the main business (FedEx ships stuff), but also a business built on data about the first business (which FedEx uses as a value-added extra to let you track-your-package).

Apple knows this well, which is why it has insisted on controlling customer data in its deals with music labels for the iPod and iTunes, with book publishers for e-books, and with newspaper and magazine publishers for the iPad.  Haven’t those deals been mostly great for Apple and far less beneficial to the partners in most every instance?

Yes, iTunes “saved” the music business, but Apple takes a hefty 20% cut of every song it sells.  Until a court threw out its deal with the biggest book publishers, Apple took a 30% cut of the retail price.  It gets 30% of each app sale, though its costs of hosting that online app-store are marginal.  And when magazines wanted to appear on the iPad, Apple insisted it be the one to sign up new subscribers; they belonged to Apple not the magazine they were paying Apple to receive.

It’s as if the corner newsstand insisted that people who buy The New Yorker there are its subscribers and not the magazine’s.  Ridiculous.  Apple’s tough stance contributed to the iPad’s flop as the last-best-hope for print.  Apple’s bent lacks respect for content creation, and it hands a bigger chunk of the spoils to distribution (meaning Apple itself).  Yet in the Internet age, the tech-wave is supposed to flatten distribution costs and eliminate the middleman.

Howizzit Apple continues to be carve out a role as the fat-and-happy go-between?  Somebody—hello Brian Roberts and Steven Burke at Comcast?—should draw the line and put a stop to it.

Next up:  Internet TV and the real threat to Netflix: Apple.

Filed Under: Top Story

Dennis Kneale

Dennis Kneale covers media & tech, healthcare & science, business vs. government and other pursuits in the realm where creative destruction collides with wealth creation.
  • View All Posts
Dennis Kneale

Dennis Kneale
25-year inkstained wretch (WSJ, Forbes) goes TV: ex-CNBC, ex-Fox. Here's the bio...

Sign Up for Email Alerts

Latest Tweets

  • Nope. No way. https://t.co/6Czh9Y4ldj About 6 hours ago
  • Seconded. #WhatsBuggingMe on @Ricochet https://t.co/wm88DyB5AZ About 6 hours ago
  • Up now @NEWSMAX #WhatsBuggingMe my column on Trump's out-of-line attack on Kayleigh McEnany. When will he learn to… https://t.co/T7lVFiKhe1 Yesterday at 9:20 pm
  • Good, memorized bit… and then @DRUDGE sold out and had a brain transplant to turn liberal msm. https://t.co/mzTutkAHDo Yesterday at 5:20 pm
  • Cue next anti-Trump meme: RINO Repubs solemnly bowing out of a race they had no chance of winning, because Trump Ba… https://t.co/y9ResW86ow Yesterday at 5:17 pm
  • Everything ends up being about @realDonaldTrump. #WhatsBuggingMe on @Ricochet https://t.co/DczyNuafDj Yesterday at 4:47 pm
  • Drill drill drill. https://t.co/BsDFt9aaxn Yesterday at 3:53 pm
  • Set afire by the blaze he himself started? Seem to recall his shining a harsh spotight on FTX scam, or was that som… https://t.co/JCowhBbCxd Yesterday at 3:49 pm
  • We yearn for the return of Reagan’s 11th Commandment: Thou shalt not attack a fellow Republican. #WhatsBuggingMe o… https://t.co/Hic6XBGW9w Yesterday at 3:45 pm
  • Gee I Wonder Why Dept. #WhatsBuggingMe on @Ricochet https://t.co/IZLdoueKzZ Yesterday at 3:41 pm
  • Ouch: the great @marklevinshow takes aim at Chris Christie moments before CC’s likely announcement of a low-odds ru… https://t.co/JArww5qYQm Yesterday at 3:40 pm
  • 🤣🤣🤣🤣 https://t.co/yGMF9Wj1uC June 5, 2023 12:20 am
  • OMG!!!! Media? Media? Bueller? #WhatsBuggingMe on @Ricochet https://t.co/wSC85T8Ju7 June 4, 2023 5:34 pm
  • At yheaters now: The Karate Kitty. Wax on. Wax off. Wax on. Wax off. https://t.co/5ZEIXmgc7n June 4, 2023 5:32 pm
  • Sure was, thanks to the Borellis the both of em?! @deneenborelli and @tomborelli #WhatsBuggingMe on @Ricochet https://t.co/Wi0lC779On June 4, 2023 4:30 pm

Copyright © 2023 Dennis Kneale