Feb 14, 2014

A Universe Of Their Own: The Real Fallout From The Time-Warner/Comcast Merger

One of the things that got lost in the news about the Time-Warner/Comcast merger was that the day before, there had been no small amount of buzz around an alleged Apple/Time Warner deal where Time Warner was going to allow Apple to create an interface for Time Warner Cable that lived on the Apple TV box and that supposedly the only thing holding it up was the fact that Apple wanted users to be able to authenticate with their Apple ID rather than with their TimeWarner ID.

It was going to be a big step forward for Apple and for the Apple TV device in general, particular since that device has been getting a major ass-whupping from Roku. To the point where, as once tech blog articles would refer to “streaming devices like Apple TV and Roku” they now seem to default to “streaming devices like Roku.”

The merger would seem to put as end to that, for as tech writer Jessica Lessin noted in a tweet, “(Comcast CEO) Brian Roberts is more likely to win a gold medal than do a deal with Apple right now.”

It’s not that Comcast is anti-innovation— if anything, they tend to lead the industry. It’s just that they like to do things themselves and that doesn’t leave a whole lot of room for Apple or anyone else.

Take set top boxes: while the rest of the industry regards them as something akin to radioactive waste, what with their high upfront costs, $250 truck roll costs, unreliable installer problems and the like, Comcast is doubling down on set top boxes, actually selling their X1 and X2 platforms (and boxes) to competitors. In Comcast’s view, the set top box is their way to control their ecosystem, and with something approaching a national presence, they are in a unique position to do so. That’s bad news for Apple and any other company who was banking on creating a unique TV platform that worked regardless of which MVPDs content it was displaying.

The same DIY philosophy is behind Comcast’s Xfinity Streampix product, which is positioned as a direct competitor to Netflix and Amazon. Streampix allows Comcast to make use of their extensive video library and access to new movies. But more than that, it allows them to circumvent some net neutrality practices since, for example, the bandwidth used when streaming movies via Streampix does not count towards the amount of bandwidth that certain Comcast customers are allowed before caps set in. And here again, the sheer size of the new Comcast will make this significant and may make Streampix a viable rival.

In both instances, the Comcast-Time Warner merger is a big step backwards for third parties who have been trying to/hoping to disrupt the pay TV landscape. Whether they’ll be able to recover from that, to rally other MVPDs together to present an alternate vision of what TV looks like, remains to be seen.

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