Article here via the WSJ
- The talks illustrate that Apple is seeking a less radical path to expand in television than it has contemplated in the past, namely teaming up with existing service providers rather than licensing content to compete with them directly.
- By building a set-top box that could be used with cable operators, Apple would be following a similar playbook that it used to transform the mobile-phone industry: convincing existing service providers to marry their service with Apple's hardware and software.
- Cable operators have also been put off in the past by Apple's demand for a 30% cut on certain transactions going through the box, according to a person familiar with the situation. Apple has also discussed wanting to be the exclusive provider of set-top boxes using Internet Protocol technology, the person said. And it wanted the cable operators to service the box.
- For cable operators, the advantage of a deal with Apple is that it could allow them to reduce the money they spend buying set-top boxes, which are leased to customers for a monthly fee. It could also help them hang on to customers who can watch video through a growing array of Internet alternatives, as both traditional TV and Web video would be available through the same device.
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