Apple negotiating with cable operators to use device as a set top box

For all the stuff that you’ve heard about Apple TV (the box) and the nearly mythical iTV, this is really the most important rumor. Never mind Siri on the TV, and other user interface chatter. Although very important, the user interface is only useful if there is actually something to watch on the big screen. And that’s exactly the first thing that Apple is trying to solve by negotiating with cable operators to let people use an Apple device as a cable set top box.

This is not unheard of: Tivo has done that for years, but Tivo’s problem is that it has much less option than Apple has to monetize its box. In short, there is no Tivo app store or eco-system that is comparable to what Apple has, or could have. On the surface, it doesn’t sound too bad for the cable folks, but things aren’t simple.

The first problem when you talk to a cable operator is that it won’t like the idea of having any image displayed on your TV that does not come from one of its channel. And Apple would have plenty of that: apps, photos, games, news, alternative content sources, Internet TV, etc… each and every one of them has the potential to take away time spent watching cable TV, and more importantly time spent watching TV ads.

Cable operators would rather not see Apple come to the TV market at all. But Apple is, and now Cable folks face a choice: jump on board, or not. Some look at what happened with AT&T which took a huge lead when it accepted Apple’s very strict terms, while others suffered an exodus from clients eager to get the iPhone. On the downside, AT&T has completely lost control over the content market and will probably never get it back.

If cable operators accept to let an Apple device become a set top box, they risk losing control, and this is something that they can’t bear. Now, the question is: will they accept? Wall Street Journal reports that no-one has signed yet, but smaller operators are sure looking at this and think that this could be a quick way to expand if they have little to lose.

Hubert Nguyen
Categories: Apple
Tags: business, hdtv, television