The Journal, citing "people familiar with the matter," reports that the platform would utilize a set-top box and rely on Comcast's network, "to ensure it bypasses congestion on the Web." That congestion is purportedly at the root of a spat between Netflix, a heavy user of Internet bandwidth, and Verizon, which must maintain the infrastructure necessarily to support all of that streaming video.
"Apple would benefit from a cable-company partner because it wants the new TV service's traffic to be separated from public Internet traffic over the 'last mile' – the portion of a cable operator's pipes that connect to customers' homes, the people familiar with the matter say," the Journal reports. "That stretch of the Internet tends to get clogged when too many users in a region try to access too much bandwidth at the same time."
Neither Apple nor Comcast has commented on the rumors. But Wall Street is treating them as real enough: Shares in Netflix slumped significantly in trading on Monday.
Streaming video is a big business in the US. As the analytics firm SNL Kagan recently noted, traditional TV providers lost more than a quarter million subscribers last year – apparently the first full-year plunge in cable's history. Meanwhile, the number of consumers paying for streaming video continues to grow.
Netflix, for instance, has more than 30 million consumers in the US. And Amazon has launched its own streaming video service; the company is also apparently in the process of building its own dongle that makes it easy to stream Amazon content on television sets.