EXCLUSIVE: After passing on Apple TV for Roku, Comcast won’t develop a tvOS app for its 21+ million cable customers

Comcast – America’s largest cable TV operator – will not only pass on using the Apple TV platform as the future infrastructure of its streaming cable systems in favor of a Roku-designed smart box, sources report it will not create a tvOS app to stream its cable systems to potentially some 21 million customers. The news is a big hit in Apple’s efforts to expand the platform as an alternative for cable systems and their customers to watch streaming television.

BESTAppleTV has learned Comcast told Apple of their plans in early December of 2018, shortly after their acquisition of the British telecommunications conglomerate, Sky plc, who currently operates a streaming TV subscription service based on a Roku-powered device.

Comcast executives admitted January 23rd during a fourth-quarter earnings conference call that it would take the already-developed technology and re-package it for distribution on Comcast-labeled Roku boxes to its Xfinity cable subscribers sometime in 2020, but not on Apple TV devices.

“Our idea to enter the business is to leverage Sky’s technology,” said Stephen Burke, senior EVP & CEO, NBCUniversal. “We think this approach has a much better chance to get scale quickly.”

Sources re-confirmed Comcast’s plans for its cable systems with a separate source going further and affirming the company will not develop a standalone tvOS app that would stream its Xfinity cable services to customer-owned or possibly Comcast-sold Apple TV devices.

“Comcast is focused on the Now TV solution as the future of its streaming infrastructure and Apple has been told this,” a source directly connected with Comcast said. “Apple has also been informed Comcast will concentrate its [U.S. Xfinity] efforts on this platform, not on adding other third-party devices to the product mix with separate apps.”

Comcast puts all its eggs on Roku & Now TV infrastructure

Comcast will center its efforts on developing and selling the streaming service in the U.S. based on Sky’s domestic subscription streaming service, Now TV. The same source has confirmed a marketing strategy – everything from if Comcast will sell or rent Roku boxes and how it will distribute a standalone streaming app – have not yet been decided.

Sky, which is best known for its direct broadcast satellite service in the U.K., has operated Now TV since 2012 in the United Kingdom, Ireland, and Italy. Roku licenses its technology and proprietary operating system, Roku OS, to service operators, including Sky.

Sky Now is essentially the equivalent of Sky satellite TV, but in a streaming service broken down into four ‘Now TV passes’ – the Entertainment Pass, Sky Cinema Pass, Sky Sports Pass, and a Kids Pass.

The majority of the services available by Now TV are designed to cater to British consumers who do not want to be tied to a contract. The passes are priced at between $5 and £44.50 a month, with its Sports Pass being the most expensive.

Now TV is also available as an Apple TV app in the U.K. and is currently in a beta testing phase of an upgrade that will include Siri support, the capability to search content, and a new, updated look and feel to the user interface.

The decision by Comcast to go with the number-one-selling streaming device and not Apple TV in the U.S. is of little surprise.

“This really is a no-brainer,” the source commented. “It especially makes sense as Sky has a completely ready software and hardware solution for Roku that can be easily modified for mass distribution on every cable system in the country.”

In reacting to the news it will not develop a tvOS app to stream its cable systems, a Comcast spokesperson wouldn’t confirm or deny the report, did affirm that a tie-up with Apple has not happened, but left the door open for the future.

“At this time, we have not reached terms with Apple to bring our Xfinity Stream app to Apple TV devices,” a spokesperson told BESTAppleTV.

The source for this report reiterated to BESTAppleTV that the chances Comcast would reconsider its stance on developing an Xfinity streaming app for Apple TV in the next two or three years, or at all, were “slim to none.”

An Apple spokesperson did not reply to multiple requests for comment to this story.

Comcast also plans on launching a direct-to-consumer service of NBC programming in the first half of 2020 that will also use the Now TV solution for distribution. The new service would include 80 percent of the broadcaster’s most popular shows and be distributed free to Comcast customers in North America and Sky subscribers in Europe. It will also be made available for a small subscription to those not customers of Comcast.

In addition to Comcast possibly offering the Roku boxes for this service at a nominal fee, it is highly likely NBC’s planned ad-supported streaming television service – like many other NBC-related networks such as NBCSN, SyFy, and MSNBC – will be available as a separate, standalone app on Apple TV, a source said.

Comcast served more than 22 million subscribers in 79 markets in 2018, according to a report from the Leichtman Research Group. With ‘cord-cutting’ growing and more Americans finding cheaper alternatives to pay-TV, estimates are Comcast has fallen below that customer number in the last year.

Cable systems worry is Apple a partner or a competitor

The news Comcast will steer clear of using Apple TV as a streaming solution for its cable systems is a disappointment for a company trying to grow acceptance of its platform among providers and consumers. With promises it would partner with multiple cable systems to add ‘zero sign-on’ and their services to tvOS through a streaming app, only one cable system has yet to do so and now the nation’s largest is out of the running.

Many industry watchers have privately expressed concerns that while being available to consumers on Apple TV is important, cable operators want to refrain as much as possible being on devices where their customers can buy content from Netflix, HBO, and ESPN and potentially lose their business.

While they know the TV market is changing and consumers are being offered services individually through aggregators like Amazon, Apple and Roku, cable systems are trying to find the right model where they know their customers might subscribe to various other services, but hopefully stay loyal to them.

“Apple’s tvOS integration has been largely resisted by cable systems, which should not be a surprise,” said long-time Apple analyst Gene Munster, managing partner of Loup Ventures. “While a tie-in would be good for consumers with ‘zero sign-on’, it gives Apple an opportunity to promote tvOS usage and sell content direct to hundreds of millions of users, which cable operates don’t want.”

“Losing the chance to be incorporated into the largest US cable operator is certainly not good news for the [Apple TV] platform,” according to Michael Greeson, president of the new media research consultancy, The Diffusion Group. “But as has always been the case, Apple has a much larger agenda than selling boxes, which still makes some pay-TV operators a bit uneasy. Apple has worked for years to temper operator unease, and the Charter deal was a validation of these efforts. But Comcast is a bit different, as it acquired Sky Now TV’s technology and has little need for Apple.”

Greeson wonders why some relationships with third-party content providers are okay with Comcast, but others might not be.

“Comcast already supports Netflix and Amazon Prime Video on its [Xfinity] X1 platforms, so it has allowed the two biggest subscription video-on-demand operators onto its platform, [the latter] which rents and sells specific titles to Comcast subscribers,” Greeson said. “Comcast seems okay with Amazon integrating its app and selling to Comcast subscribers, but not Apple.”

In June of 2018, Apple announced plans to add the capability to tvOS 12 for customers of selected cable providers in the U.S. to not have to sign in with a TV provider subscription authentication and gain access to streaming video content through their Apple TV device.

It was then that Apple announced it would partner with the nations second-largest cable company, Charter Communications, to offer ‘zero sign-on’ and would expand the feature to other providers over time. Since then, Apple updated tvOS 12 to support ‘zero sign-on’ followed by Charter launching the capability in early January of this year with the release of its own Spectrum TV app for Apple TV users.