What do you do if you have an extra US$45.2 billion sitting around? If you're Comcast, you buy Time Warner Cable. Comcast announced on Thursday that it's doing just that and plans to complete the deal before the end of the year. That could turn into a content licensing deal opening Apple TV to potentially 30 million customers.
Comcast to buy Time Warner in $45.2 billion deal
Comcast said in a statement,
Comcast Corporation and Time Warner Cable today announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast. The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable's 284.9 million shares outstanding for shares of [Comcast stock] amounting to approximately $45.2 billion in equity value.
The combined company will serve about 30 million subscribers, and will merge the features each currently offers to its own customers. Comcast and Time Warner's merger still needs to pass regulatory approval, which the company's expect to take several months.
Assuming the merger doesn't hit any show stopping hurdles, it could have interesting implications of Apple. Ahead of Comcast's announcement, word surfaced that Apple is developing a new version of its Apple TV set top entertainment box that also includes a licensing deal with Time Warner.
The rumored Apple TV update will sport a new interface for easier navigation between TV shows, movies, and other online content. Assuming Apple does land a licensing deal with Time Warner, that content could include programming and other services from the cable provider.
Apple's new set top box is expected to ship by fall, which would come in ahead of Comcast and Time Warner's deal closing. If Time Warner does throw its hat in with Apple, that agreement could be part of the shared services all subscribers get after the merger, giving Apple a content deal with Comcast without ever having to negotiate with the cable provider.
Apple still calls Apple TV a hobby, although the company has been closing more deals to add special streaming channels to the device such as HBO Go, ESPN, ABC, and Disney. With the growing number of channels available now, it's clear Apple has bigger plans for Apple TV, and that points to a couple paths: games and TV service provider deals.
Adding gaming console features to Apple TV is something the company can do without involving too many big name partners to start, but cable deals require extensive licensing deals, and that involves working with companies like Comcast and Time Warner. If Apple has played its cards right, it managed to swing a content deal with two of the big players in that market while having to negotiate with only one.