Comcast is the world's largest media company, and is owner of the NBC television networkand Universal Pictures. The negotiations, which were reported by the Wall Street Journal, could lead to Apple becoming a game-changing player in the TV space, as it did with the iPhone back in 2007.
Negotiations are in the early stages and many challenges remain to complete the deal, anonymous sources told the Wall Street Journal. The arrangement under discussion would have Comcast provide special treatment on its cable system to ensure the video data would get around Web congestion, the newspaper said.
The deal seems to a continuation of one between Apple and another distributor, Time Warner Cable, which paused in February after Time Warner was acquired by Comcast. Apple and Time Warner were at the time thought to be in talks about a cable TV app for the Apple TV box, or some form of other partnership.
A recent US court decision means 'net neutrality' is effectively dead, meaning cable companies in the US can prioritise Internet traffic and speeds how they see fit.
Rumours about Apple cementing its place in the TV space are nothing new - former Apple chief the late Steve Jobs famously told biographer Walter Isaacson that he "licked it" when talking about Apple's TV plans and the Cupertino tech giant has been rumoured to be working on everything from its own flat-screen television to new ways to control TVs with iPhones and iPads.
The WSJ said that the two companies are holding talks that could result in Comcast delivering an Apple-branded TV service the same way it delivers phone calls and cable video-on-demand, known as ‘managed services’.
Meanwhile CNN reported Apple has conducted meetings with major media companies about gaining the rights to their live channels and, in some cases, ‘in-season stacking rights’ for video-on-demand, according to people with direct knowledge of the talks who insisted on anonymity.
Such rights, said CNN, would allow Apple to stream complete current seasons of shows on major networks and cable channels, reducing or eliminating the need for a digital video recorder. In one scenario discussed by the companies, advertisement fast-forwarding would be disabled for a certain period of time after the premiere of a new episode.
"This is going to be the next evolution as Apple TV at some point will be launched not just as a TV box, but a revolutionary way to home entertainment," said Laurence Balter, chief market strategist with Oracle Investment Research in Hawaii.
"Right now, they need to corner the market on content. If they didn't do this and suppose they launch their TV set, everyone would watch Netflix, and Apple wouldn't get a penny. This is about keeping the revenue stream flowing in their direction."
Foxtel has launched its "underwhelming" Presto movie streaming service in Australia just this month, while Netflix, which has announced a massive $3 billion spend on content for 2014, is rumoured to be hitting Aussie shores sometime this year.