NEW YORK (TheStreet) -- "Content is king" is now the prevailing mantra in subscription businesses. Investors will casually remind you whenever they need to feel good about their positions.
But they forget that there's no content without money. And very few companies can stack their wallet side by side with Apple's (AAPL - Get Report) and feel confident.
To that end, while Netflix (NFLX) does have a strong content library, the stock has traded as if that library is filled with history books. Investors have begun to wonder if there's a future. Netflix stock closed down 2.13% Tuesday at $370.84. Although the stock is up roughly 1% on the year, shares have plummeted 13% in two days. Investors aren't wasting time.
Apple reportedly is in talks with Comcast (CMCSA), the nation's largest cable provider, to reinvent the way consumers watch television. Reports suggest that both companies are negotiating terms on a joint streaming-television service using an Apple's set-top box, currently known as Apple TV. In return, Apple wants "special treatment" on Comcast's public lines.
Apple seeks assurances from Comcast that there will be no congestion. For this to be possible, Apple would need an exclusive line that allows it to bypass the "last mile" congestion, or the part of the transmission that reaches the customer.
Apple plans to allow users to stream live and on-demand programming stored in "cloud" servers. If this deal does go through, Apple would have already been successful at re-inventing collaborative efforts between "old media" and a tech power. But there's something else that needs "re-inventing," according to Tim Cook, Apple's CEO.
With investor fear rising about Netflix losing a substantial portion of its customer base, Cook should go after Netflix now and use its offer with Comcast as leverage. If Apple is successful at improving viewer engagement, Netflix may see a mass exodus of its customers.