Updated from 11:04 a.m. to include thoughts from Barclays analyst in the tenth paragraph.
NEW YORK (TheStreet) -- Any time someone writes the words Apple (AAPL - Get Report), television, content and service, the media, tech zealots, and investors go nuts. With the latest offering about a potential deal with Comcast (CMCSA - Get Report) coming down the pipe (pun intended), a bit of caution is warranted here.
Last night, The Wall Street Journal reported Apple is talking to Comcast about a streaming service that would use Apple TV as the set-top box, with the streaming service getting preferential treatment on Comcast's pipes, so as to avoid disruption. This all sounds well and good, except the deal isn't anywhere close to being done, according to the Journal, and there's likely to be major hurdles getting to the finish line.
Comcast has been busy touting the benefits of its own set-top box, Xfinity 1, which has a much-improved user interface, and can be controlled by mobile devices, similar to how Apple TV can be controlled via the iPhone or the iPad. Apple wants to own the interface, as well as have users use their Apple logins, in addition to asking for a cut of customers' subscription fees. Barclays Capital's analyst Kannan Venkateshwar notes that by Apple not owning the rights to linear television, the prospects for a deal are slim. However, a potential deal could be more about improving Comcast's app services, given it already has deals for the various content rights. "Consequently, in our opinion, any deal between Apple and an MVPD like Comcast is likely to be in a form where the MVPD's app appears on Apple TV along with other non linear offerings like Netflix," the analyst wrote in the note. "Such an arrangement would imply that any subscriber to such a service will have to be a Comcast subscriber who happens to have Apple hardware rather than an Apple customer who becomes a Comcast subscriber." Not only are those hurdles high enough to overcome, but Apple would have to acquire the rights from media companies for the service. Apple has been busy working on adding content to its Apple TV set-top box, including HBO Go, WatchESPN, WWE Network and others.
--Written by Chris Ciaccia in New York