So is Apple TV still only a hobby for Jobs and company? Because if it isn’t, then I’m missing something from yesterday’s presentation when the new iteration of Apple’s set-top device was unveiled. The new Apple TV is smaller, cheaper and sexier, I’ll grant it that, but what else does it really have going for it?
Let’s start with rental only. That’s right, you can only rent content from the Apple TV, not purchase it. It makes sense given the device’s lack of onboard storage, but does it make sense for a buying public that’s only just now moving past the point of physical media ownership? All of a sudden, not only do you not have a disc you own when you pay for content, you also don’t even have a file. Instead you get a window of opportunity.
Call me old-fashioned, but I like archiving my material and I like to have it available whenever I want to review it, or just revisit a favorite scene to make sure I remember it correctly. True, as Steve Jobs said in the presentation, I’ll be able to rent it multiple times for cheaper than I’d be able to buy it, but then I can’t lend it to friends and family, pass it on to my kids or view it again 50 years down the road when its gone out of print.
Putting aside the tyranny of streaming-only, at least you can access your media on your computer, where it is comfortably stored, right? Well, only if you’ve adhered to Apple’s way of doing media, and haven’t strayed to any of the other terrific and much more popular video formats out there. Apple TV remains closed, and as a result, any machine running Boxee hooked up to my TV remains a better option, even considering the price differential for the original purchase.
Speaking of price, let’s look at that $99 tag Jobs dangled in our salivating faces. It’s almost an impulse buy at that point, and I know a few people who indulged that impulse. But you know what else is a good price? $10 for a fancy razor with replaceable heads. Those heads will cost you $40 for a four-pack, sure, but that’s later. Apple isn’t going to make most (if any) of its money on the Apple TV itself (though without much onboard storage, it’s cheap enough to build), but on the gobs of media you’re almost forced to purchase from them as a result.
The inclusion of Netflix is one of the few genuinely impressive things about the new Apple TV. It means that people who already have a subscription don’t need to go in for Apple’s pricier rental options, and the implementation looks pretty impressive as compared to its counterparts on other platforms.
But even if you exclusively use the Netflix option, which means being behind in terms of release dates on TV and movies, you’ll end up paying much more for the hardware than you probably would if you opted for a media PC (or Mac mini, even) purchase and just depended on free streaming from network websites. Occasionally you’d still run up against content you have to pay for, but you can own it, and you options for sourcing that could equate to a much better per purchase price.
In general, I’m willing to deal with Apple’s closed systems and devices because of the trade-offs I get in terms of quality. But third-party apps and desktop software make it possible for me to still use Apple hardware with my own content, regardless of format and point of origin. That’s not likely going to be the case with the Apple TV, and until it is, it won’t find a place in my living room, regardless of cost and cosmetics.
Written by Darrell Etherington on September 2nd, 2010 with no comments.
Read more articles on Apple TV and Commentary and Hardware and Problems and Update.
This week’s media event could finally confirm (or scuttle) rumors of a new Apple TV device. If it’s based on iOS 4, like many pundits believe, there’s strong potential for this device to feature its own App Store. If such a future came to fruition, Apple could be facing another round of tough negotiations with content producers like it faced when it introduced the world to digital music and movie downloads. If it’s successful though, Apple could revolutionize the television content marketplace.
The Current Marketplace
Consider how you currently watch TV, which could be through broadcast or cable television. If you watch cable, you pay a fee to a provider (like AT&T), which allows you to see certain channels based on your subscription (though that model doesn’t seem to be panning out so well anymore). The providers pay a portion of your subscription fees directly to the networks (an average of about 26 cents per channel). Networks make additional money with the ads they run on their channels as well. If a network doesn’t show ads, you can expect they charge the cable provider substantially more than 26 cents per channel, and the opposite is true if they show an average amount of ads. This is all relative and pretty much a standard business model.
How Apple Could Shake Things Up
With the introduction of the App Store, we’re starting to see how some industries are shaking up the status quo. For instance, consider the magazine industry. Wired now provides its app directly to consumers, and can sell a digital version of its magazine at a comparable price (per issue) to the newsstand price. Yet, without having to incur the printing costs behind it, and even while giving Apple 30 percent of the revenue, Wired pockets a lucrative profit.
Can the same model work for the television industry? Network providers already provide their content through iTunes, and, through negotiation, have arranged to sell content at $2-$3 per episode. Rumors of 99-cent TV shows have been rampant but unfulfilled, simply because of the tough negotiations required to make it happen. Could the solution be to simply bring an App Store directly to the TV? If so, similar to the Hulu or Netflix app, a network provider like HGTV (s sni) could provide its own app for free and charge within for in-app content, like episodes of a show. If it wanted to provide streaming content of the past few episodes for free, it could do so. As long as it approves of the 70/30 profit split with Apple, it would maintain a lot more control over its content and pricing. The networks would be happy, and Apple would be happy. Networks could still run ads as they wished and earn even more profit.
Who would stand to lose from this? At the outset, nobody, but if such a solution were to become mainstream, then cable providers could begin to see a dip in subscriptions. Why would most consumers pay a monthly fee of $30 to over $100 if they only want to watch a certain show or a certain network? Instead of paying for needless extra content that consumers never watch (based on their own viewing habits), they can pay for content that matters to them. The providers are aware of this, which is why many of them also provide internet service (think about Verizon, Comcast (c cmcsa) and AT&T).
I think an App Store on the TV could really revolutionize how we watch and engage with content.
What are your thoughts? A new Apple TV could revolutionize the television experience. Do you think it will take off? I’d love to hear what you think, so please share your comments!
Related GigaOM Pro Research: 3 Things Apple iTV Must Do to Succeed
Written by Christopher Ryan on August 30th, 2010 with no comments.
Read more articles on Apple TV and Commentary and Entertainment and Hardware and Television and apps and network.
UPDATE: Apple has sent out press invitations for a music themed event for Sept. 1. Historically, Apple has used the September event to launch new versions of its iPod line.
Bloomberg is now reporting the next generation Apple TV, rumored to be renamed the iTV, will be unveiled at the annually anticipated Apple event next month.
The event, which will supposedly take place on Sept. 7, will likely also launch the new iPod touch, which is rumored to have a Retina Display like the iPhone 4. Cameras and FaceTime support are also very likely. However, it’s the new Apple TV and associated content that is the focus of the latest rumor.
According to Bloomberg, Apple is in advanced talks with ABC, CBS, and FOX, as well as Time Warner, but possibly not NBC, to bring $0.99 rentals of television shows to the iTunes Store, something first unearthed by NewTeeVee a few weeks ago. Television shows would be available for rental within 24 hours of air date, and, similar to movie rentals, consumers would have 48 hours to finish viewing once started.
While a $0.99 rental is significantly less than buying an episode for $1.99 or $2.99, it appears that Apple has now abandoned ambitious plans for a subscription-based model for video at $30 a month.
As for the Apple TV — or possibly the iTV — it’s said to be getting both a price drop to $99 from $229, as well as an unspecified reduction in hard drive size. The emphasis would now be on streaming content, and that could be in keeping with rumors of Apple offering a cloud-based video-on-demand service.
It will be four years ago next month that Steve Jobs declared “Apple is in your living room” with the unveiling of what was then called the iTV. That became the Apple TV when it launched in 2007, followed by the “Take Two” relaunch in 2008.
To date, Apple has never released sales numbers for the Apple TV, and in 2008, Steve Jobs admitted to Fortune that the device, as well as every other set-top box had failed “– everybody’s tried. And everybody’s failed. We failed, so far.” It was at that time Jobs declared the Apple TV to be a “hobby” for Apple.
Unfortunately, that’s not likely to change if this latest iteration of the Apple TV turns out to be real. Simply lowering the price of television rentals and the device itself isn’t enough. The average show of 20 or so episodes would cost $25 a year, assuming no season pass discount. If you watch more than a few shows, cable television is still a better deal.
In order for the Apple TV, or iTV, to succeed it must transition from being an iTunes Store kiosk in the living room to an entertainment portal. That means allowing access to Netflix, Boxee and other video services. It also means a few simple games and apps, possibly using an iPhone or an iPod touch as a controller.
Whether this will be a re-imagining of Apple’s set-top box is clearly up to Apple, but based upon past releases the rumored iTV is looking like another rerun.
Related GigaOM Pro Research: Three Reasons Over The Top TV Apps Will Beat Big Cable
Written by Charles Jade on August 25th, 2010 with no comments.
Read more articles on Apple TV and Hardware.
It’s been a while since Apple’s rumor mill has held the attention of the buying public with anything like the hype that led up to the release of the iPad and iPhone 4, but the rumored iTV is on track to come pretty close. The iTV is what sources are saying will replace the Apple TV, despite any qualms a certain British television network may have with the name choice.
Digg founder Kevin Rose is the source of the latest rumors, and he’s reportedly got the inside track on what’s going down with the iTV at Apple. As rumored, Rose says the iTV will be powered by iOS, bringing it into the fold along with the iPad, iPhone and iPod touch. The iPad itself will feature prominently in the iTV redesign, as a huge, awesome remote control. Along with iOS will come apps, too, according to Rose, and you’ll get everything for the low price of $99.
If Rose is right, expect the iTV to look a lot like the Google TV devices the search giant unveiled at its presser in the spring., minus the hardware partners, of course. As a result, we’ll probably end up with another battle of the OSes on our hands, one which mirrors pretty much exactly that going on now between the iPhone and Android devices.
Digital delivery of film and television content is definitely the future, whether or not cable and satellite providers see the writing on the wall yet. The living room may not be a central part of Apple’s current business model (Jobs famously referred to the Apple TV as a “hobby” in an interview last year), but for consumers looking to unify their digital lives across a variety of platforms, you can bet it will become important in terms of both at home and mobile device purchasing decisions.
Related GigaOM Pro Research: Three Reasons Over The Top TV Apps Will Beat Big Cable
Written by Darrell Etherington on August 23rd, 2010 with no comments.
Read more articles on Apple TV and Hardware and apps.
Over the last few months, there’ve been several articles written about the possibility of a future update to the Apple TV based on iOS, the operating system used in iPhone, iPod touch and iPad. These rumors have taken on a life of their own on the Internet, in large part because everyone desperately wants them to be true.
The iTunes Store is a Dead End for Video
Apple sits in an enviable position in the smartphone market, has pushed the tablet category into the mainstream consciousness, and its Mac lineup is selling like hotcakes. It’s the king of music retailing as well, but movies and TV have been somewhat anemic. The iTunes store does not have the dominant position with video content that it does with music. The slow buildup of the video category has led Steve Jobs to refer to the Apple TV as a hobby: something for Apple to continue to dabble in while the market matures.
So why has it been so slow? Because Apple was able to reach the top music retailer spot so quickly, media companies have been reluctant to concede control of electronic distribution to Apple. They feared the same fate as the record labels: their electronic plans dominated by a powerful distribution partner. NBC Universal even pulled its content from the iTunes store for a time during a public spat with Apple. NBC eventually returned, but the industry has still been slow to move on ideas like subscription services or lower pricing through iTunes. The pricing model for video content in the iTunes store has been static for years, and it’s not working.
The entire model for iTunes Store is based on owning the content you purchase. Unfortunately, the video content on the iTunes store is lower quality than what you can buy for the same price elsewhere. Why would anyone want to own mediocre quality content? The future is streaming for convenience and ownership for full HD.
How the iPhone Changes Everything
The explosive growth of the iOS platform (iPhone, iPod touch, and now iPad) has the potential to change Apple’s relationship to media partners. While there has been little change in the iTunes Store, there have been some innovative efforts in providing television shows and movies over the Internet.
iPhone apps provide a way to bring together these two worlds. Media companies can develop apps to bring their properties to consumers, while still retaining control over pricing and establishing a direct relationship with the consumer. The Hulu and Netflix apps are free in the App Store, but require a paid subscription to the respective service to access content. Of no small significance is the fact that Apple does not get one penny from these subscription services. And Hulu and Netflix know exactly who their customers are and how to reach them. App Store developers will be quick to tell you that one frustration is that they have no idea who is buying their apps, and no way to respond to people who complain in App Store reviews. Apple simply does not provide that information to developers.
You can see why media companies would be far more eager to pursue this path where they control pricing and have direct contact with their customers.
An End Run on the iTunes Store
In this scenario, Apple will miss out on a percentage of video content sales. It would be convenient to leap to the conclusion that this would upset Apple and it might take steps to prevent this from happening, but content sales isn’t what Apple is after.
I think the more likely scenario is that Apple continues to view the iTunes Store as the means to an end: selling more iOS devices. While the iTunes store contributed $1.2B to Apple’s revenue this past quarter, I suspect only a small portion of that number comes from video content. In comparison, Apple pulled in $2.17B on the iPad in the same quarter. I would bet that the margins are a lot better on the iPad than the iTunes Store as well, contributing far more to earnings than content sales. Apple will willingly give up growth in content sales in order to make sure that the App Store remains the preferred software distribution channel and iOS devices are the preferred hardware platform for media companies.
Great for Media Companies, Great for Consumers
The big media companies obviously win in this scenario. I think it also opens the stage for small media companies and startups to grow, because the App Store is a pretty level playing field.
Consumers also benefit. More choice, more pricing models, more innovation, more content. The opportunity provided by apps, multitasking in iOS 4, and remote control devices like the iPhone, iPod touch, and the new Magic Trackpad will create a great platform for developers and media companies to deliver existing content and innovative new features. Think Chopper 2 on the TV, controlled by an iPhone, and Scrabble on the big screen with iPod touch tile racks, and new apps that are designed to be controlled by a remote or Magic Trackpad. Maybe someone will finally figure out how to create compelling interactive content for movies that does not get in the way of actually watching the movie. Wouldn’t that be amazing!
Apple TV is Dead, Long Live Apple TV
The current Apple TV, a device where you buy and manage all your video content through the iTunes Store, is dead. But the next Apple TV, where media companies can produce apps to deliver their content to consumers, will be huge because it opens the marketplace back up to innovation again. I can’t predict if Hulu and Netflix will continue to ride the wave and hold their leading position, but I can guarantee that in an open market, someone will figure out a model that works for consumers. And Apple will be there waiting with the best devices for consumers to access that content.
Related GigaOM Pro Research: TV Apps Market to Hit $1.9 Billion by 2015
Written by Weldon Dodd on August 13th, 2010 with no comments.
Read more articles on Apple TV and Commentary and Hardware.
« Older articles
No newer articles
