Despite the fact that Steve Jobs and other Apple execs like to refer to the Apple TV as a “hobby,” that’s always struck me as a rather inaccurate term. A hobby, after all, is something that you pursue out of passionate interest—two words you’d be hard-pressed to use in Apple’s attitude towards the little set-top box. Then again, I suppose referring to it as “a desperate attempt to extend their presence into the living room video market” is a bit wordy.
The Apple TV is, to my mind, Apple’s beachhead in TV-based entertainment. They want consumers to be aware that there is a living room component to the their media strategy, even if it’s not fully developed yet. However, having established that foothold, Apple’s still made only a small effort to expand their presence further. By all accounts, Apple TV Take Two, introduced at Macworld this year, is an improvement on the first iteration, offering movie rentals, a refined interface, and other major features. But what Take Two says to me most importantly, is that Apple TV Take Three is inevitable.
Silicon Alley Insider’s Dan Frommer clearly thinks this is the case too, but in his mind, this requires a hardware update.
Apple’s first step should be to throw a disc reader in there and make it a high-end DVD player replacement, something people will still need/use for years, for $199 or less. Then, get a good deal from Sony (SNE) to offer a premium Blu-ray edition for cheap — $399 tops; ideally $299 or less. And now you have a much, much bigger potential market than if Apple TV were just an iTunes player.
I’ve long stood by the idea that Apple envisions the Apple TV as a gateway to the future of television-based entertainment, whereas incorporating a physical media reader would be a concession to the past. But given the apparently low adoption rates of the Apple TV, there is some merit in Frommer’s argument that what the Apple TV needs is a kick in the pants from the outside world.
The digital video market is in a state of flux right now. While there’s a temptation to compare it to the pre-iTunes digital music market, the simple fact is that the world is a much more connected place now and people are, by-and-large, more tech savvy than they were five and a half years ago. When the iTunes Store first launched, the difficulty was convincing people to buy their media in digital form, rather than buying CDs. That’s not the obstacle that digital video has to overcome—people are comfortable consuming their media in digital format nowadays. The difficulty now isn’t just making an argument for the digital experience over the traditional method of media dissemination; it’s giving consumers the digital experience that they want.
Because of the fractured nature of the digital video market, this is one place that Apple’s reliance on its own ecosystem might be holding them back. As Frommer suggests, imagine that you could use the Apple TV to consume not just iTunes video or YouTube, but content from places like Hulu, Netflix, or the numerous television network sites. After all, that’s the issue in the video market: as much as content as there is out there, there is no single, monolithic, one-stop shop for online video. That’s why if you want to consume digital video, you’re forced to do it on your computer—it’s the only place that lets you access all those different sources.
The problem there, of course, is that a lot of people don’t like to watch their video on a computer screen—and who can blame them? More and more people have giant flat screen televisions in their living room—not to mention comfy couches that seat more than one person. That’s like lush farmland, ripe for conquest—whoever gets not just their foot but their whole body in the door there is going to have a huge advantage.
Apple’s not the only player in the game, though. Microsoft, Roku, TiVo—they’re all playing for inches on your entertainment center. But nobody’s yet managed to marry a comprehensive digital video experience with the living room. All of these providers—Apple included—are trying to tie you into one venue for watching your video: they all package a service and a a device.
That makes the buy-in larger than just the device alone. Imagine if, when Apple had launched the iPod, it had only played their own proprietary format and not MP3s. In fact, don’t just imagine it—cast your mind back to Sony’s first attempts at digital music players, which relied on the ATRAC music format. Despite all the arguable technological advantages inherent in ATRAC, eschewing a popular, widely available format wasn’t exactly a recipe for even moderate success.
I’d argue that the closest thing to a popular, widely available digital video format is—love it or hate it—Flash. Figure out a way to bring the vast catalog of Flash-based video to a TV-centric living room experience, and that’s a significant flag being planted (and I’m not counting Apple’s YouTube implementation, since the video they’re delivering is re-encoded by YouTube into H.264, something I doubt Apple will convince most other content providers to do).
At the moment, Apple’s not winning in the digital video market—but nobody else is winning either. I don’t think that having a DVD, Blu-ray, or even a DVR is the road that Apple wants to take, but making the Apple TV a wider portal to other Internet video—especially ad-supported streams—could go a long way to boosting sales of the set-top box.
Just got new Apple TV. It won't sink with iTunes 8. ITunes device list doesn't even see my Apple TV.
Very disappointed.
Very nice editorial. Here are my thoughts with what Apple went wrong with take two:
1. Apple should have made prescription based model, not for the music, but video, as video is a lot more appropriate for subscriptions.
2. Rentals are too expensive and limited, esp. with HiDef content and subtitles (hearing impaired folks are SOL with Apple TV.)
3. Any video device with a HD SHOULD be able to record SOMETHING. Add a DVR and Allow people to directly transfer camcorder content.
I hope take 3 incorporates all of these things, if not, it will never interest me.
I have said this once, and I will say it until Apple learns: An Apple TV that does not play DivX/xVid is like an iPod that does not play mp3's..
Once it does, I will buy one.. throw in the dvd player, and I will buy two!
I think the success of iTunes and the iTunes store is that you can take your current CD collection and put it into iTunes easily, and that has eased people into the idea of downloading music.
With DVD's you cannot easily put your current collection into iTunes so people don't think iTunes for video.
If people had lots of video on their computers, or could import their current collection of DVD's onto it, they would then want to buy an Apple TV, i think.
This is what got me to buy my first iPod. First I imported all my music into iTunes, then i started buying songs from iTunes, and then i bought an iPod because i had all this content in iTunes I wanted to listen to elsewhere.
Incorporating physical media playback is a concession to the past. The sluggish adoption of the "champion" Blu-ray standard by consumers suggests that it wouldn't even be a profitable one.
Time shifting would make the ATV a game-changer. Tivo's success in media took place at the intersection of volume consumption and ease-of-use. People watch a lot of network/cable/satellite TV. Tivo made it easy and fun to do it at their leisure. Apple is great UI. Marrying the functionality of a set-top recorder coated with Apple's yummy UI frosting and the media span of iTunes would make the ATV a juggernaut in the living room.
The Apple TV is a killer device. Using VisualHub for conversion, migrating your video is simple.
INTERNET surfing from the couch via Apple TV would make this device awesome.
Opening the device for development (via the app store) would open the flood gate for livingroom greatness.
I have an apple TV, I loved it when I buy a show off of itunes. I hate it when I end up with shows in AVI format.
I use my PS3 to stream movies and tv shows off my computer now more than my apple tv, simply because it supports more formats.
This is something apple should fix first. Make it format agnostic, I know it undermines itunes...but so does the ipod and itunes is doing fine.
and it certainly doesn't need a dvd player, I was happy when I heard the wii won't didn't have a dvd player. Everything I own plays dvds. I don't need another one.
I have 2 Apple TV units, and about 360 movies in my iTunes library (which resides on a 1 TB external hd connected to my iMac). I stream my movies to both untis with absolutely NO problems. Yes, it took a LONG time to rip all of the movies onto the the hd, but it so worth it. I never have to touch my dvds now. To the first poster having problems getting iTunes to recognize your Apple TV. It's most likely because you are using a firewall which is blocking it. I use Itego on my macs and I don't use the firewall component because my Apple TV's wouldn't show up. Now I just use the firewall that comes with Leopard, and the virus protection Intego offers. No problems with the Apple TV's showing up since then. Note: it is not good enough to simply turn off the Intego firewall. It will still block Apple TV even if disabled. You have to actually remove the firewall component. I found this out after spending a lot of time talking to Apple support.
The disc is the popular digital video format. I still think that iTunes needs to embrace DVD/Blu-ray the way it embraced CDs. Get all that video content people own into FairPlay-protected video files (I would prefer to skip the FairPlay, but let's be realistic). Make it as easy to rip a video disc as it is to rip an audio disc (and no, Handbrake isn't that easy) and you might have something. Wrap an iPod-optimized video and HD or DVD-quality video into one bundle so the user doesn't care what s/he is working with (the dual-quality HD downloads on iTunes is too clumsy and error-prone) and include DVD extras as free optional downloads in the iTunes Store and you might just have success.
Sure, bring in all that other content while you're at it. But I'm not buying a device to play videos that were produced for an audience sitting at a computer. Until a device can do what you suggest, no one is producing the video content to drive the device. Chicken meet egg.
If the Apple TV isn't selling well, I suspect it has as much to do with Apple marrying it to HDTVs as anything. I don't have an HDTV and the Apple TV is actually the strongest motivation for getting one. Maybe Take 3 should have S-Video or Composite video out. There are an awful lot of TVs out there that don't take anything else (IIRC, you're in the same boat, Dan). Making deals with Best Buy and Amazon to offer discounts on an Apple TV when you buy an HDTV wouldn't be a bad idea either, I'd prefer that to a Blu-ray player.