Fuzzy picture for Apple TV
This has been quite a year for Apple, but Steve Jobs' magic wand doesn't always work.
In March, Apple unveiled Apple TV, the company's attempt at tackling a question that has eluded the PC industry for years: how can we get people to watch content delivered over the Internet in their living rooms on their big-screen TVs? When he announced the product last September, Jobs said that Apple TV "completes the story" of Apple's bid to reinvent the way people watch movies and television shows.
(Credit: CNET Networks)Now, as we head into the holiday shopping season, it doesn't seem that all that many people are interested in products like Apple TV. Apple has been a pretty good judge of consumer taste of late, but few companies get a hit every time they step up to the plate.
"That category of devices is so nonexistent," said Ross Rubin, an analyst with The NPD Group, which tracks almost every imaginable retail segment. "It hasn't really evolved to the point where we've been tracking it as a category."
As a result, it's difficult to get a sense of how many Apple TVs have been sold. Apple employees were given last week off for the Thanksgiving holiday, and company representatives were therefore unavailable to comment.
Apple doesn't report shipment totals for Apple TV like it does for Macs, iPods, and iPhones. Revenue from Apple TV is lumped in with a number of other segments on Apple's financial statements, and it's also recognized on a subscription basis over a period of two years. But it's clear that Apple TV is quite a bit lower on the company's priority list behind the Mac, iPod, and iPhone divisions: Jobs even called it a "hobby" during the D: All Things Digital conference.
To be fair, it's not like any company has figured out how to make this work. Despite a lot of talk, and some interesting new products, the Internet is still not the delivery vehicle for prime-time television shows and movies; that box is already in your living room, and it came along with your cable or satellite service. There's no need to have something that links your PC or Mac to your TV if you don't have very many movies or television shows on your PC or Mac.
And even if people are watching videos on their PCs, many aren't even aware that there are products that can do these kinds of things, according to Joyce Putscher, an analyst with In-Stat. Retailers aren't sure the products will sell, so they don't carry them or display them as prominently as other types of tech products.
"Video drives the television experience, and while the PC has become the hub for photos and music, they haven't become great storehouses of commercial video," Rubin said.
And a virgin Apple TV is designed to only get paid video from the iTunes Store or free video from YouTube. There are a lot of popular shows and movies on the iTunes Store, but there are also lots of other sources of video on the Internet. Apple TV doesn't come with a browser, and high-definition shows aren't offered at the iTunes Store. You can hack it to run Mac OS X, and therefore lots of other applications, but most people aren't going to do that.
There are signs, however, that the long-awaited promise of Internet-delivered movies and television shows is starting to come together as the networks experiment with delivering their shows through their own Web sites. If that takes off, a crippled Apple TV is going to prevent owners from watching a wealth of free content that's becoming available on the Internet.
"There is one key recent development that would affect Apple TV and products that will try to compete, the quick and expanded move for studios to make their content available for free as long as you look at the ad," said Chris Crotty, an analyst with iSuppli. "But there's no (easy) way to view this ad-supported content on the television, which is ironic considering where it originates."
It will be interesting to see what Apple cares about more if networks actually pull off what they are promising to do with their own distribution vehicles: Apple TV or iTunes? If people show they want to download or stream videos from the networks or other sites like Amazon.com's Unbox or (shameless plug) CNET TV, they'll want a way to display that on the big screen.
Assuming that all comes to fruition, Apple could be missing a significant hardware opportunity if it decides it wants to protect the iTunes Store franchise at the expense of an Internet-capable Apple TV. Of course, if it were to give Apple TV owners the option of accessing free content, we'll find out if people want to pay to own ad-free content as Jobs maintains or endure ads to avoid paying a couple of bucks for something they'll never watch again, which could hurt iTunes sales.
Still, Crotty made an interesting point on that score. "Do the math: there's 6 minutes of commercials (on a 30-minute show), if you value your time at 20 an hour, there's your $2," Crotty said.
Until this new model shakes out, cable and satellite companies remain in firm control of the living room. But that doesn't necessarily mean Apple TV can't be a success in its current form; it's not going to replace a set-top box anytime soon, but could it replace a DVD player?
That was the company's emphasis for Apple TV in its early days, with the iTunes Store as the Blockbuster or Netflix equivalent. "It makes more sense to do online distribution of content than it does to be pressing media onto shiny plastic discs, and packaging them up and putting cardboard around that," Crotty said.
The issue here, though, is that the rental/subscription model for movies and TV shows is very much entrenched in the consumer's mind. Apple has strongly resisted a subscription model for the iTunes Store to this point, and Jobs has said on several occasions that he doesn't think people are interested in that type of service. Of course, right up until the company released its first video iPod player, he also said for years that people weren't interested in watching video on iPods. Now the entire iPod lineup (sans the Shuffle) is designed with video in mind.
In June, the The Financial Times reported that Apple was considering an online rental service, and Apple bloggers were recently excited at the discovery of code in the latest version of iTunes that hinted at such a service. So the same pattern may be at work here.
With Apple TV, Apple fulfilled its usual goal of coming up with something sleek and quiet that people wouldn't necessarily mind putting in their living rooms, and the device seems relatively easy to set up and use.
But it doesn't come even close to fulfilling the promise of Internet-delivered video: the ability to watch anything I want, whenever I want it, without having to pay for all the useless channels I never watch. Nothing does yet, unfortunately, so I make do with the 250-plus channels I now get plus my digital video recorder.
If you want to disrupt an industry, you have to come up with something significantly different, or something that delivers an experience that wasn't possible before. Apple TV doesn't do that, and until it does, it will still be a hobby.
be if it adopted the Windows Media Center PC mentality but used
open formats instead of DVR-MS (really cool but no editors
available today).
Media extenders will become a commodity. I think the real money is to be made in content aggregation and deliver.
Bottom line: I-tunes makes sense; AppleTV does not.
needs to work with as many format and media venues as
possible.
Apple needs to partner with Blockbuster, NetFlix, etc. to allow
customers 1-click access to renting movies online. I'm sure
they'll come out with renting on iTunes as well but think AppleTV
should work with ALL vendors. It would be a win-win situation.
If they added movie rental support, had hard-drive choices 2-3
times larger, web video support other than YouTube, and added
a DVD drive, I would buy one in a heartbeat!!
other things to be in place. You have to not only buy an Apple
TV, you may have to buy a new digital widescreen TV, a wireless
router, more storage. If you want off-air delayed replay you
need an Elgato EyeTV which can't run on the Apple TV. The
iPhone is actually a better Apple TV when it comes to fitting in
with legacy TV sets. It does a great job of delivering shows to
analog sets. Once I get these other things in place, I imagine
Apple TV in bedrooms instead of a stack of AV gear, however,
you really need a Mac MIni or something more dedicated to use
as a living room hub since it is not ideal to try to run it all merely
from your laptop or office Mac, especially if you want two tuners.
Would have gotten one or two by now if they'd just done an
analog out. Cheap. I look forward to the day when I don't have
to search endlessly for DVDs.
child. The existing product is great -- whatever is on iTunes is on
your big screen, and it is fast and reliable, like a huge iPod.
However, its potential certainly hasn't been exploited by Apple, and
that's a shame. We watch movie trailers, movies downloaded from
iTunes, youtube content, and our picture albums using the device,
and love it! But it could do so much more, to be sure. Hey Jobs:
get with the program!!
At least now the ability to upload back your own videos to your Series 3 or HD TiVo has been added (October 2007), even when one could do that to the older non-HD TiVo models for years.
2% of all the TVs out there. The reality is that a massive
percentage of TV viewers out there don't have an LCD/Plasma
HD TV. Many of us still have the basic big ugly TV and have no
desire to get rid of it any time soon (especially if it means having
to drop a grand for something that in my opinion looks worse
then my current setup).
The point is, I would have gladly purchased an Apple TV, but it
doesn't work with my TV. I have a sincere feeling that I'm not
the only one. Apple cut itself out of the majority of the market
for no apparent reason and thats why the Apple TV failed.
"Then there is the peculiar detail of the settlement that Apple's license specifically excludes one issued and three pending Burst patents on digital video recorder (DVR) technology, yet Burst promises not to sue Apple for infringing these patents for which it is specifically NOT giving Cupertino a license," Cringely writes. "How odd is that? Isn't saying you won't sue someone for infringing the same as giving a license?"
So, Burst will not sue Apple if they incorporate DVR technology, but they will not license it. Will Apple add DVR technology to the Apple TV? It seems like it is more of a possibility now.
about it. While focusing on Apple TV's current standard video features
only can lead some to call it 'crippled', those who can think outside of the
box are left smiling.
Apple TV makes my entire music collection available in multiple rooms. A
Mac mini-based entertainment center with Bose speakers in one room
and an Apple TV linked HDTV with surround sound in another fills the
appetite of this music lover. Sharing new photos from the comfort of a
couch or bed instead of in front of the computer is quite pleasant. As for
video... Handbrake, Eye TV, YouTube and iTunes can drum up many hours
of video entertainment.
Don't forget, Apple TV is a hard drive in a sleek box that can easily be
updated at any time. It could ultimately sidestep the HDDVD vs. BluRay
war. When iTunes starts offering rentals, I may cancel my Netflix account.
Food for thought.
recorder, it would be worth getting. It is nice that Apple now lets
you watch stuff like YouTube videos, but it is still limited. For the
money, I prefer a TiVo.
- It's all about bandwidth
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by tundraboy
November 26, 2007 8:05 AM PST
- Without the internet bandwidth there isn't much you can do with AppleTV or any similar device. All the neat things people expect from such a device; HD video, rentals, real-time streaming, etc. -these all require more bandwidth than currently available. Until the bandwidth is available there's no point in pouring more development money into the AppleTV.
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