Apple TV’s next moves?

Before the Christmas holiday, rumors of Apple’s overtures to the networks abounded like so many visions of sugar plums. Journalists and bloggers posited about the effect of Apple’s entrance into the subscription television market. Most of the analysis was solid. The Seeking Alpha blog featured this succinct write up. Most expect a successful Apple offering would threaten cable and satellite subscription models. Others note that an invigorated Apple TV could put the pinch on the Netflix Roku service. Light Reading’s Cable Digital News noted the following.

While cable operators likely won’t face an immediate threat from the subscription service Apple Inc. (Nasdaq: AAPL) is purportedly pitching to major content suppliers, the offering may instead put the hurt on over-the-top video service providers like Boxee and Roku Inc.

It should be noted that Apple TV employs a hard disk. Content is downloaded before it’s played. Roku receives streams, so it’s a lower cost, lower footprint device. Most importantly streaming allows more delivery flexibility. Netflix doesn’t care whether I watch my content on a PC or a TV. Apple TV is anchored to a television. While an iTunes account can be managed from multiple devices, content needs to be downloaded to each to play it. Even with improved progressive download performance, this model has its limitations. One blog noted that a full season of an HD network television series can take up to 50 GB of hard disk space. So there’s a limit to how much content can be delivered to an Apple TV.

For Apple to leverage the strong iTunes brand it has to unhitch content from the device – a fundamental change in business model for a device manufacturer. But if any company has shown the ability to adapt to the digital media marketplace of the early 21st century, it’s Apple. If Apple succeeds at getting content deals in place, I expect a next-generation Apple TV to emerge shortly thereafter.

One Thought on “Apple TV’s next moves?

  1. Hi Frank,

    Apple’s acquisition of Lala foretells a push of iTunes as a web-service/data-portability model, starting with music streaming options. One hopes video will follow.

    I am an Apple TV owner. It was a bit of a misfired purchase decision, given that I already had a Mac Mini connected to the TV via HDMI, so the only thing it gives me is HD movie rentals—a totally arbitrary value-add that iTunes on the Mac Mini *should* support.

    I have the lowly 40GB model and it’s really just temp storage for the rentals. I don’t sync anything to it. All the media I *own* is in the Mac Mini’s iTunes library which itself resides via a shortcut on an external 1TB FW drive (thinking about a Drobo for redundancy). So I just switch HDMI inputs.

    As to the Mac Mini and the owned media I store there, using the recently updated Library sharing, I can listen/watch on any iTunes equipped Mac (or PC, if I had one) in the house over WIFI. So no need to copy the files over (although interestingly, this network sharing still requires the DRM authorization *as* *if* I copied the files over).

    Mind you, that all breaks down if I try to play the *HD* (~4500 kbps) Mad Men episodes I bought… they crap out on the WIFI. So for HD content, yup, I’d have to dupe it around the house, and, yeah, that season (which includes SD versions for free) eats up ~75 GB.

    In the end of course, your’re right, all of this becomes a lot more interesting if/when iTunes becomes a streaming service, especially on the video side of things. Knowing Apple, the likelihood of this ‘lighter’ model extending to unrestricted device/client data portability is iffy at best.

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