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The big news from Apple’s press event today was the re-introduction of Apple TV. The device, which is available immediately for $99, allows users to stream 720p high definition video over the Internet to their HDMI capable televisions. TV shows can be rented from ABC and Fox for $0.99, movies can be rented for $3.99 on the same day that they’re released to DVD, and Netflix users can stream that service’s library of content. Even a users locally stored digital media can be streamed to their TV by Apple TV.
The revamped Apple TV is an admitted attempt to bring Internet streaming technology out of the “hobby-stream” and into the mainstream. Competitive products from Roku and Boxee, as well as upcoming offerings like Google TV, all give users varying degrees of freedom from traditional cable and satellite based subscription services. The niche market to which these devices play is growing with each product iteration, but remains minuscule compared to the markets of the incumbent providers.
None of these new Internet media streaming devices or services is yet robust enough in either its available content or interface to supplant traditional providers such as Comcast and Verizon. For many subscribers to cable or satellite TV service, HDTV and DVR’s are still the driving force of service upgrades. The general population still needs time to adjust to the changes in viewing behavior these mature technologies afford before they’ll be willing to alter their viewing habits yet again.
This isn’t to say that early adopters won’t drive early growth as they alone adapt to some form of Internet streaming media offering. Many products from several competing companies currently offer users various visions of what the future of TV will entail. Unfortunately, this fractured market without standards could work against companies like Apple and Google as the legacy providers develop similar competing services that offer just enough functionality to prevent subscribers, already grappling with the last generation of TV technology upgrades, from “cutting the cord.”
We saw this happen with DVR technology as content providers let TiVo cater to a market of enthusiasts while they developed inferior knock-off product offerings with which the market was flooded via their massive customer base.
Apple TV could face TiVo’s fate in its current incarnation.
Content providers have fought a la-carte delivery plans for decades because of the very benefits these plans provide consumers. Most people realize that they never watch a large percentage of the channels available from their content provider – and that they’re paying unnecessarily for these channels.
Technologies like Apple TV are no different than a la-carte plans and the cable companies know this. They know that their $100 a month subscription doesn’t stand a chance against $0.99 TV show rentals available from Apple TV. Even families who watch more than an average amount of TV stand to save money via this new model. The only thing preventing them from switching is the fact that no single alternative from Apple, Google, Boxee, or any other company has the breadth of available content to which they’re accustomed. And by the time an alternative comes close, the legacy providers will have a “knock-off” offering with which they can retain customers.
I fully intend to enjoy Apple TV, Google TV, and other products in this space as they become available. I’ll enjoy them for what they are presently – compelling devices for early adopters, not what they’ll ultimately be when the masses adopt some future, cable company inspired version of this subsequently mature technology.







