Apple TV: A Device We Don't Need?

Listening to Steve Jobs yesterday, I really, really, really wanted Apple TV. 

Then the Jobs force field left the stage, I had dinner, and woke up this morning scratching my head saying, "Nah, never mind."

Turns out I'm probably not the only who may find this $300 gizmo resistible.  Like many early adopters, I already have Tivo (TIVO), and a big screen, a DVD player/recorder, and a Wi-Fi network in the house. How many more viewing options do I need?  And to watch what?

At least one media industry analyst agrees that Apple's new box is solving a problem I don't have, and probably many others don't have. "What value is Apple offering the consumer by linking up video on the Internet to their television set," asked Todd Chanko, who covers TV and filmed entertainment for JupiterResearch.  His answer is, "Not much." 

Giving people the option of watching "Lost" on their PCs after paying $1.99 to download it from the iTunes Music Store isn't much given that the free broadcast is so available on TV, cable, satellite and on-demand on the Net.

Listen to Todd Chanko talk about Apple TV.

And besides, there’s not that much interest in TV shows and video on the Web, anyway.  Chanko cited a survey by his firm in 2000 which found 12% of Internet users downloaded video programming.  That number  declined in 2004 and 2005 and stood at 11.6% last year.

"Maybe one can assume Apple's goal is to facilitate the viewing of YouTube videos on your TV," said Chanko.  "But then, do folks really want to watch a two-minute clip put together by some frat boys on a TV? Maybe late at night while checking e-mail, but that doesn't strike me as a living room experience."

A product like Akimbo, which also downloads programs and puts them on TV, meshes better with how people use TV.  It has deals with A&E, for example, and says, "Look, we're offering you the entire library of A&E on demand.'  Chanko responds saying, "Try getting that from your local video on demand channels.  It delivers a much, much, much deeper library of TV content.  That makes sense."

The analyst also talked about research that's found 92% of people prefer to watch movies and TV shows on their TV.  Only 6% want to watch them on a PC. "High value content is best viewed on the device for which it was designed," Chanko said.

Disclaimer: I own shares of Apple (AAPL) and Google (GOOG).

Comments

[preinitz:]

Akimbo does not work with a Mac.

2007 Jan 10 04:01 PM

[Michael Ch...:]

Could not agree more. At face it appears useless.

However, this is the same question i asked myself years ago regarding the ipod and itunes. Why pay when its free? Well that has answered itself now, and i use itunes exclusively. The key will be bringing in a slew of high quality content from all the networks. If that can be accomplished, then this Apple Tv is bigger than most expect. If i am Blockbuster, Netflix, or even comcast, i am very scared right now.

Frankly if apple can pull off bringing a ton of content online, then this news will trump the iphone and then some. Disney sees it. News Corp will likely see it as well. Will the other networks bite? It would mark the end of TV ads as we know it. So im sure it will be a battle. But it seems more a question of when than if...

The unbundling of video content is happening before our eyes. It will undoubtedly have major implications.

2007 Jan 10 04:07 PM

[Ryan Lozado:]

I could not disagree more. First, people are terrible at predicting what they will want. Second, Apple doesn't care how we do things only their idea of how they should be done. When I first saw "iTV" last fall, I couldn't wait for it to come to market. I would love to dump my satellite/cable box, DVD player, VCR, DVR in my dumpster and manage all content with my PC/MAC. I am developing rules of media for my household. First is no new CDs in the house! Soon I'll add no new DVDs in the house.

2007 Jan 10 04:23 PM

[Tom B:]

"The analyst also talked about research that's found 92% of people prefer to watch movies and TV shows on their TV. Only 6% want to watch them on a PC. "High value content is best viewed on the device for which it was designed," Chanko said."

Classic bad interpretation of data. All this means is that PC's typically have crummy displays. I can tell you, a good display makes a difference. Bladerunner looks a lot better on my MacBook than my analog TV.

"I could not disagree more. First, people are terrible at predicting what they will want. Second, Apple doesn't care how we do things only their idea of how they should be done."

Exactly right.

2007 Jan 10 05:02 PM

[Julian Ivan...:]

"And besides, there’s not that much interest in TV shows and video on the Web, anyway. Chanko cited a survey by his firm in 2000 which found 12% of Internet users downloaded video programming. That number declined in 2004 and 2005 and stood at 11.6% last year."

Umm.. yeah I guess that's why Apple said they have had 50m movie downloads so far ... good lord do these FUD-spreading new-technology hating bears never give up trying to peddle their negativity?

2007 Jan 10 05:59 PM

[Josh Ferguson:]

"And besides, there’s not that much interest in TV shows and video on the Web, anyway."

You're kidding right? You'd have to be living under a rock to think that is even remotely true. Video is revolutionizing the web. Every major content creator offers some form of video broadcasting, podcasting, or videocasting. Youtube is the #6 visited site on the internet and you can already get desktop clients to manage your videos from many different sites (look at Democracy Player). Apple has been selling TV shows and movies hand over fist in their iTunes media store. Yahoo, Google, and Microsoft are all scrambling to get into the video arena for a reason. On-demand for-pay video over IP networks is going to crush bundled television services, the same way iTunes and other online music services have been running rampant selling music for the past few years.

"Giving people the option of watching "Lost" on their PCs after paying $1.99 to download it from the iTunes Music Store isn't much given that the free broadcast is so available on TV, cable, satellite and on-demand on the Net."

Someone gives you these services for free? Most people are shelling out $60-$70 a month for these services, a substantial amount when you could spend that on buying shows you cared about and have a netflix account for movies.

It's pretty easy to figure out why this product is important. This is to television and movies on iTunes what the iPod was to music on iTunes. It unchains you from your computer to live your life and multiplies the utility you can derive from your purchases on iTunes. No normal person wants to fight with format issues, networking issues, etc. to try and get their content to some PC with a TV-out card or whatever. They just want it to work, and I think that's what this will do.

2007 Jan 11 04:19 AM