By Steve Gillmor
There comes a moment, not the aha moment, but the I wonder whether someone else had this idea in 2004 moment. I can’t be sure, but here it is for what it’s worth. I think Apple TV is going to go real small, not the other rumored way around. As in to the cloud by way of the remote. If you think of the current Apple TV and its dimensions, think smaller, iPod Touch small.
As most of us who know how difficult it is to get everything into one box these days, the lure of a universal remote for content is a compelling idea. One device that can show not just the current Apple (NASDAQ:AAPL) TV fare (Netflix (NASDAQ:NFLX), YouTube, iTunes, AirPlay,) but Amazon (NASDAQ:AMZN) Prime, Xbox, DVDs, Comcast (NASDAQ:CMCSA), and with it Spotify and other as yet to debut streaming services. A kind of combo hardware and streaming router.
I don’t need another TV right now, and besides the cost of upgrading to the latest and greatest escalates the bigger the screen. But more and more the new streaming architecture of AirPlay is wreaking havoc in my household. It started with the Netflix restructuring, when a combination of studio pressure and supplier aspiration forced a cost shift away from DVDs and toward pay per stream. In our case it meant that watching anything at all while my youngest worked her way through 8 seasons of Grey’s Anatomy became impossible.
Of course I could just change the contract to drop the DVDs (requiring me to find the Jimi Hendrix documentary disk I lost a year ago) and add another simultaneous view. Then my other daughter would complain and we’re up to three streams. At this point Netflix starts to feel like real money, especially given there’s nothing really on. For now what I do is suggest one of them or we find something else on Comcast On Demand until the Netflix queue is free.
It’s then I realize that Apple TV already has a solution to part of this problem with its caching on rentals. Let’s say I download a show on my iPad and then throw it up to the big screen via AirPlay. A progress bar across the bottom of the screen indicates how long until the show is precached on the AppleTV box, at which point the iPad can go offline and save its battery. Why not do the same for an arbitrary signal on the streaming bus, and make it available or cached on other Apple TVs on the home network.
Once the movie you want to watch is cached, you can make the Netflix bus available for caching another show on a different set. Apple might not want to do this to avoid improving Netflix’ service at the expense of its own rentals, but with AirPlay already built out across the dominant tablet market the decision may be made to open its overall virtual TV model before others can catch up.
There I said it. Virtual TV. Shift the control of content from the providers to the point where the viewer has access to the signals. The streaming router could insulate the user from external services by presenting a single IP address to the outside world and then distribute the bots once they reach the master box. Think of this as a virtual universal remote, and map the buttons to the underlying services they indicate. You can picture on picture multiple sets in the house, use the iPod Touchish camera to call the household to dinner, play Words for Friends while watching sports events across the Net, and in general make it difficult for Netflix and Comcast to charge for multiple channels on their services. Of course, Comcast will raise the cost of broadband to get back some of the difference, and Netflix and the studios could make things more expensive for Apple in their negotiations.
The key to this idea is that like Slingbox the intervention of the technology is after the customer already has the hardware installed, in that case the DVR. Indeed, Comcast just signed a 10 year deal with Disney (NYSE:DIS) that allows ABC, ESPN, et al to work across all digital devices both inside and outside the home. Given Steve Jobs’ substantial Disney stock and Bob Iger’s presence on the Apple board, the Comcast deal may the signal of how this deal will play out across the industry.
An AirPlay streaming router could sit at each screen, acting as a hub for all HDMI cabling and pushing the various streams and controller metadata between the house’s Apple TVs. Comcast would still get its per box revenue, Netflix and Amazon its subscriber fees, and the user would get everything he paid for all on the same channel without having to shift between cable and stream services.
For now, this isn’t a cord cutting moment. But what it is is the moment Apple may be looking to make a move on the TV market. Establish the reality of a wifi-networked aggregation of existing services, stay out of the existing player revenue model, validate their existing relationships and partial control of one of the major broadcast networks, and provide a rolled up service that works the way we want it to. A Virtual TV that is then released in a box for the starter market.