Review: A better Apple TV doesn't beat competition

[Rcourt64]

http://ichart.finance.yahoo.com/instrument/1.0/AAPL/chart;range=1d/image;size=239x110?lang=en-US&region=US http://l.yimg.com/a/p/fi/32/94/76.jpg


NEW YORK (AP) -- Apple is a pioneer in many fields, but in the race to connect our TV sets to the Internet, it's been lagging badly.
Three years ago, the company put out a small box called the Apple TV that brought iTunes movies to the TV set, but it was too cumbersome and expensive to be a success. Now, there's a new, revamped and cheaper Apple TV, costing $99. It mainly represents Apple Inc. catching up to what competitors have been doing in the intervening years. However, with Apple being Apple, it also has some nifty features that set it apart.
So what is the Apple TV? Every time I write about it, I feel compelled to point out that despite the name, it's not a TV set. It's a black box that comes with a small remote. You connect it to your TV set either directly or through a receiver. It shows a computer-like interface on the TV screen, which you navigate using the remote's buttons.
To connect the Apple TV to the Internet, you enter the password for your Wi-Fi hotspot, or connect the box to your router with an Ethernet cable. Once online, you can start renting TV shows and movies from Apple. You can also watch Internet movies from Netflix, if you have an account.
In setup and operation, the new Apple TV is simpler than the old, which was more like a small computer, with a hard drive of its own. It was designed to download shows from iTunes or your computer, then play them back. By contrast, the new one has no hard drive, which makes it smaller and cheaper, and it is designed to play video as it "streams" from the Internet rather than storing them. That means you don't have to worry about the hard drive filling up, either.
So far, so good. But my main problem with the Apple TV business model is still very much a problem. When you rent a movie -- usually for $4.99 if it's in high definition -- and hit the "Play" button, you have 24 hours to watch it. If you can't finish it in one evening, you're going to have to cough up another $4.99 to finish it. Watching a movie in one sitting is a distant memory from my pre-parenthood days, so this model simply doesn't work for me, and I'm sure I'm not alone.
There's nothing about the Apple TV itself that dictates a 24-hour movie lifespan. It's all Hollywood's fault. The only progress on this issue in the last three years is that we now have 48 hours to watch rented TV shows. So we have twice as long to watch shows that are a quarter of the length of full movies. Thank you, thank you, dear studios.
The Apple TV, does, however, offer a cheaper way to watch movies. If you pay at least $9 per month for a Netflix subscription, you can watch as much as you want of Netflix Inc.'s streaming movies through the Apple TV. The image quality isn't quite as good as the rentals, the movies aren't as fresh and there's no surround sound, but this is good value for money.
Streaming Netflix movies on the TV is old hat, though. Two years ago, a small company called Roku brought out a small box very reminiscent of today's Apple TV. It cost just $100 and did a good job. Since then, Netflix service has been extended to game consoles and DVD players. Some TV sets can even play Netflix movies by themselves, with no accessories of any kind.
I took a look at the Roku HD, an updated model of the original box. It costs $70 and plays Netflix just as well as the Apple TV, though it's a bit bigger and the interface is not as polished. For $100, you can get version that can connect to older TV sets that don't take digital inputs; Apple TV can't do that.
The Roku boxes don't play Apple or iTunes content, but can play rented and purchased movies and TV shows from Amazon.com Inc., under similar terms. It also offers baseball from MLB.tv and streams from less-known providers. In the next few months, it's also adding Hulu Plus, which provides ABC, Fox and NBC shows for $10 per month.
So why get an Apple TV instead? Well, it does play well with other Apple products. If you have a computer running iTunes at home, the Apple TV can reach into it to play movies and music from your hard drive, including purchases from the iTunes Store that you wouldn't be able to buy and store with just the Apple TV. Instead of the tiny and eminently losable remote, you can control the Apple TV from the touch screen of an iPhone, iPod touch or iPad.
Apple promises an even cooler feature in November, called AirPlay. A software update will let Apple's handheld gadgets stream photos, audio and video to the TV through the Apple TV, using Wi-Fi. That will be an easy way to get movies and photos you've shot yourself on to the big screen.
Like the Roku boxes, the Apple TV has the potential to save a lot of money for people who like watching movies and a few TV shows, but don't care much about news or sports and can put up with the 24-hour limit on rentals. If you're in that category, you can get rid of cable or satellite service in favor of a TV antenna and a Netflix subscription. Forget "100 channels and nothing on" -- you'll have 15 channels and something always on, online.
It's a fine stop-gap solution for the problem of bridging the distance between the TV and the Internet. In the longer term, standalone boxes like this will go away, and TVs will come with Internet connections as standard. It will be interesting to see if Apple has a place in that future.

source (http://finance.yahoo.com/news/Review-A-better-Apple-TV-apf-981041940.html?x=0)

[RawAlex]

One interesting thing is that each of these boxes, each of the products attempts to create sort of a "limited" view of the internet, sort of going back to the AOL walled garden approach. I was even looking at some of those internet enabled TVs, and it really seems that companies like Netflix are attempting to obtain a near monopoly on movie delivery.

I cannot picture people buying into a closed system like that.

Myself, I have a "media" PC (wussy little quadcore with a nice video card) that gives me great 1080P display, plays almost anything I throw at it, and gives me full net access. I could in theory add the netflix application, but I don't have to lock myself into it, or Itunes, or any other single provider.

I actually think that in the end, Netflix is likely to get knocked off by someone else who comes up with a better model, finds a way to do it all cheaper, and takes them out on price, convenience, download speed, or quality.

[DannyCox]

I think that the new Google TV is going to be changing all the rules. It's what things like Apple TV should have been out of the gate.

[Rcourt64]

One interesting thing is that each of these boxes, each of the products attempts to create sort of a "limited" view of the internet, sort of going back to the AOL walled garden approach. I was even looking at some of those internet enabled TVs, and it really seems that companies like Netflix are attempting to obtain a near monopoly on movie delivery.

I cannot picture people buying into a closed system like that.

Myself, I have a "media" PC (wussy little quadcore with a nice video card) that gives me great 1080P display, plays almost anything I throw at it, and gives me full net access. I could in theory add the netflix application, but I don't have to lock myself into it, or Itunes, or any other single provider.

I actually think that in the end, Netflix is likely to get knocked off by someone else who comes up with a better model, finds a way to do it all cheaper, and takes them out on price, convenience, download speed, or quality.


Isn't that the name of the game?
Lock consumers into your financial network of sales. No different from what the Internets been doing from the start.
It's the independent pirate networks that offer you the feeling of freedom while still using their products that might achieve financial success? ..no?

[RawAlex]

Isn't that the name of the game?
Lock consumers into your financial network of sales. No different from what the Internets been doing from the start.
It's the independent pirate networks that offer you the feeling of freedom while still using their products that might achieve financial success? ..no?

Nope. It's the idea that the box maker and the content sellers are not run by the same company. AppleTV means, by default, Itunes, and the whole Iuniverse that comes with it. They get to choose what ends up on the box. You can't easily add other suppliers.

If your TV is "netflix enabled" it means it is "everything else disabled", which is a poor choice for the consumer, and the consumer KNOWS IT. They aren't as likely to fall for it anymore.

So there is little reason to pay signficiantly more for an apple box that does signficantly less that other products out there. As Danny said, the GoogleTV thing might be a change.

[gonzo]

Nope. It's the idea that the box maker and the content sellers are not run by the same company. AppleTV means, by default, Itunes, and the whole Iuniverse that comes with it. They get to choose what ends up on the box. You can't easily add other suppliers.

If your TV is "netflix enabled" it means it is "everything else disabled", which is a poor choice for the consumer, and the consumer KNOWS IT. They aren't as likely to fall for it anymore.

So there is little reason to pay signficiantly more for an apple box that does signficantly less that other products out there. As Danny said, the GoogleTV thing might be a change.

I own an Apple TV. Rather have my Laptop with the HDMI port. Then I watch what I want.

[TheEnforcer]

Broadband will have to become much more reliable for people to make any type of mass conversion. It will be a very long time before this is anything but a very small niche market.

[RawAlex]

Broadband will have to become much more reliable for people to make any type of mass conversion. It will be a very long time before this is anything but a very small niche market.

Actually, I thought so too... and then one day I ran across something and my opinion changed entirely.

I have a lot of chinese friends, as many from the mainland as Hong Kong, and i have visited both often in the last 5 years or so. I enjoy the cultures, etc, and I have been trying to learn Mandarin. So I figured perhaps it would help to watch chinese tv or movies. Well, my sat provider (Bell) will grace me with chinese channels, but the prices are insane ($10 a channel per month in some cases), and the quality of the channels is very low. So I went looking online.

CCTV is the chinese state network, they run about 20 channels including news in english, french, russian, etc. There is a product which allows for their channels to be streamed live, at a good enough rate that I watch them on the big screen with very good quality (even the news scroll things on the bottom of the screen are clear and move smoothly).

Shortly after, I also moved to Bell's Fibe product, which gives me 25meg internet speeds. They tested me up to 50+meg on the line, for the new http://www.fibetv.bell.ca fibe tv product coming. Using the other 25 meg of bandwidth, they assure me they can feed 3 to 4 HD TVs with high end programming, replacing the sat dish entirely with the internet connection.

The you see the streaming to cell phone / smart phone deals out there, and it is really clear we are not far away from complete convergence. It may change how many people get their entertainment and programming. The real key will be how many people move away from the computer screen and back onto the sofa, looking for programming in this manner. That will change everything.

[TheEnforcer]

Actually, I thought so too... and then one day I ran across something and my opinion changed entirely.

I have a lot of chinese friends, as many from the mainland as Hong Kong, and i have visited both often in the last 5 years or so. I enjoy the cultures, etc, and I have been trying to learn Mandarin. So I figured perhaps it would help to watch chinese tv or movies. Well, my sat provider (Bell) will grace me with chinese channels, but the prices are insane ($10 a channel per month in some cases), and the quality of the channels is very low. So I went looking online.

CCTV is the chinese state network, they run about 20 channels including news in english, french, russian, etc. There is a product which allows for their channels to be streamed live, at a good enough rate that I watch them on the big screen with very good quality (even the news scroll things on the bottom of the screen are clear and move smoothly).

Shortly after, I also moved to Bell's Fibe product, which gives me 25meg internet speeds. They tested me up to 50+meg on the line, for the new http://www.fibetv.bell.ca fibe tv product coming. Using the other 25 meg of bandwidth, they assure me they can feed 3 to 4 HD TVs with high end programming, replacing the sat dish entirely with the internet connection.

The you see the streaming to cell phone / smart phone deals out there, and it is really clear we are not far away from complete convergence. It may change how many people get their entertainment and programming. The real key will be how many people move away from the computer screen and back onto the sofa, looking for programming in this manner. That will change everything.

I see what you are saying but people like you aren't the average consumer out there. And i don't mean in terms of the chinese aspect.

There was a series of articles on TVByTheNumbers.com that explained about cancellations and how people complain that they don't undertsand why some shows are canceled and how people tend to view how things will evolve through their own lens rather than what the reality of the average tv viewer is. Well. this is like that. People like us are high info viewers/users for tv/computer stuff. The VAST majority of people aren't though and it takes them a VERY, VERY long time to catch up.

[EmporerEJ]

Every show, every movie, any time you want it.....

That's all ya gotta do, and they'll beat a path to your door.

The tech is all but here.......Now we just gotta get the licensing ass clowns in line.

[RawAlex]

Every show, every movie, any time you want it.....

That's all ya gotta do, and they'll beat a path to your door.

The tech is all but here.......Now we just gotta get the licensing ass clowns in line.

The "licensing ass clowns" as you refer to them are the only reasons that there is a flow of income in the movie and tv businesses. Quite simply, without licensing and standardizes licensing terms, there wouldn't be much out there these days, because there wouldn't be the level of income.

Expressions like that tend to come from the piracy community, who point the fingers at people who actually have the balls to try to SELL their products rather than give them away. It is incredibly short sighted to think that the problem is licensing... it isn't. It is more to do with people being unwilling to pay for the products, be it actually buying them, renting them, or paying for them with their time (commercials, pre-roll ads, etc). With limited sources of income, the producers will make a limited product. Nobody seems to be thinking quite that far.

Generation Disrespect: They don't care about how it effects anyone else, they just want their binky now!

[EmporerEJ]

The "licensing ass clowns" as you refer to them are the only reasons that there is a flow of income in the movie and tv businesses. Quite simply, without licensing and standardizes licensing terms, there wouldn't be much out there these days, because there wouldn't be the level of income.

Expressions like that tend to come from the piracy community, who point the fingers at people who actually have the balls to try to SELL their products rather than give them away. It is incredibly short sighted to think that the problem is licensing... it isn't. It is more to do with people being unwilling to pay for the products, be it actually buying them, renting them, or paying for them with their time (commercials, pre-roll ads, etc). With limited sources of income, the producers will make a limited product. Nobody seems to be thinking quite that far.

Generation Disrespect: They don't care about how it effects anyone else, they just want their binky now!

I'm gonna assume you didn't just make a libelous accusation there.
I'm all broke up about those "ass-clowns" that are reaping untold millions on product that has been sitting on their shelves for years, and before ANY of the possibilities of these other revenue streams existed.
And, yea, by the way, they aren't sharing that revenue with the other people entitled to it...namely the artists.
No, they capitalized, profited, and wrote down that inventory years ago. Now they are getting greedy.

The deal was......we watch 4-8 minutes per hour of commercials to pay our "fee" for watching the content. The signal came to the house for free.
Now, we pay massive expense for the "cable," and watch up to 22 minutes of "commercial," for shitty content.
Apathy & Greed.

In our own industry, some most of those studios don't exist anymore. So, who's really "entitled" to the licensing revenues? The last guy in the room, or the guy that found the masters in the closet?
Yea, I'm crying for them.
Again, that material from the 80's and 90's was made, profited on, and sent to the $1 a tape sale bin. I know, I bought a WHOLE LOT of it. Now we have a new medium, (again, never imagined, or even written into most contracts, when there were contracts,) and someone jacks the prices to the fools that don't know any better?

Content has a value. And the people should be paid. And they should get maximum payout, and utilize all the income streams available to them.
But I'm getting tired of the "piracy is destroying the industry" cry, as a solution for mis-management, and bloated affiliate payout programs.

Paying out 60-125% affiliate commissions on sales is what destroyed the industry. The folks in the 80's seemed to be able to make money on just films and VHS, with an arcane, and difficult delivery system.
If you can't make money today, it's your own incompetence. Low up front costs, unlimited "talent," minuscule production costs, micro delivery expense, and you can't make money?
Please.

Piracy doesn't enter into it. It's just the bogeyman.

[Toby]

The folks in the 80's seemed to be able to make money on just films and VHS, with an arcane, and difficult delivery system.
If you can't make money today, it's your own incompetence. Low up front costs, unlimited "talent," minuscule production costs, micro delivery expense, and you can't make money?

Try it yourself, I think you'll likely change your tune in short order.

P.S. You might want to join the rest of us in the 21st century first.

[EmporerEJ]

Try it yourself, I think you'll likely change your tune in short order.

P.S. You might want to join the rest of us in the 21st century first.

The point being.....they made money with much less advantage than we have today. They were working on the edge of being busted at every shoot, having the mob rape them for the lion's share of the revenue, working through the theater distribution system, and making, and shipping physical product.

And you want me to cry for digital hard drive cameras, downloaded to digital editing bays, and distributed through an automated server/payment system?

How about YOU try it back when it was work?
I do, actually produce videos for the local cable network, and DVD distribution. My "commitment to the community."

So, while I don't work with adult talent, I do the rest of it.

[Toby]

So, while I don't work with adult talent, I do the rest of it.
But you're not comparing apples to apples, or even apples to oranges. You're equating sales and distribution of a physical product (VHS video) with digital media. Two markets as different as night and day, with significantly different limiting and non-limiting factors.

I spent 15 years in retail sales/management prior to doing this Interweb thing 12 years ago, so I think I have a pretty good grasp of the similarities and differences. There are some aspects that do translate from one to the other, but many others that simply do not. Pirating being a prime example. It was a minimal issue with VHS because the average consumer didn't have the means to make more than a few copies for friends. Entirely the opposite for digital media.

[RawAlex]

EJ, you miss the point, in a most dramatic way. Not to worry, it is a mistake made by plenty of the "free content forever" asshats out there, who can't seem to think past the ends of their noses when it comes to establishing both value and price for product.

Delivery methods do not define value, and they only have a medium level effect on price. People still want porn, they still consume porn like crazy, and porn continues to be one of the main uses of the internet. Social media and a few other things that surpassed porn now, but porn is still one of the things they internet does well. People still want it, it has value to them.

Price is a different subject. A common mistake made by internet asshats is to assume that the internet represents infinite distribution, with little or no marginal costs. While this is somewhat true (only because people don't consider cost of bandwidth servers to send something, nor do they consider the percentage of their internet bill as it relates to a given download). They then apply supply and demand calculations to say that the product has no market cost. A costly error for those involved.

Distribution is infinite only if something is pirated. Without piracy, there is still limited availability. The current infinite distribution is entirely based on piracy. Remove widespread piracy, and suddenly things change.

If you look only at the costs of the medium of delivery, you have already lost the battle, because you failed business 101.

Back in the day, an adult movie title might sell 10,000 units (good movie). Then over time, with more production, that number slipped to about 1000 units per movie, and nearly half of that number was sales to video stores for rentals. The video stores have been dying off, so now a good adult video would be lucky to sell a few hundred copies. The product costs are still pretty much the same, but the sales have dropped (of physical product).

Yet they have infinite distribution, right? Well, sadly, when your distribution costs become very low, your fixed costs per SOLD unit become the significant driver in the calculations. Infinite free distribution doesn't pay for the creation of the product, free distribution does nothing but distribute. They still have to find a way to actually sell enough product to be able to recoup the upfront fixed costs in making that video.

With such widespread piracy, there are few choices in the marketplace right now. Most of the content producers aren't looking for distribution deals or shelf space, they are looking for licensing deals, to resell their product a very few times (maybe even exclusive) and getting out of the way.

The buyers? Tube sites and similar who are using porn not to sell porn, but to sell other things. They aren't interested in porn as a product, only as a lure to get a chance to get someone to buy a dating membership, visit a cam site, similar. If they do sell porn, they are selling the cross sell hell, whacking customers for hundreds of dollars through mazes of pre-checked cross sales, promotional "free" memberships that have more cross sales tied to them, and in some cases, just purely jamming people's cards.

Basically, tube sites exist because piracy has taken the money out of porn.

The movie industry faces the same issues. Home theater systems are getting better all the time. Widespread piracy means that the latest movies are available online for free, often before they are available on PPV or DVD, usually when the movie is still in theaters. The movie business held it's own in ticket dollar sales the last few years only because of the 3D craze, as people didn't have that ability at home, and were willing to pay over the standard price for the experience. But now with 3D TVs, it won't be long before that advantage is gone, and the movie industry starts back down the path of free fall.

Remember, movie ticket income has remained virtually the same in the last 10 - 15 years, even as inflation and such in the general market has moved up significantly over the same period of time. 2009 saw twice as many theatrical releases as 2008, with only a 4% increase in income. Put together, you get an average income per movie down 50%. 2010 looks to be even more of the same.

I could go on. If you get lost looking at the distribution methods, and only those methods, you will never really understand the situation. Widespread piracy is hurting all content producing industries, and making the economics very tough. People still value the product, but because everyone is offering them a free copy of everything, they don't see the value in paying for it. Until that changes, the rest of the discussion is moot.

[2muchmark2]

It's all Hollywood's fault. The only progress on this issue in the last three years is that we now have 48 hours to watch rented TV shows. So we have twice as long to watch shows that are a quarter of the length of full movies. Thank you, thank you, dear studios.


Don't blame the studios, blame the pirates, torrents and tube sites.

I haven't yet bought the AppleTV but I think maybe they are marketing this gadget wrong. Personally I think its a great little gadget to connect to my second TV to watch YouTube on and perhaps content from my mac or itunes. I wouldn't use it for much else although it does have some other pretty cool features.

Right now my main TV is connected to a Satellite DVR box. I'm already "locked in" to the content they provide, but so what. If TV sucks I'll pay a few bucks to watch a flick. Its so easy and I never have to get my fat ass off my couch. I wouldn't see AppleTV as any kind of replacement. Only as an Internet add-on for my teevee. It's only a hundred bucks too... sweet.

[Toby]

Right now my main TV is connected to a Satellite DVR box. I'm already "locked in" to the content they provide, but so what. If TV sucks I'll pay a few bucks to watch a flick...

If the video card on your 'puter has an HDMI port you can connect it to most satellite receivers and watch anything you download on your HD TV. So you're not really "locked in".

[RawAlex]

Oh, I do want to add one thing here: Even in "sell direct" situations, there is always a middleman. Producers will not normally run their own website or run their own retail to push their products. They understand that you need a marketplace that people are attracted to, in order to get exposure, and that requires by definition middle men, or affiliates, or sales portals.

The online affiliate model is very effective, getting eyeballs to places they otherwise would never get.

[gonzo]

I just bought a ROKU box for my older TVs with no HDMI port.
Ill be getting a few for xmas presents for family.
Netflix has seen the future and it doesnt include DVDs but it does include Roku... or most every online delivery port.

[EmporerEJ]

I just bought a ROKU box for my older TVs with no HDMI port.
Ill be getting a few for xmas presents for family.
Netflix has seen the future and it doesnt include DVDs but it does include Roku... or most every online delivery port.

As do all the new TVs, all the gaming systems, and every other entertainment port.
Netflix is poised to jump in and take over. There is one kink. They may have a rub with Showtime entertainment. They have a contract re-negotiation coming up.

But even with a PS3 hooked up to my 50," my own personal movie vending machine: 24HRDVDs.com, I'm still getting me a Roku.
(With HDMI....I can't go for that tired old analog, 525 line or mostly less picture.)
I GOTS to have Hi Def!

[gonzo]

As do all the new TVs, all the gaming systems, and every other entertainment port.
Netflix is poised to jump in and take over. There is one kink. They may have a rub with Showtime entertainment. They have a contract re-negotiation coming up.

But even with a PS3 hooked up to my 50," my own personal movie vending machine: 24HRDVDs.com, I'm still getting me a Roku.
(With HDMI....I can't go for that tired old analog, 525 line or mostly less picture.)
I GOTS to have Hi Def!

They all have HDMI out. But unlike the rest of them they have component as well. Netflix in the bedroom!

[EmporerEJ]

They all have HDMI out. But unlike the rest of them they have component as well. Netflix in the bedroom!

Yea, I'm liking the direction access to media is taking....but it's Waaaaayyyyyy behind schedule.

Hell, I'll be dead 'till we have full immersion Tv rooms.