“This has been quite a year for Apple, but Steve Jobs’ magic wand doesn’t always work,” Tom Krazit writes for CNET. “In March, Apple unveiled Apple TV, the company’s attempt at tackling a question that has eluded the PC industry for years: how can we get people to watch content delivered over the Internet in their living rooms on their big-screen TVs?”
“Apple has been a pretty good judge of consumer taste of late, but few companies get a hit every time they step up to the plate. ‘That category of devices is so nonexistent,’ said Ross Rubin, an analyst with The NPD Group, which tracks almost every imaginable retail segment. ‘It hasn’t really evolved to the point where we’ve been tracking it as a category.’ As a result, it’s difficult to get a sense of how many Apple TVs have been sold,” Krazit writes.
“Apple doesn’t report shipment totals for Apple TV like it does for Macs, iPods, and iPhones. Revenue from Apple TV is lumped in with a number of other segments on Apple’s financial statements, and it’s also recognized on a subscription basis over a period of two years. But it’s clear that Apple TV is quite a bit lower on the company’s priority list behind the Mac, iPod, and iPhone divisions: Jobs even called it a ‘hobby’ during the D: All Things Digital conference,” Krazit writes.
“There are a lot of popular shows and movies on the iTunes Store, but there are also lots of other sources of video on the Internet. Apple TV doesn’t come with a browser, and high-definition shows aren’t offered at the iTunes Store,” Krazit writes. “There are signs, however, that the long-awaited promise of Internet-delivered movies and television shows is starting to come together as the networks experiment with delivering their shows through their own Web sites. If that takes off, a crippled Apple TV is going to prevent owners from watching a wealth of free content that’s becoming available on the Internet.”
“Until this new model shakes out, cable and satellite companies remain in firm control of the living room,” Krazit writes. “But that doesn’t necessarily mean Apple TV can’t be a success in its current form; it’s not going to replace a set-top box anytime soon, but could it replace a DVD player?”
“The issue here, though, is that the rental/subscription model for movies and TV shows is very much entrenched in the consumer’s mind,” Krazit writes.
Full article here.
As we repeatedly say: Business models that fly in the face of human nature are doomed to failure. It’s not so much, as Kratzit writes, that the rental/subscription model for movies and TV shows is “entrenched” in consumers’ minds as if it were simply a habit needing to be broken. The rental/subscription model for movies and TV shows makes sense. It works best with how human beings interact with such media. People listen to certain songs over and over again; not so with TV shows or movies – such repeat viewings are very rare. We want to buy and own or music and rent our TV shows/movies because we consume each type of media differently.
Apple TV (and iTunes Store, for that matter) – at least when it comes to TV shows and movies – currently fly in the face of human nature. We watch TV shows and movies once; it make more sense for most people to pay a monthly fee and watch what they want. No matter how cheap storage becomes, we don’t want to store episodes of “The Amazing Race” forever. It’s disposable, one-time-only viewing.
Let us subscribe/rent with the option to buy the comparatively few titles we actually want to own via iTunes Store directly from Apple TV, add Safari with wireless keyboard support via software update (so we can go to the network sites to watch shows with ads, if we want), convince the content providers to let you upgrade the video quality, advertise the thing properly, and Apple TV will go from a “hobby” to a real business in no time.
There’s nothing wrong with the Apple TV hardware that a few updates can’t fix.
(Apple TV is already great for sharing photos, home movies, and music with friends and family. It amazed all visitors during the Thanksgiving holiday.)