Apple TV already won the battle for your living room

Whenever I write a piece like this, I generally get an equal amount of support and an equal amount of grief. This will likely be no different. I believe this is the year we'll see a major paradigm shift from the traditional time/space-shift technologies of cable/DVR to the web 2.0 method of media delivery. All the pieces are there, and Apple, is really the first to pull many of them together in a true customer friendly package. Right price point...easy to use...and millions and millions of iTunes users who already use the platform.

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Some time back I wrote that I believed Apple was poised to tear down what we've known as cable/live television and reinvigorate the industry. I made the audacious claim that Apple could possibly destroy Tivo and the idea of time/place-shifted television, because who needs to have a DVR when your shows are simply delivered to your television, commercial free?

I also claimed that Cable as we knew it was dead, it just didn't know it yet. Cable is cost prohibitive, and gives you more junk than value. Tivo gives you great DVR functionality, with a lifetime leash of at least $200 a year. Combine Cable and Tivo and you are spending more money for the stuff you actually want than buying a Apple TV, some season passes, and cutting your cable altogether.

Back then I postulated that if Apple were able to offer more options from iTunes, like free "sponsored" shows, sports, streaming, etc., we'd likely see an end to what we've traditionally become accustomed to when it came to cable. I've predicted that Apple TV would be an enormous hit...and I think early buzz is proving that to be the case. There are a lot of mixed reviews about the Apple TV solution...a lot of the complaints are about the hardware limitations when it comes to HD...but I don't think that's that big of a deal right now.

The key to this whole battle isn't coming up with the best online video client (as many are attempting), the key is getting the video to your television. Who wants to watch TV on their laptop? And as for the other video streaming boxes on the market today, most have terrible UI's, are hard to setup and configure, are abysmally ugly, and have failed to capture any of the publics imagination or attention.

Here's why Apple has already won this battle.

1. First to market box that combines ease of use, small footprint, great software, and is cross platform...all-in-one. Yes you do need iTunes for Mac or Windows, but it is free.
2. Most affordable time/space-shifting device available. Tivo may be $99 for entry level, but once you add the monthly fee, you have an additional $200 a year leash...forever. As for the MS Media Center, don't even get me started.
3. Turns out (as many of us expected) that this puppy is hackable six ways from Sunday. Already some clever people have Joost working on it, DIVX is running, and I've seen several instances of people running full versions of OS X and a number of other applications. It is only a matter of time before this box can play every media format under the sun, from just about any source. And then when you think about it...for $300...things just got a lot more interesting.
4. For all you Tivo defenders who got all ticked off at my suggestion that the Apple TV could kill that platform...and pointed out how much better a DVR was...well the Apple TV has a USB 2.0 port...how long before we see an EyeTV port of their DVR/terrestrial digital video products?
5. Sports! MLB is doing some interesting content for iTunes, but imagine when you can subscribe to your favorite teams and have all the games streaming or delivered right to your television, iPod, or iPhone.
6. With all the current hacks on the Apple TV, what happens when the legit plug-ins start to come out for Netflix, Blockbuster, the BBC, etc? Netflix wants to be in the music download business, but it isn't enough to provide downloads, you need to get them to the TV. I would not be surprised at all if companies like Netflix offered an Apple TV option in the future. While it might cut slightly into Apple's own TV and Movie offerings, it further cements Apple's solution as a platform, and the more people adopt the platform, the more Apple TV's are sold. Let's face it, the money isn't made off the music or movies...it is made off the hardware. Yeah, I know the Netflix founder recently joined the board of MS, but companies generally hedge their bets, and I'm sure if they aren't interested in working with Apple, Blockbuster will.
7. User generated content. I think by next year we'll have a whole slew of video podcasts available that rival some big studio content we've grown accustomed to over the years. One of my favorite shows, It's Always Sunny in Philadelphia, reportedly shot their pilot for less than $200. With today's technology, people can walk out of an electronics store with everything they need to create professional looking media for under $10k. And at that point, all you need is a bunch of talented people with passion to create and produce the next Seinfeld...without any backing from any studio...selling their show directly. iTunes or Apple TV can help get that material to televisions without any help from the cable company. I suspect I'll be subscribing to 4-5 independent video productions through iTunes within the next year.   

I think the thing many people missed when considering the Apple TV as a serious device and platform, is that the Apple TV is proving to be a lot more flexible than people originally thought. We'll no doubt see quite a bit of interesting talk come out of Apple's Developer conference this June in regards to legit app creation and expansion of the core functionality...I wouldn't be surprise if we see an official SDK for writing Apple TV plug-ins.

I also think what people aren't taking into account is that this is the first generation of this device, and I would be willing to bet that we'll see a series of Apple TV boxes ranging in price and functionality, supporting all sorts of storage sizes, HD options, and maybe...just maybe, some type of hybrid technology that converges televisions with the Apple TV components already inside, with a built-in touch screen. I'd kill to have something like that on my kitchen counter.

While it is still very early, this isn't the first time that people have questioned Apple's wisdom when it comes to product development. Not all Apple products have seen unparalleled success, but in my lifetime I've seen a lot of people bet against them, only to regret it later. Many of the analysts you read every day have been predicting their demise for a long time now, and much to their chagrin, they've failed to get a single prediction right. I think the Apple TV is one of those instances, and I believe it is going to be a huge success as a device, and as a platform.

BTW, here's a good piece on the Top 10 Myths about the Apple TV.