Future chance, future challenge for the Apple TV

Apple’s “hobby” the Apple TV has a chance at becoming a ubiquitous household item, though the company may need to add support for non-Apple media services and implement many new features if it seriously intends making an iPod-level impact on this important growing market.

The reason Apple has the chance is visible in the growing momentum behind development of solutions to bring online video to the front room – a sector becoming quickly more intense.

Online video on-demand services such as iTunes or Hulu are hot properties, meaning many more devices – including TVs offering features similar to the Apple TV – should begin to reach market en masse starting next year. And even if Apple does not develop such solutions there will still be winners and losers in the race to offer the ‘iPod’ equivalent of the multimedia for the front room box.

That the industry is shifting to favour such a proposition is no idle claim: major Hollywood studios including Viacom, Paramount, MGM and Lionsgate have spent $34 million so far on a jointly-planned premium film channel so far.

In other related moves, UK broadcaster the BBC continues to invest in its internet-based iPlayer service; Universal continues to sink investment into its Hulu channel, and YouTube this week revealed future plans to offer full-length movies from MGM through its service.

Look in any direction and you’ll find examples of this industry shift, as movie studios accelerate development of legitimate alternatives to file-sharing. Netflix, TiVo, Microsoft – everybody’s throwing shapes and attempting to develop, extend and differentiate their solutions for this emerging market.

This market for such content seems set to bounce, with Economist publisher Paul Rossi recently predicting European demand for paid online content could generate €5 billion in 2013, up from €1.4 billion last year.

“While free content will continue to dominate, as overall online audiences for all content categories continue to grow, so the number of European users willing to pay for content online will grow at an even greater rate,” he predicted.

These online moves have sparked the attention of hardware manufacturers, who will introduce next-generation products designed to harness existing ubiquitous devices such as televisions to the available mix of online services.

While early moves in the sector must be designed to match usability models designed on the philosophy that these early-gen products must not be used as vehicles for file-sharing, the evolution of legitimate services in terms of breadth of content and usability will begin to erode perception that file-sharing is a worthwhile alternative.

Legal services will eventually match illegal alternates on breadth and availability of content, speed and reliability, user-friendliness and accessibility.

Even price should be a passing barrier to access, with services such as We7 or SpiralFrog developing business models based on the proposition of free ad-funded access to content.

Andy Frost, Director of Media at Detica, notes his company can already deploy, “proven, scaleable intelligence technology within an ISP’s network to enable them to deliver exciting new business models such as a ‘per track’ download fee or an ‘all in’ monthly subscription service. Ultimately, this approach could see the spectre of illegal downloading disappear altogether since users will be charged automatically — and fairly — for any files they download or share.”

With ISP level technologies such as Detica’s and the fast-paced evolution of legitimate services to become more convenient alternatives to file-sharing, most consumers will happily migrate to the legal alternatives.

This inevitable transition seems set to drive service usage and device adoption up fast. ABI Research expects the number of web browsers embedded in consumer electronics devices such as digital TVs, game consoles, and set top boxes to grow from 60 million shipped in 2008 to 214 million by 2013.

The analyst firm notes the rise of IP-enabled consumer electronics products to be fueling increasing demand for browsers and web-based user interfaces in these devices.

Most forward-thinking consumer electronics vendors today are integrating IP ports in their mainline consumer electronics devices,” says research director Michael Wolf. “The push to bring web surfing, over-the-top video content, social networking and other web 2.0 applications to consumer electronics is creating a need to integrate browsing engines and dynamic user interfaces as well as other platforms for content rendering.”

The integration of web browsers into digital TVs is already common in Japan and is becoming increasingly more common in North America, with vendors such as Sony integrating browsers as a way to help deliver web services. Further, Yahoo’s recent announcements about porting its widget platform to the living room indicate it will take advantage of the CE-2014 HTML standard, and many of the initial implementations of this standard will use a variation of Webkit, the same browser core used by Apple and Google.
“One of the main facets of multi-screen offerings will be web-based user interfaces and rich web content across all three screens,” says Wolf. “Beyond the PC and mobile environment is the Internet-connected TV screen, and in the  living room we see the browser core – either explicitly or as part of a rich Internet application runtime such as Adobe’s AIR – as one of the important elements in this vision of the future.”

Don’t believe the hype. Apple’s Apple TV has never really been a hobby, but wider support for such solutions was required before it became a wide proposition. Now, it seems, there may be a need to introduce support for a mix of mutlimedia standards and features such as internet access and downloading of content from film and TV company’s independent websites in order to take solutions like Apple’s into prime time.

4 thoughts on “Future chance, future challenge for the Apple TV

  1. Jonny Post author

    He’s neurotic. he’s a Nomad! He’s got some good points in his (doubly-posted) post ..Thanks for dropping by, Mr Nomad.

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