Apple TV – Tech.pinions

Apple’s Curious TV Plans

In Walter Issacson’s biography of Steve Jobs, he related a conversation with Jobs in which Steve says they [Apple] nailed what a true interactive TV experience should be in the way of UI, content and hardware. (My paraphrase) Although he did not announce any new products, he basically laid the groundwork for a lot of speculation about what he meant and what Apple might do with their future Apple TV plans.

Most speculation has been on the idea that Apple is going to do an actual television and could have it in the market sometime in the next two years. Others see the current Apple TV becoming a greater vehicle for content and UI innovation and that this is what Jobs meant.

Over the last two weeks, Apple has made a very important and, to us long time Apple watchers, curious move when they added Hulu to the Apple TV line up and then the following week, allowed Amazon’s Live TV and Movie streaming app to go on to the iPad. I say that this a curious move because these products compete directly with Apple’s own iTunes TV and movie store and at least in theory, would impact their services revenue coming from similar iTunes products.

While Apple could still make an actual TV, I think this move with Hulu and Amazon essentially signals a strategic move by Apple and is probably at the heart of their future TV plans. The key here is that for Apple’s current TV device to make money, it needs content. By biting the bullet and offering competing services to iTunes, the value proposition of an Apple TV device just went up. And it now lays the groundwork for Apple to accelerate their TV plans through an area they excel in. That area is software and human interfaces and I believe that they can do all that they want to do in this area through an external box that connects to a TV and delivers Apple’s iTunes and cloud services. The problem with TV’s is that people buy them and hold on to them for 5 to 7 years on average. And while Apple could design a TV that could be upgraded in software, it makes more sense to create a more sophisticated box that works with all televisions and allows them to innovate around this model.

More importantly, as technology advances, they could redesign the box every year or two and given its low cost, people could just upgrade to get these new features. That is what they do now with the iPod, iPhone and iPad and it makes sense to carry that business model to the Apple TV too. While Apple is clearly a hardware and software company, it is pretty clear to me that the software exists to help them sell hardware and ultimately deliver a whole eco system of products and services that allow them to make money through all of these offerings.

I am not sure how much margin they have in the Apple TV, but knowing Apple’s way of thinking about margins, I believe that they make enough profit to keep their “hobby” going. This buys them time to innovate around the software UI and services that make these boxes very valuable to Apple customers and draw new users into Apple’s overall eco system of products and services.

Also, Hulu debuted on the iPad and migrated over to Apple TV and it is only a matter of time before Amazon’s streaming service shows up on Apple TV as well. Apple knows content is king and that it helps them sell hardware.

As I stated earlier, Apple could create an Apple TV, but I really doubt that this is in the cards and I would be highly surprised if they did a stand-alone television. Instead I believe Jobs’ and team saw the long term evolution of what the external Apple TV could become and that it this box, tied to advanced UI’s and innovative services and content that is at the center of Apple’s vision of revolutionizing the interactive TV experience.

Apple TV and the Trojan Horse Strategy

Apple TV is one of the things I get asked quite a bit about during my industry analysis presentations. It seems that everyone out there wants to know what Apple has planned for the big screen. Although no one knows, and there is much speculation, my key thoughts about this all along have been that Apple will in some way turn the TV screen into a platform to deliver rich content and services. If you think about it, the TV screen is the last of major screens in consumers lives to truly become a smart. Many vendors have tried, but the technology in many ways is still not here to really make TV’s smart.

I believe there is a tremendous amount of interest in Apple’s moves in this area because of the massive opportunity to re-invent what we experience through our TV. But the opportunity is much larger than simply consuming video content in new ways.

A Platform Unlike Any Other

The untapped opportunity for the large piece of dumb glass sitting in hundreds of millions of consumers living rooms and bedrooms is to create the ultimate entertainment platform. This is a big deal if you think about it. Today most platforms are computing platforms where things like entertainment are secondary to things like productivity, communication, etc. This is what has always intrigued me about game consoles. I have felt from very early on in my digital home research that game consoles were the ultimate entertainment platforms which would evolve into trojan horse entertainment gateways for more than just video gaming. With many of the updates brought to both the Playstation and the XBOX, it is clear that this is exactly what is happening. In fact, I believe that the value of game consoles for today’s and perhaps even future consumers, will be less about gaming and more about other entertainment services.

That being said, gaming is an important part of living room entertainment. That is why I believe Apple is betting seriously on gaming across all of the screens in which they compete. Game Center for Apple becomes the glue tying consumer gaming experiences together and the foundation of a gaming service akin to XBOX Live. A holistic video game strategy both immersive and casual is key to the future of Apple TV as an entertainment platform.

A Set Top Box is a Trojan Horse not a Large Piece of Glass

I will believe that Apple is making a large piece of glass when I see it. In my opinion the current strategy with Apple TV is that it is a small, yet powerful, set top box and is their best plan of action. Mainly because there is absolutely nothing that can be built into a large piece of glass that can not also be accomplished with a small, yet powerful, set top box. If Apple wants to sell hundreds of millions of Apple TV’s it will accomplish this with a set top box not a large, and expensive, piece of glass. Even if Apple does decide to sell a large piece of glass in the shape of a TV, they would still have to employ the Apple TV set top box strategy in order to provide an identical experience to the hundreds of millions of consumers who already have large pieces of glass and don’t intend on buying a new one any time soon.

Interestingly, Microsoft is in a position to compete when it comes to entertainment platforms. The XBOX 360 is much more than a gaming console and is evolving into a fairly mature entertainment gateway. The XBOX 360 has been called a trojan horse before and I believe it is but Microsoft can not sit still.

We may analyze and probe from every angle Apple TV in its current implementation and yet I don’t believe Apple or Microsoft has yet implemented the key growth features for this category–namely apps. The next frontier of the TV platform is to let developers begin to invent new applications and software designed specifically for the large screen. This does not mean a repurposing of existing apps and blowing them up to fit on a larger screen. It means re-inventing the way we think about software and entertainment experiences for the big screen Similarly, touch computing required a new software development paradigm built from the ground up to work with touch; so I believe the TV needs software purposely built for that screen and its role in consumers lives.

What makes the TV fascinating is how different of a relationship consumers have with it versus other screens, or platforms, in their lives. For example, the TV is not a personal screen like a notebook, tablet, or smartphone. The TV is a communal screen where in a family environment it is enjoyed by multiple people simultaneously. In this scenario it doesn’t make a ton of sense for me to run Twitter or Facebook, or at the very least those aren’t the most interesting applications for the TV. What gets me excited is that when the TV becomes a platform for software developers to take advantage of, I believe we will see an entirely new set of applications developed with more communal experiences in mind.

The family or communal cloud will become an important ingredient in this scenario. I wrote about the need for more family and communal clouds last week and the more I think about it the more I am convinced it is an unmet need in the market. Communal screens will require communal content and that is when the family’s digital media becomes an important part of the experience. The experience of seeing up to date photos of loved ones and family members (of my choosing) on my TV is one I feel would be of great value.

Lastly, I would add that although I believe Apple TV is a trojan horse, I am not convinced Apple has yet employed the strategy fully. I think this is where gaming and apps will come in to round out the platform. I know we want to kick our cable providers to the curb but I don’t think that is the entry point. I believe games and apps will deliver the value propositions that get the Apple TV trojan horse strategy going. Then once in the door in masses, hopefully the Hollywood industry will begin to invest in business models that will keep them from extinction in the future.

Why Siri Won’t Go Beyond the iPhone–For Now

Since Apple launched the Siri app on the iPhone 4S last fall, there has been a widespread assumption that Siri’s voice-driven semantic search might soon find its way to other Apple products. At the top of everyone’s list was the still notional Apple television, bolstered by the belief that Steve Jobs’s deathbed claim to have “cracked” TV was based on the development of a voice interface.

Don’t get too excited. I think Siri will continue to improve on the iPhone and might well migrate to the iPad, but its not likely to go anywhere beyond these handheld devices for some time to come. Both the technology and the psychology have to be right, and both are far from ready.

Siri on the iPhone is a big step forward, but it is very far from perfect. Mostly it understands me, sometimes it doesn’t. sometimes it has a useful answer to a question, sometimes it doesn’t. It’s a lot better than any previous voice/natural language effort, but I still rely on the keyboard or other touch interface elements most of the time. Actually, the iPhone makes a natural Siri development platform for Apple because even iPhone users are inured to mobile phones that fall well short of perfection. For example, calls drop, voice quality is often awful, messages arrive hours after they were sent. So we’re prepared to put up with a personal assistant who doesn’t always understand us. Apple, with its sharp focus on user experience, will be reluctant to push Siri into territory where customers may be disappointed by the performance.

Our expectations for television and cars, the logical targets for voice control, are much higher than for mobile phones. At the same time making voice control work is much harder for engineering reasons. Cars are actually the easier challenge. Apple has avoided the automotive market, but others are in the game and Microsoft is the clear leader, especially with its partnership with Ford.

Natural language understanding is a big computer science challenge for voice systems, but there are also a considerable audio engineering issues to solve. Speech recognition requires a high quality audio signal, and the more free-form the speech, the better the audio has to be. An airline reservation system can understand me over a poor cellphone connection (most of the time) largely because the vocabulary and syntax of airline reservations is very constrained. But a Siri-like system is supposed to understand anything.

Siri on the iPhone works as well as it does because the phone starts with a decent microphone system that is close to the speaker and filters out extraneous noise. Cars are a pretty good environment as well. Voice systems usually are activated by pressing a button on the steering wheel that can also mute the audio system. There are lots of good places to put microphone arrays close to the driver. And while the sounds of driving create a lot of ambient noise, it is of the predictable sort that noise-cancellation systems handle well. I expect to see car systems get a lot better, but I don’t see Apple becoming a player. Apple likes to be top dog, and that would not be the case in a relationship with auto makers, who are quite insistent that car buyers are their customers, not those of third-party vendors. (Microsoft may do the software and Nuance the speech recognition, but Sync is a Ford product through and through.)

The living room is far tougher, but here to Microsoft may well have the edge, this time because of Kinect sensor technology. Pure voice control of a television is extremely difficult. Unlike a car, you don’t know where the speaker is going to be, so you need a sophisticated speaker microphone array that can find and focus on the speaker, who might be 10 feet away. Such systems exist, but they are mostly still in the lab and, at least initially, are likely to be quite expensive.

You also need the equivalent of a push-to-talk button, or the voice recognition system is going to be saddled with the near impossible task of hearing anything over the sound of its own audio. Here’s where Kinect might come in very handy. It’s ability to recognize gestures and to combine gestures with speech might yield a much better interface, much faster than voice alone. This plus an enormous research investment in speech and natural language understanding, which admittedly have yet to yiled much in the way of products, might give Microsoft a considerable edge in the battle of the living room.

Of course, the big TV challenge for Apple, Microsoft, or anyone else is striking the deals needs with content owners that will permit a viewing experience that unifies internet video with cable and broadcast TV. Difficult as the technical issues are, this business challenge may prove tougher to crack.

The New iPad: Setting the Stage for Innovation

This morning Apple introduced a new iPad and with it has raised the bar for anyone creating a competitive tablet. The iPad, with its new Retina display that delivers 2048 X 1536 resolution, is clearly the highest definition tablet on the market. More importantly, as Apple pointed out, the work to create this type of HD quality experience on a tablet took many years of effort and tight integration with their new chip, which will make it very hard for competitors to match anytime soon.

Apple has punched up the power of the new iPad with a custom version of their ARM processor called the A5x, which is a quadcore chip designed specifically to boost any image or video displayed on their new Retina screen. One only has to view the new iPad against an older iPad 1 or 2 to see the major differences between the products. And it is even more pronounced when you view it next to an Amazon Kindle Fire or any of the other tablets on the market with standard definition displays.

With the new iPad display, there is no pixilation whatsoever on pictures and video and text in books is sharper then ones in any real book outside of those designed with high res text and images. And saturation of images and video are 44% greater then on the older model iPads.

Apple also adds a new 5-megapixel camera that takes video in HD, has a much larger sensor then in past iPads and has a 5-element lens with backside illumination and an IR filter that gives amazing color and white balance. And a new dictation feature is now added to the keyboard making it easy to dictate words into a document quite accurately and easily.

As expected, the new iPad also has an LTE option. It includes radios that cover EVDO (Verizon) HSPA GSM, HSPA+, DC-HSPA and LTE, which make’s it a world capable communications tool out of the box. And it will have the same battery life as iPads in the past. 10 hours for continuous use without LTE radio and 9 hours with.

Prices are the same as on the older models, although Apple will now offer a 16-gig version of the iPad 2 for $399, a new price point for iPads and one that will make it available to a broader audience. And the design is about the same so it will work with most cases and peripherals without any changes.

They are also introducing new apps from iPhoto to an updated iLife and an updated version of iMovie that allows for much finer creation tools to new ways to edit and distribute your movies via iCloud. And while all apps work with the new Retina display well, software developers can enhance their apps for even greater resolution to make them optimized for this new display. Software is clearly the key differentiator. The iPhoto demonstration alone will wow consumers and highlights the power of touch computing.

All of this new technology integrated into the new iPad will have a major impact on the market for tablets. From now on, this iPad will be the standard all other tablets will be compared to. And with it should come an even greater opportunity for Apple to pad their lead in tablets.

Of course, we expect that other tablet vendors will try and match Apple with higher resolution displays later this year. But if what Apple says is correct, their integration of both this custom display optimized for this new processor could make it hard for the competition to directly catch up anytime soon.

I view Apple’s new iPad as a major advancement in tablet design and one that will have a major impact on the market for tablets. In business, the need for higher resolution tablets has always been strong, especially in vertical markets like medical, engineering, and even ones where handling a lot of data for viewing is important. At the very least, the new iPad should have even greater interest in the enterprise where Apple is already making major inroads. And consumers who watch movies and view their pictures on tablets will really be drawn to this HD experience, as the quality of their content will be the best on a new iPad.

Although there will always be a market for lower cost tablets, with the new iPad Apple has introduced a new measurement to the decision process for users at any level. And this will cause some challenges for buyers this holiday season as I doubt that any competitor can even come close to having something competitive by then.

That should give Apple a significant edge going into this holiday, as the iPad will clearly be the best tablet available bar none.

One more thing:

Apple also introduced a new version of Apple TV. While many had hoped that Apple would introduce an actual TV, that was not in the cards. What Apple did release is a new version of Apple TV with a new UI and more importantly, support for 1080P HD content. This is a big advance and one that current Apple TV users have been asking for. The price stays the same at $99 and the new software includes the Genius function and a completely new UI making it much easier to find content and display it. This should also be a hot product going into the holidays as more and more people are opting for products like Apple TV and the Roku box to handle their on demand TV experiences and movie viewing and the new Apple TV should be a big hit for Apple.

Why the TV Industry is Vulnerable To Apple

In 1992, while I was overseeing the largest multimedia computing show in NYC for a large publishing group, I was asked to meet with Sr. Executives of one of the major TV networks. In my opening comments at this show, I had mentioned that I thought that one of the major benefits of things like delivering expanded media content on a CD Disc would be to eventually launch an era of content on demand. And one of the examples I gave was that I could see someday when people would be able to call up a TV show on demand and view it at will.

Now, remember that this was before the Internet and few were even thinking about new forms of media distribution. In fact, everything we were discussing at the show was very PC centric. But one of my jobs is to look at technology and visualize its impact over a period of time and try and figure out how it could eventually impact consumers.

It turned out that since this event was in NYC, a lot of TV executives attended this show and consequently I was invited to meet with some execs at one of the major networks to explain my thinking about content on demand. As I spoke to these executives, it became clear to me that while they were interested in the future, they did not want to embrace anything that would disrupt their current business model. The idea of giving customers more of what they wanted through an “on-demand” format was taboo and if it did not increase the quarterly bottom line, they wanted no part of it.

However, to their credit, they saw that what I shared was worth thinking about and they soon created an executive position that was called something like VP of Digital Content. It was so long ago I can’t remember that exact title of the job description but this person was chartered to find out about the digital world and recommend how this company could or should deal with its potential impact on their business. So for the next three months I got quite an introduction to the TV business and its business models and more importantly, how risk averse they were and how much they feared change.

Looking back over the last 20 years, and thinking about that assignment in 1992 and how different the world of TV is today, I am actually amazed at how much progress the television industry has made. But to get where they are today in which each of the networks use the Internet to deliver some of their top shows, they had to understand that the Internet is just a medium for delivering their content. And that consumer’s will continue to want these shows on demand, anytime and anywhere they happen to be.

But to be clear, while they are starting to embrace the Internet as a vehicle for distribution, they are doing so reluctantly. If they had their way, they would keep total control of this distribution for themselves and drive their viewers only to their dedicated sites for viewing their shows. But the Internet has forced them to open up a bit and little by little they are doling out their top shows to dedicated partners who they trust to help them keep some semblance of control so that they can maximize their earning potential and if possible try to keep their customers within their network family as much as they can.

However, in this world of digital content, they are now realizing that while they ruled the roost in the world of broadcast television, they are just another channel among thousands of channels that consumers can choose from for viewing video content. But what they don’t seem to get is that in this world of digital, they will need new distribution partners and that they will not have as much control over them as in the past. And I also don’t think they really understand the idea that people want to have access to that content anytime, anywhere and on any device they own.

Enter Apple

Now enter Apple, who if the rumors are to believed, has been calling on the executives of all the networks and trying to cut deals with them for Apple’s new TV initiatives. And I am hearing that they are resisting Apple’s partnership offers as Apple wants to pay them next to nothing to carry this content and they fear that Apple will do to them what they did to the music industry in which Apple pays a minimal fee to the artists compared to what the artist might have gotten with their labels in the past.

Now, I don’t know what type of deal Apple is offering the networks, if any at all. But I do know one thing. Apple could become one of the most powerful video network distribution companies in the future and to not embrace what Apple is doing could be very painful for them. The reason is simple economics. While we don’t know exactly what Apple is doing in this area of video distribution yet, we have their history to look at for some clues. For example, when they initially introduced the iPod and the iTunes store, they opened the door for music artists to have millions of potential customers. But over a ten year period, Apple made it possible for that music to be played on iPods, iPhones, and iPads and to date, have sold over 350 million iOS devices in which music artists can sell to just through Apples own music distribution vehicle. Add a base of 40 million Mac users and in total there are over 140 million Apple devices tied to the iTunes distribution medium.

Now enter Apple TV. While many people think of this idea of being a physical TV, they miss the real point of what I believe Apple is doing. At the core, I believe they are moving towards becoming a powerful distribution network for video. And while I do think they will have a cool TV someday in their product mix, the reality is that every iOS device and every Mac will become an “Apple TV.” That means that for these networks, and any other of their video channel partners, Apple will deliver to them well over 140 million potential customers immediately once their TV distribution network gets turned on. And given Apple’s history you can expect that the Apple TV experience, whatever form it takes, will be elegant, easy to use and perhaps even revolutionary in the way people use their services across devices.

The mistake the networks could make is to not see Apple as this massive vehicle for distributing their content and instead see them as having to be their partner for making money and relying on Apple for high margin revenue. That is the business model of the past. The new business model that I believe will emerge is to find ways to get eyeballs to view the content and then get creative in the way they make money on that property. Of course, they could tie some advertising to it, but they could also offer games tied to the content, sell merchandise tied to the content, and give special prizes tied to the content, etc. Instead of resisting Apple, or perhaps Google or Amazon who I believe will create similar video distribution networks, they need to embrace them as vehicles to get their content in front of these eyeballs and find creative ways to keep their customers coming back and mining new ways to get revenue from their digital customers.

Apple is going to become one of the most powerful video distribution networks by nature of their existing customer base and one that is added to continually. They have sold 50 million iPads so far and will sell at least another 50 million this year, turning every one of them into an “Apple TV.” I know the networks would like to keep control of their distribution, but in the world of digital, those days are gone. The sooner the networks understand this and see things like Apple’s new distribution vehicle as a critical way to get their content to the masses quickly, the sooner they can adapt to and fine tune a new business models to take advantage of this new era of on demand, anytime, anywhere and on any device video content world.

How Sony can beat Samsung and LG on Smart TV Interfaces

As I wrote last week, Samsung and LG are following Microsoft’s lead in future interfaces for the living room. Both Samsung and LG showed off future voice control and in Samsung’s case, far-field air gestures. Given what Samsung and LG showed at CES, I believe that Sony could actually beat both of them for ease of interaction and satisfaction.

HCI Matters
I have been researching in one way or another, HCI for over 20 years as an OEM, technologist, and now analyst. I’ve conducted in context, in home testing and have sat behind the glass watching consumers struggle, and in many cases breeze though intuitive tasks. Human Computer Interface (HCI) is just the fancy trade name for how humans interact with other electronic devices. Don’t be confused by the word “computer” as it also used for TVs, set top boxes and even remote controls.

Microsoft recently started using the term “natural user interface” and many in the industry have been using this term a lot lately. Whether it’s HCI or NUI doesn’t matter. What does matter is its fundamental game-changing impact on markets, brands and products. Look no farther than the iPhone with direct touch model and Microsoft Kinect with far-field air gestures and voice control. I have been very critical of Siri’s quality but am confident Apple will wring out those issues over time.

At CES 2012 last week, Samsung, Sony, and LG showed three different approaches to advanced TV user interfaces, or HCI.

Samsung
Samsung took the riskiest approach, integrating a camera and microphone array into each Smart TV. Samsung Smart Interaction can do far field air gestures and voice control. The CES demo I saw did not go well at all; speech had to be repeated multiple times and it performed incorrect functions. The air gestures performed even more poorly in that it was slow and misfired often. The demoer keep repeating that this feature was optional and consumers could fall back to a standard remote. While I expect Smart Interaction to improve before shipment, there’s only so much that can be done.

LG
LG used their Magic Motion Remote to use voice commands and search and to be a virtual mouse pointer. The mouse

pointer for icons went well, but the mouse for keyboard functions didn’t do well at all. Imaging clicking, button by button, “r-e-v-e-n-g-e”. Yes, that hard. Voice command search worked better than Samsung, but not as good as Siri, which has issues. It was smart to place the mic on the remote now as it is closer to the user and the the system knows who to listen to.

Sony
Sony, ironically, took the safe route, pairing smart TVs with a remote that reminded me of the Boxee Box remote which has a full keypad one side. Sony implemented a QWERTY keyboard on one side and trackpad on the other side which could be used with a thumb, similar to a smartphone. This approach was reliable in a demo and consumers will use this well after they stop using the Samsung and LG approaches. The Sony remote has microphone, too which I believe will be enabled for smart TV once it improves in reliability. Today the microphone works with a Blu-ray player with a limited command dictionary, a positive for speech control. This is similar to Microsoft Kinect where you “say what you see”.

I believe that Sony will win the 2012 smart TV interface battle due to simplicity. Consumers will be much happier with this more straight forward and reliable approach. I expect Sony to add voice control and far field gestures once the technology works the way it would. Sony hopes that consumers will thank them too as they have thanked Apple for shipping fully completed products. Samsung and LG’s latest interaction models as demonstrated at CES are not ready to be unleashed to the consumers as they are clearly alpha or beta stage. I want to stress that winning the interface battle doesn’t mean winning the war. Apple, your move.

Apple Will Re-Invent Television

There is re-invigorated conversation around Apple and its Apple TV efforts in light of Steve Jobs’s comments to Walter Isaacson that he has finally cracked the TV interface. And now again with recent Wall St Analysts voicing their conviction that 2012 will be the year of Apple TV. We all know Apple wants a play in the television arena. Apple TV is still a hobby to them but at some point in time Apple TV will become a business and a healthy one at that.

Much of what is happening around the web, and with other pundits, feels very similar to the time prior to Apple launching the first iPhone and fundamentally re-inventing the smartphone. In fact my father provided the media with a quote about the first iPhone that circulated widely. Rather than call Apple’s first iPhone a smartphone he called it a “brilliant phone.” I found that quote fitting.

In the year leading up to the first launch there were mockups, hype, rumors, speculation, skepticism, optimism, and then one day it was unveiled and none of the hype could do it justice. It helped us re-imagine what a pocket computer should be and I would argue Apple continues to do so with each new iPhone.

Predicting exactly what the disruptor is proves more difficult than knowing which areas of the industry are ripe for disruption. Television is ripe for disruption and I believe Apple will be the one to do it. So rather than predict how, I would rather point out where some of the opportunities may lie.

So with all that in mind when the time is ready Apple will unveil to us their next greatest product creation and none of the current buzz will do it justice. For the simple reason that I expect nothing less from Apple.

The TV is an incredibly important “screen” in the lives of many consumers and it will become a key battleground for many companies. The TV experience has not changed much, with the exception of the DVR, since color. The TV screen itself is dying to become smarter, run software, become more personal–and even more–the television experience itself is stale and dated and in desperate need of disruption. Tim brings this out in his column stating that TV is one of the industries Apple will disrupt at some point in time.

What Apple TV Will Not Be and What it May Be
As I have read much of what is being hyped and speculated about with Apple TV, I have to point out what Apple TV will not be. It will not be just a simple streaming service that delivers content a different way than through the cable or satellite providers. It may include elements of that but it will not be focused around that. As we know the cable TV networks and service providers have an incredible amount of power, out-dated business models, and licensing agreements still in place from the 50’s. They are also completely inept when it comes to technology. We have pointed out the massive challenge working with these content companies has become.

Re-inventing the TV experience has to be more than just TV programming. Re-inventing the TV will require turning the TV into a platform to deliver rich content, new software, interactive programming and more. The opportunity is to turn the TV into a “platform” similarly the way PCs, smartphones, and tablets are platforms.

This will require new hardware, new software and a host of other things. I still remain skeptical that Apple actually wants to build and ship a piece of glass as an integrated TV set, as the only solution. If buying a new TV is required for the new Apple TV I think it would be a mistake. Consumers hold on to TVs for a 5yr average now and such a strategy would lock out a number of potential customers due to the lack of desire to buy a new TV. I find the set-top-box strategy to be a more relevant strategy and one that can keep up with the pace of innovation. As much as I am skeptical of the need for Apple to ship and build a fully Apple TV integrated TV set, the notion that current display hardware is not sufficient to realize Apple’s vision for TV is the strongest case.

That being said I fundamentally believe innovation within TV set hardware is still needed. I will give you one example.

In many R&D labs of TV manufacturers, new aspect ratios are being experimented with. One aspect ratio in particular I find interesting is 20×9. You may think to yourself why would I need a 20×9 aspect ration when the current standard is 16×9. There is an interesting answer.

20×9 brings the opportunity to use the outer edges of the display for “other” things than the video. Say for example that I wanted my Twitter feed, or sports scores, or interactive features to co-exist with what I am watching but I don’t want to see my picture in anything less than 16×9. Using the 20×9 aspect ratio would allow the viewer to still watch an unaltered video experience but use the outer areas of the display for other relevant content. Things like apps, news streams, and anything else we can come up with to complement the TV viewing experience. Of course these side bars can be turned off as needed but also usable as needed.

That is one simple way new hardware can be created that change how we experience TV today and re-shape it in an entirely new way.

John Gruber brings out some interesting thoughts and he outlines how apps are the new channels and using voice to fetch relevant data. Jean-Louise Gasse in his Monday Note builds upon Gruber’s thoughts and adds how an ever-increasing amount of people are using things like iPads to simultaneously watch TV and use their “other” smart screens like tablets and smartphones to add to their TV experience.

What makes the TV screen interesting is that it is not a personal device or screen. At least not in the same way that our smartphones and PCs and tablets are personal. The TV is more of a shared or social screen. Therefore our relationship with it is very different. Because of that it presents and interesting challenge where using our personal devices to enhance the shared TV screen experience may be very interesting.

Perhaps the future version of Apple TV will be all of these things. New innovations in the TV set using new aspect ratio’s or screen technology, combined with using other smart devices to enable a much more holistic, personal, and interactive experience.

The most important first step will be to turn the TV screen into a platform. When this happens we will see innovation come from software developers, service providers and yes the content industry. Opening the door for software developers to create compelling new experiences on the big screen, is perhaps the biggest and most disruptive opportunity.

I am hesitant to speculate knowing that whatever we come up with won’t even be close, at least I hope, to what Apple shows us–someday. Who knows when it will happen it could still be years away but I can’t wait until it is ready. In time Apple will not just show us a smart TV they will show us a brilliant TV and in the process re-invent TV.

How Close Are We to Steve Jobs’s Apple TV Dream?

The latest edition of Jean-Louis Gassée’s always stimulating Monday Note takes a highly informative look at what Steve Jobs may have meant in this comment to biographer Walt Isaacson that he had “cracked” the TV user interface. A key, Gassée speculates, is the idea (which he credits to Daring Fireball’s John Gruber) of channels-as-apps.

I remain skeptical, probably more so than Gassée, about Apple’s intentions of getting into the TV display business. But I have no doubt about their ability to–eventually–revolutionize the TV business by building the ultimate TV content controller, whether it is integrated into a TV or in a separate box connected by a single cable. And it’s the business, not the technology, that’s the problem.

The key, as usual these days, is the iPad. First, an observation. To the extent that people want interactive content while watching TV, whether it’s stats during a sports event or cast information in a movie, I am not at all sure they want it on their TV display. Directors, whether of movies or football games, do an excellent job of putting the images you want to see on the screen (and stations already mess it up with ugly irrelevancies like promos for other shows.) There isn’t any spare real estate.

But an iPad–it could be another tablet but Apple is way ahead in this game–makes a wonderful auxiliary display both for extra content and for navigation. The trick is integrating it properly with the TV or set top box, so you can get that cast info without having to go to a separate IMDB app.

A lot of this might be possible with the equipment, even the miserable set top boxes supplied by cable companies, we have today. My iPad already can control my TV, my experience with Verizon’s FiOS remote app being happier than Gassée’s with Comcast. What it mostly needs is a completely redesigned user interface that does better than mimicking the existing on-screen displays.

Even better. my iPad “knows” what I am watching, even without help from Verizon. Yahoo!’s Into Now app does an amazing job of identifying what content your TV is tuned to. All we need is the software glue to connect the pieces.

If the cable companies and their allies in the content business were smart–a large if–they would be racing to enable this new world by disrupting their own business before someone else, like, say, Apple or perhaps Google, does. It requires will, not rocket science.

What It Will Take for Apple to Crack TV

Steve Jobs posthumously set off a new round of speculation about that perennial object of desire, the Apple television, by telling biographer Walter Isaacson: “I’d like to create an integrated television set that is completely easy to use. It would be seamlessly synced with all of your devices and with iCloud. No longer would users have to fiddle with complex remotes for DVD players and cable channels. It will have the simplest user interface you could imagine. I finally cracked it.”

There’s no question that TVs and their rapidly multiplying set top boxes need a vastly simplified user interface and good reason to believe that Apple might be the company to deliver it. The problem is that if the UI were really the problem, it probably would have been solved by now. The real, and much, much harder problem is cracking the business models that control how TV content is delivered.

The failure, at least so far, of Google TV illustrates the challenge. Google set out to solve the two problems that have plagued efforts to fix television. First, you must find a way to bring together the horribly fragmented offerings of TV and movie content on the web. There’s a lot of content out there, from Hulu to Netflix to Amazon.com to iTunes to networks’ own sites. But no one site or service offers all the content a viewer might want, so a good user experience requires pulling many sources together. Second, live TV is still important for many things, especially sports, and is likely to continue to be so for a long time to come. So you need a way to integrate a live, and for practical purposes, that means a cable, feed.

Google tried to solve the first problem with the best tool it has, using search to discover web video and to try to bring it together into a common interface. Building great UIs isn’t Google’s strength, but its real problem was that content owners sabotaged the effort from the beginning. The content owners, from Hollywood studios to networks to sports leagues, live in an immensely profitable symbiosis with cable distributors. The owners and distributors have become reconciled to the idea of seeing the content on computers, tablets, and handsets, but will do everything in their power to keep it off TVs other than through their own fragmented, paid services, such as Hulu+. So they blocked Google TV’s access to these services.

The problem of integrating a live cable feed is even uglier. Google tried to solve the problem by the ugly kludge of have the Google TV box control the cable set top box, which most of the time has to be done by emulating an infrared remote control. A slightly better, but much more complex and expensive solution is to turn a third-party box into a cable STB by using CableCARDs and Tru2way software. There is every indication that the cable operators will drag their feet on allowing third parties to integrate live feeds for as long as possible.

Jobs’s cryptic remark to Isaacson gives us no clue about whether he solved these problems, but it seems unlikely. No matter how brilliant Apple is, these issues cannot be resolved unilaterally; the content owners have to be aboard. And Hollywood is, if anything, more suspicious and afraid of Apple than it is of Google.

Boosters of the Apple television idea argue that Apple went up against both the music industry and the wireless carriers and revolutionized their businesses. In the case of music, Apple went after an industry whose business model was being destroyed by massive file sharing and which, in the end, had little to lose by trying things Apple’s way.

The iPhone-carrier story is more complex. It is easy to forget that Apple initially tried to revolutionize the business by selling the original iPhone without a carrier subsidy and had to back down in the face of carrier resistance. It’s true that Apple has beaten the carriers on issues such as handset branding, but it has not changed their fundamental business model and no longer seems much interested in trying to.

The studio-sports league-cable complex promises to be a more formidable opponent than either music companies or carriers. For now, at least they have the high cards. Maybe some day Apple (or Microsoft, or Google) will look like a more attractive partner to content owners than the cable companies are. But that day seems several years away at the earliest. And until it does, TV will be a very hard nut for Apple or anyone else to crack.

How My iPad is Taking Over My TV

I have been enjoying the new AirPlay iPad and iPhone mirroring a little too much. Every since updating to iOS 5 on Apple TV, iPad, and iPhone, I have been using the AirPlay mirroring function every chance I get. In case you are unfamiliar with this new feature, AirPlay now lets you mirror any iOS 5 device through Apple TV to your big screen. This brings not just streaming video, photos, music from certain apps but from every app.

I have been using this new feature to browse the web, play games, check twitter, watch Hulu and YouTube, make music with Garageband, Face Time and more all on my 55″ TV. I am not sure how terribly practical all of this is in the long run but I am exploring the possibilities.

One use case that has been interesting in particular, is using the iPad and mirroring it to my Apple TV, then using my Bluetooth connected keyboard to use my big screen as an external large display for my iPad. In this use case I have responded to e-mail, wrote a column, and done general text entry using the iPad now on a large screen.

Again, this I’m sure is not something many are doing, or will want to do, I am simply exploring the possibilities.

In this experiment, I again have been debating in my head whether or not Apple needs to or should build an actual TV set. It seems to me that Apple TV as a set-top-box along with operating system mirroring could go along way in satisfying the needs of a TV solution.

This has also made for a great technical demo. Countless times now, when people were over, I have shown this demo and quickly brought up photos or video I just took on iPhone or iPad and brought them to the TV. Even just for fun I have showed off new apps using the TV rather than just showing people on my phone. Again, not terribly practical but fun.

As much as I have been having fun with this experiment it needs to improve in several ways.

First of all, I’d like to see my iPad or iPhone mirroring go full screen on the TV. There are obvious technical challenges involved with this but they are ones which can be solved. As you can see from this image I have my Hulu+ app on my TV using AirPlay mirroring but there are black bars on the side.

When using the iPad this was less of a big deal as the screen is larger but with the iPhone using mirroring is almost pointless because it is so small.

Another change that needs to be made is when the iPad goes to sleep, Apple TV mirroring goes off. In many cases where I was typing with an external keyboard for example, I was not actively using the iPad screen. I’d like to still use iOS mirroring in many cases even if the iPad or iPhone goes to sleep.

I’d really like to see perhaps a split screen, with iOS and my live or broadcast TV done better. It would be interesting to be able to watch TV, whether recorded or live, and have something like the Twitter app or Facebook app up on the screen simultaneously. I know certain TV’s from Samsung and a few others can run apps but doing this without the need for a new TV using what I have (Apple TV and an iPad) is a better value proposition.

Lastly, I would like the same iOS mirroring on Apple TV with OSX. I’d like to be able to do something similar to what Intel offers with Wi-Di, where you can mirror your notebook to the TV.

Key Takeaways

After seeing iOS on my TV, I am absolutely convinced it belongs on my TV. Using apps on the big screen has been a fascinating experience. I literally can not wait for the day when iOS developers can write apps specifically for the TV.

Another interesting take-away has been notifications. As I have been doing app mirroring and using the Hulu app for example, I have found it valuable to see a quick alert from either a news source, email, twitter etc. My wife finds it annoying but just the experience of seeing notifications of things I care to be notified of, on my TV while being entertained, was interesting.

This experience has shown me a vision of what I believe a more encompassing Apple TV experience could provide. Apple is clearly only scratching the surface with iOS mirroring on Apple TV and I am excited about the possibilities.

Just to show it, here is Face Time and the Writer App on my TV.

Why Content is the Biggest Roadblock for Apple TV

It appears as though the “Apple is making a TV” discussion is coming back around. Probably because of rumor reports that “sources in the know” are talking about a brand new product category.

Apple has a hobby business in a product called Apple TV. At some point in time this hobby will become a business, the question is when. The other question is will it be in the form of a full blown television? Will it simply be a set top box? Or perhaps will the iMac become a 40′ or larger monitor /TV?

These are all interesting questions and I can see good arguments for and against all of them. However the real issue as I see it is the content industry.

Problem #1 Hollywood
What many people don’t know is that Hollywood is nearly impossible to deal with. Unlike the record labels whose business is more distrubution, the movie studios and TV networks prefer controlled distrubution. Both the TV studios and the movie studios carefully control when, where and how their content is distrubuted.

They have exceptionally strong legal rights to their content and because of that they are in the driver seat. Take for example Starz, HBO and Showtime.

If you have ever wondered why there is no digital “subscription” service for first release titles of movies it is because Starz, HBO and Showtime own the rights to first run movies as a subscription service. This is why as a part of their subscription services comapnies like Netflix, Apple, Amazon etc can not offer a digital download or streaming subscription service which includes new releases on DVD.

This is why the only options to date to get a first release on DVD digitally is to buy it or rent it.

For any company to offer a subscription service to download or stream new release movies they would have to get HBO, Starz and Showtime on board, not to mention the studios, who I think have more lawyers than employees.

This is why in 2006 Starz tried to launch Vongo.com their attempt at a movie subscription service. The challenge with Vongo was that it didn’t have movies newer than 6-8 months depending on the studio.

The primary reason for this is because the studios want people to go buy DVD’s not subscribe to a service for the cost of a DVD that allows them to stream it as many times as they want. Because of that only the premium pay-per-view model is available for a movie in digital form until it has been on DVD for at least 6-8 months. So all though Starz, HBO and Showtime on the rights to a subscription movie service they studios don’t give them those movies until 6-8 month’s after it has come out on DVD.

Historically Blockbuster and now Netflix and Redbox get away with offering a subscription service for physical DVD’s because of copyright laws. Legally anyone can pay full price for a DVD and sell or rent that DVD at whatever price they can fetch. Unfortunaly digital copyright laws work differently.

Hollywood tighlty controls their first tier window of physical and digital DVD distribution and I don’t see that changing anytime soon. The fact of the matter is the purchasing of DVD’s is what they want people to do and they will protect that business to all ends.

To make a long story short, it would take a miracle for us to see a subscription service to stream new release DVD’s.

Problem #2 Comcast, Dish, DirecTV and others
What about a service to subscribe to network TV shows? We do this already since we pay a fee do Comcast, Dish, Time Warner, DirecTV or someone else. So it would seem logical to assume someone can offer something similar through the Internet.

The only problem is those above service providers pay hundred’s of millions of dollars for the rights to offer that content as a subscription service. The reason we get 100’s of channels for a fee each month is because hundreds of millions of dollars were spent to reserve the right to distrubute that content.

Put yourselves in the shoes of ABC, NBC, CBS etc. They get massive amounts of money up front for their programming. Do you think they are going to jeapordize that by letting people stream or access their content for free or cheap?

Although some networks today allow next day viewing for free with mandatory ads I am betting that at some point in time that model changes as well. What’s more is that even though supporting free streaming by ads is a business model, it comes no where close to hundreds of millions of dollars up front.

Hulu is in fact already experimenting with only allowing people to watch a show online the next morning if a fee is paid then anyone can watch it after seven days with ads.

I would expect in the near future if you want to stream a show for free online you will need to wait at least a week after it has first run. This will instantly kill any chance at the water cooler affect of a show and most likely discourage online streaming all together.

If you add up all the business model issues facing any company who hopes to offer or disrupt the current TV ecosystem it amounts to a monumental challenge.

The bottom line is the biggest hurdle for Apple to make Apple TV a business is not a technical one, it is a legal one.

I completely agree that the televion will someday become the next big platform to deliver rich content and services to and that it NEEDS to be disrupted in a major way.

But to quote a friend of mine who is a Hollywood lawyer:

“Two things drive Hollywood – fear and greed.”

I’m not optimistic that either of those forces will work in the technology industries favor.

Tag: Apple TV