Will Smaller Apple TV Spell Big Trouble for VoD?

Apple TV is out of hobby mode and putting the cable video-on-demand (VoD) world on notice.

That's cable and telco VoD as well as over-the-top video boxes. The smaller version of Apple TV, announced by Apple Inc. (Nasdaq: AAPL) today, will retail for $99 and will stream video from outside sources such as Netflix Inc. (Nasdaq: NFLX) and YouTube.

Apple CEO Steve Jobs unveiled the new broadband-fueled device in San Francisco, confirming rumors that the box would sport a refreshed user interface and the ability to rent (but not purchase) iTunes shows and movies. (See Apple's Big Day.)

Rentals of newer HD movies will run $4.99, while TV shows (from only ABC and Fox properties at this point) will go for 99 cents. Apple's adaptive streaming platform will let users start watching titles "within seconds" after ordering them, Jobs said. Users will have 30 days to start watching rentals, and can view them as many times as desired during the next 48 hours.

Users will soon be able to stream purchased titles from other Apple devices, including the iPod Touch and iPad, and access content from PCs and Macs hanging off the home network. That multi-device sharing will be available in November with AirPlay, a capability being bundled with the 4.2 version of iOS. As an example, consumers will be able to use AirPlay to start a movie on the iPad and finish it on the Apple TV device.

Smaller & Cheaper

The device itself sports a high-definition multimedia interface (HDMI) port and built-in WiFi and Ethernet. Apple says it's about 80 percent smaller than the previous generation Apple TV.

Jobs, who used to call Apple TV a "hobby," acknowledged that the original product, launched in 2006, never caught on broadly because it wasn't easy to set up and was too pricey for consumers who might've been looking to experiment with the new platform.

The new $99 price shaves $130 from the old Apple TV retail price. Jobs said the new Apple TV product will start shipping "within four weeks."

Apple has iTunes content available in six countries -- US, Canada, UK, France, Germany, and Australia -- and Jobs expects to add to that list later this year.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Pete Baldwin 12/5/2012 | 4:24:56 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?

Not that I really relish quoting Henry Blodgett, but I like his take on Twitter, namely: The difference Apple TV and Google TV is that Google TV is "nuts and won't work."

His longer analysis is here.

His point, and Apple's, is that people don't want their TV to become a computer.  I'd agree with that.

Jeff Baumgartner 12/5/2012 | 4:24:56 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?

Didn't squeeze these in earlier, but here's some other info about the product and supported services:

- 99 cent shows from BBC America. Not just from some ABC and Fox properties.  Rental-only model keeps built in storage out of the equation and also helps keep the Apple TV retail price down below $100.

- Apple TV to start off with over 7K movies for rent, 3,400 in HD.

- Access to more than 200K podcasts, 4K internet radio stations

- MobileMe and Flickr integration

- Sorta mentioned this already, but in addition to content sharing, iPhones, iPads, and iPod Touch devices can control Apple TV with the Apple Remote app. 




paolo.franzoi 12/5/2012 | 4:24:55 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?


Not sure about the $0.99 rentals still.  If you have cable, you basically get the equivalent VoD built in for free.  Unless you are disconnecting cable or don't DVR things, I guess I am confused.

If you are saying that it is yet another Netflix box, I get that.




Jeff Baumgartner 12/5/2012 | 4:24:54 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?

I'd agree that it certainly represents another Netflix box, plus access to the iTunes rental library, so this gives consumers another VoD option that isn't cable, and may siphon away some VoD-related revenues from carriers.

Not that I'm the perfect example, but I tend to use Netflix streaming more often than VoD not because the video quality is better (it isn't), but because the interface is so much better, makes it less of a chore to find what i'm looking for than what i get from the cable IPG. Still, will be interested to see if Apple TV fares better this time... doubt we'll see round the block lines for it, but I expect just the more attractive price will make it more successful that its predecessor.. JB

Cooper10 12/5/2012 | 4:24:47 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?

This is admittedly putting on rose colored glasses from the perspective of traditional pay TV, but a "mainstream" a la carte product from the likes of Apple may be exactly what is needed to force acknowledgement that an a la carte model would result in overall higher pricing vs. traditional subscription pay TV.

Following 10 shows/week w/ AppleTV would run at least $40/month, more if they are daily vs. weekly shows.  That covers 5-10 hrs of viewing per week.  The avg American watches 31.5 hrs of TV per week (per Nielsen).  You do the math.

Jeff Baumgartner 12/5/2012 | 4:24:44 PM
re: Will Smaller Apple TV Spell Big Trouble for VoD?

Yep, downloading TV shows would get pricey pretty quickly. Smart that they are combining rentals with subscription products  from Netflix, though... they can at least combine availability windows for new and library content. But to your point i would like to see a monthly content bill for an Apple TV user  and see how it matches up with the average digital cable subscription. JB

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