October 29, 2007

Eight Reasons the Apple TV is Failing, and How It Can be Saved

I enthusiastically bought the Apple TV early this year, and was among the first to receive it when Apple started fulfilling orders. But what could have been the best conduit between the Internet and my Television has turned out to instead be a reminder of what even good technology companies can do when they don't make a product line a priority. Should Apple continue to neglect the Apple TV, it just might disappear altogether, and I'd be stuck using mine as an expensive conduit for playing iTunes, as I do now.

(See also: Jeremy Toeman: Why isn’t AppleTV an actual TV?)

Why the Apple TV is Failing

1. No Compelling Exclusive Content

Sometimes a killer application, game or content can drive a product from one of the crowd to a must-have. Witness how the X-Box, largely ignored in light of the Nintendo Wii's success, spiked in demand with the launch of Halo 3. The Apple TV, and its content provider, iTunes, don't offer any compelling television or film content that can't be found elsewhere. Bringing YouTube to the big screen isn't exactly innovative either.

2. No Flexibility In Displaying Content

Locking customers into iTunes and the iTunes Music store sold tens of millions of iPods. But the fact that I can't take downloaded .avi files, DiVx files, RealPlayer, Windows Media or anything else from my computer to the Apple TV, with the exception of QuickTime videos or iTunes downloads reduces my options to use it. Just like Apple once embraced the "Rip. Mix. Burn." slogan to attract downloaders, there's a mountain of people using BitTorrent and other services to get movies free. The Apple TV could become a must have box for those guys if they had an outlet. A simple tagline of "Don't Steal Movies" would give Apple enough cover, as the line "Don't Steal Music" once did.

3. TV is Free, Stupid

Let's see. I can either watch a show live for free with commercials, I could record it to my TiVo for free and skip commercials, or I could pay $1.99 to get commercial-free 22 minute episodes of my shows. I think I'll take the TiVo method. The iTunes package worked great for music because consumers were accustomed to paying for music, but we're not accustomed to paying for TV.

4. Purchasing Movies Makes Little Sense

How often do you watch movies more than once, even the classics? Not too often. There are many outlets to rent movies and return them, from NetFlix to BlockBuster and beyond. Why would I pay anywhere from $10 to $15 to wipe out a gigabyte of hard drive space and not enjoy it more than once? I haven't purchased a single movie from iTunes still, and can't think of why I would. (Also: See above for BitTorrent allowing for free downloads today or my post from April)

5. Apple Is Distracted

Apple only mentioned the Apple TV once during the last quarter's financial earnings call. They don't care, so why should we care? They don't even want to tell you how many they sold, and it's no secret that if a company won't break out one product line, but does for all the others, they're hiding something. With the iPhone, Leopard and Mac sales taking the headlines, the Apple TV is getting the short shrift. The recent ugly spat between NBC and Apple made it clear that nobody is winning the revenue game there when it comes to film and TV downloads through iTunes.

6. Apple Isn't Supporting Eager Developers

The Apple TV is a cleverly disguised cheap Macintosh, and the developer community was once excited enough to hack into the box to run native applications and get the Apple TV to act more like a Mac. With the right support, the Apple TV could be extended to be an excellent game machine, to add more video sources, and grab the eye of the geek community.

7. iTunes is Losing the Video Streaming War

One of today's biggest pieces of news was Hulu, NBC's attempt to take TV shows online, supported by commercials. ABC has long done the same thing. Joost has some extremely compelling software that lets me select shows on demand, run streaming from other computers, with minimal advertising. To even watch a single episode from iTunes, I have to download the whole thing and then sync it to the Apple TV.

8. iTunes and the Apple TV Have No Answer for Rentals

In my mind, it would be incredibly easy for Apple to offer movie rentals, with DRM, that would get me to download movies from iTunes. I would dump my NetFlix account if I could get films from iTunes to the Apple TV in an hour, rather than the days it takes to turn my NetFlix account around. But while there have been rumors about the service's debut now and again, we've got absolutely nothing to show for it.

How the Apple TV Can Be Saved

1. A Solution for Movie Rentals is Needed Now

Suck it up, Steve. Admit that people don't want to own their movies the way they own their music. Precedent has been set that movies are to be watched once or a few times, not many times (See my note from January). And as fast as networks are getting and as big as hard drives are getting, the concept of downloading movies of any quality is still a big deal. Let me download, watch, and delete. That's all I want. You work out the business model.

2. Cut Exclusive Deals With Movie Studios

Can you imagine if movies debuted in the theater at the same time as they did on iTunes? If I could see those films playing in the box office on my home screen instead of having to go to a theater, with its crowds, sticky floors and crying babies, I would do it. But if I have to wait 6-9 months to get it on iTunes, by that point I've either seen it already or stopped caring.

3. Make the Box Something New: A Game Device?

If it's really a Mac under that hood, Steve, then it's a lot more powerful than you're letting it be. See how the Nintendo Wii has captured the imagination of so many? What if you could make your one box the answer not only for music and videos and YouTube, but for video games? I don't care if you get Halo 3 on there tomorrow, as quite honestly I'd be content with Cribbage or Scrabble on the big screen, so long as you promised Tetris and sports games would eventually show up.

4. Open the Box Up to Developers and Support Them

Developers are not the enemy. In fact, they can be the best allies you have, doing the work your team isn't doing, and expanding your customer base, without much cost to you. You supply them the hardware and the network connections, and let them do the rest. Hold seminars on how to program for the Apple TV.

5. Act Like You Care About Apple TV

Don't call this box I purchased a hobby. I took it seriously, can't you? While I understand the iPhone is pretty cool, as is the iPod, and Leopard and Mac... don't you think this box, with so much potential, should get a little love? Don't tell me you shipped it to just give up on it.

6. Watch What the Industry Is Doing and Learn

Every few months or so, I read an article about how TiVo is dying. Really? Their box still kicks your ass. What about SlingBox? Couldn't figure out how to get me a way to watch my Apple TV when I was on the road, but some punk startup turned that idea into an acquisition worth hundreds of millions? What about Joost or Comcast OnDemand? How can you take this tremendous Apple TV and iTunes package and come up with an answer for real-time on demand? So far, you've got nothing.

Steve, and the Apple team, we're among your biggest supporters. That's obvious. I'm not the type of user who would complain if you dropped the price or added new features after I bought. I bought version 1 and I know the issues there. But for you to ship away and slip away makes no sense here. If you ever think iTunes will make it in the video world, you're holding on to the very best way to make that happen, the Apple TV. But if you don't do anything about it, it will be too late, and you will have failed.

Now please excuse me so I can go watch some Netflix DVD we rented. When I get back home, I also look forward to catching up on my TiVo shows. Will you have anything new for me?


  1. As someone considering an Apple TV - if they ever "refresh it" - thanks for pointing out the downsides. I share your thought that most of the movies / video we watch are rentals - we don't want to own the content and therefore either a streaming or rental solution for Apple TV would be super welcome.

  2. I completely agree and expect Apple to do something about this real soon. This weakness in the video store is already causing fissures in the music store now, Apple needs to make a move (my vote is for movie rentals AND HD content for the same price as the current regular resolution content) or iTunes could be in some trouble in the long run.

  3. Good article.

    I'd say add divx support out of the box, and work together with Elgato to produce (Eyetv) tuners that plug into the AppleTV. This way you can choose to buy the tuner suitable to your local signal and Apple don't need to worry about compatibility.

  4. Welcome all readers from MacSurfer.com.

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    The good news is I know Apple is listening.

  5. I agree. Apple needs to devote a little more time to this device. I do love mine, especially for photo viewing and music streaming to the rest of the house. But there are obvious avenues that should be immediately exploited that aren't. Here's two of them:
    - streamed keynotes. C'mon. I watched the D conference video on my Apple TV but I can't watch Apple's own keynotes?

    - iTunes wifi music store. I've got wifi. I've got a hard drive. What am I missing here?

    These two seem like total no-brainers and could be implemented easily. Sometimes I don't get Apple.

  6. I run an Apple TV-related site called http://appletvsource.com. I've seen many articles like this. However, yours is more elaborate than the others.

    It would be nice if Apple could really do something about this. My site is one of the last sites left doing anything Apple TV-related. My site might have to close down too if Apple doesn't update this product any time soon.

  7. AppleTV should be a PVR. This is so obvious, that I have to think that Apple hasn't done so because of fear that the studios providing content for iTunes would object, insist on crippling the PVR or worse --sue Apple, just as they sued Sony, ReplayTV, Cablevision, and the manufacturers of Rio, the original MP3 player.