Today in the TV industry a new buzz has been generated with the availability of online content. It is an understatement to say that TV has come a long way in the past 10 years. Cable TV and DVD rentals are beginning to look like a thing of the past. Try to remember the last time you walked to blockbuster to pick up that new release you had just seen a commercial for. Its a lot like trying to remember the last time you used that cassette player to listen to music. With the continued evolution of technology, television services are becoming more and more accessible and convenient. The most recent advancement of this technology has been the transition of television into the online streaming world. There are a couple of popular products that have taken a hold of this new market. They include Apple TV, Boxee, Logitech and Roku.
One of the companies that is pioneering some of the new technologies in the world of television is Apple. The first generation Apple TV was introduced in January of 2007. Since then Apple also introduced a second generation in September of 2010. The second generation of the Apple TV allows users to stream TV and Movie content, as well as music and photos online. How it does this is simple, an HDMI outlet allows the Apple TV to connect to your television (those that have an HDMI input). The WIFI enabled Apple TV then connects with a computer to stream content on your television. The design of this product is very appealing, it is smaller than most similar products and has a clean glossy finish. You can purchase this product for 99$.
For Apple, this is an opportunity to capture part of the online television market. But what is the likelihood that Apple will be able to do so when compared with its competition? One of the major challenges facing Apple TV is content availability. Currently, Apple TV is only partnered with ABC, Disney, Fox, and the BBC. Competitors such as Roku offer a much wider selection of viewing content. The apple TV is compatible with Netflix, but this feature is not going to give it a leg up on the competition, as this is standard across the board. One of the main selling points for the Apple TV was the ability of users to get movie rentals “the same day they come out on DVD”, according to the Apple website. Unfortunately this has not been the case, studios have continued to make the decision of when new releases will be available. So what advantages does Apple TV have in this market. According to engadget.com, “none of the other options we've tested have felt as simple, solid, and easy to use as the Apple TV”. For Apple, capitalizing in this market may be a matter of acquiring more content for the Apple TV. If they are able to do so, online TV has the potential to be highly profitable for them in the future.
The obstacles for online TV are very similar to those faced by online movies. As this industry began to expand years ago, various online services attempted to break into the market, and many of these failed. These services included Movieflix and Movielink. One of the major problems faced by these services was the legal acquisition of movie content. While it was quite difficult for these companies to get licenses for movie content, many illegal services of the same nature could pirate this content and provide a much greater selection at no cost. In spite of these obstacles, companies such as Netflix have proven that with the right business strategy there is a large margin for success in this industry. What lessons can we take from the online movie industry? First of all, it took longer than expected for companies to invent a strategy that could successfully catch on. More importantly, there was a lot of doubt surrounding the online movie business, yet these fears proved to be irrational. We can expect to see similar patterns for the online tv industry. Then again, what great invention doesn't have its group of naysayers?
So what do I really think of Apple TV? I think that it's a waste of money, and I'm not afraid to say it. I am a college student. I know that $99 is not a bad price for this type of technology. But that is $99 that I would rather spend on food and beer. Why would I buy an Apple TV when I already have a television, a laptop and and HDMI cord? So that I can navigate wirelessly? I can already watch Netflix on my TV by simply hooking my laptop up to my TV with an HDMI cord. Not only that, but I can go on a website such as Sidereel.com or Fastpasstv.com and stream just about any TV show or movie I want. And I can watch these movies while they are still in theaters! Don't get me wrong, the luxury of a wireless remote for my TV and the improved picture quality of the Apple TV is something that I would desire at a financially stable place in my future. But for now, I'm not willing to pay the $99 upfront and continual fee of $1 per show and $5 per movie that I would be tied up with after a purchase of the Apple TV.
Now I could go on and on about my personal feelings towards this product, but lets look at the bigger picture for a minute. According to one source, the average american spends 9 years of their life (assuming they live to be 65 years old) watching tv (www.csun.edu). It is the large cable companies that are currently profiting the most off of this industry. But as the tv industry moves towards an online viewing experience, the opportunity for many new players to capture a steak in these profits has arisen. Imagen how profitable Apple could be if the Apple TV became the major device for viewing television in the future. Assuming that each television episode is one hour at $1 per episode, Apple would be making near $80,000 dollars on the average American. Obviously this will not be the case, there are already other similar devices on the market, many of which provide a means for watching online tv content without charging any fees. The real question is whether the general population will follow this trend of viewing tv online. And if so, which device will capture the largest market share and how will they make a profit while legally providing these services? As of right now, we can only wait and see what the future holds for this technology. As for Apple, we can only speculate whether or not they will be able to adapt their product and remain a major player in this market.
