What it is: Apple TV is an accessory that connects to an ordinary TV set and provides content through the Internet.
The Apple TV has been a deceptively simple product that’s slipped under the notice of most people. Basically the Apple TV acts as a link between the Internet and your TV set, allowing you to view Internet content on a larger TV screen.
This might seem kind of useless until you realize that many people watch movies and TV shows over the Internet using a computer, tablet, or smartphone. Allowing Internet content on a larger screen TV just gives people another way to watch Internet content.
However the real advantage of Apple TV isn’t just turning your TV into a larger screen, but in helping break up the obsolete structure of TV watching itself. Back in the old days, TV signals came through the air for free and you just needed a TV antenna to catch those signals. Some TV sets had their own antennas (known as rabbit ears) while others connected to a cable that linked to a much larger antenna strapped to a chimney of a house. This larger antenna captured signals better to allow cleaner viewing of TV shows.
Of course back then, there were only three networks to watch anyway: ABC, NBC, and CBS along with maybe a local station or two. If you wanted to watch a show, you had to rearrange your schedule to coincide with the TV network’s schedule. Get home too late and you missed your favorite show until next week.
With the introduction of VHS tapes and later DVR recorders, you could record your favorite show and watch it any time you wanted at your convenience. Now the network’s schedule made no difference since you could watch TV on your schedule.
Instead of relying on TV signals and antennas, the next evolutionary step came from cable TV. Now you had to pay for service with varying options to buy additional channels. Although cable TV gave you more channels to watch, your different options meant you often had to purchase more channels than you really wanted to see all the channels you actually wanted. Because of this inconvenience and rising cost, many people are simply cutting the cable altogether as clueless cable TV companies keep jacking up prices while offering worse customer service in return.
People can cut their cable TV subscriptions because of the Internet and that’s the future of Apple TV. You may need to subscribe to multiple services like Netflix or Hulu, but Apple is betting on content providers directly reaching consumers through their own apps or through iTunes that allows purchasing of individual TV show episodes. Ultimately the future of TV watching is a la carte consumption where you pay for just the TV shows you want to watch.
Right now this is inconvenient since you may need a Hulu subscription to watch TV shows and a Netflix subscription to watch movies with iTunes offering a little bit of both. The real future will come with all you can eat pricing.
If you remember back in the old days of Internet access, you had to pay per minute, which made accessing online services like America Online or CompuServe expensive. When America Online switched to a flat fee pricing, their subscribers could use AOL all they wanted, and that soon became the norm. That’s the future of TV watching.
Initially every content provider will try to market their content towards consumers so you can watch individual shows, but bundles should start appearing soon, allowing you to watch more shows at a reduced price. The difference will be that this new way of watching TV will still be cheaper and more flexible than today’s cable TV bundles that charge too much for channels most people never want to watch, which forces them to buy multiple bundles to see the channels they do want to watch.
A la carte TV watching is the future. How we pay for it can be cumbersome or convenient, and whoever figures out how to make it convenient will grab the bulk of subscribers and money as well, and that’s the future that Apple TV is aiming for.