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Posted at 08:00 AM ET, 01/04/2012

How disruptive is Apple TV?

One of most hotly anticipated tech products of the coming year is the new Apple TV set. Unlike the current Apple TV set-top box available for $99, this new Apple TV would be a full-size television set connected to the Internet, offering live-streaming of cable and network TV content as well as full integration with digital content from Apple iTunes and partner content providers like Netflix. In a conversation with biographer Walter Isaacson about Apple and his plans for television, Steve Jobs claimed that he had "finally cracked it."

But how disruptive would an Apple TV really be?

An Apple TV, the thinking goes, would disrupt the television industry the same way that the iPod disrupted the music industry. Imagine a 40-inch television set perfectly adapted for streaming content at a time when Americans watch more TV than ever before. Add to that new bells and whistles in the form of a voice-activated or gesture-activated interface and a simplified remote control for accessing content on your TV — and you can begin to glimpse the potential of Apple’s foray into the television business.

Yet, the tech world doesn’t need another TV.

Remember this time last year? The buzz back then was about 3D TV and how 3D content would revolutionize the way we watch television. But how many people ended up buying 3D TV sets? Google, too, was fresh off its debut of Google TV and seemed to be on the verge of finally monetizing its costly YouTube acquisition. While Google still claims that it has cracked the code for live TV and the Web, the reality is much more complex. Not only has Google had difficulty lining up content partners — it also has had difficulty holding on to its hardware partners.

What content and distribution companies have always known is that the most important room in any tech consumer’s home is the living room. The amount of television content that people watch in the living room still dwarfs any amount of content that they watch anywhere else. Even with Apple’s iPad, which promised to make media consumption a take-anywhere experience, the majority of media consumption still happens at home after 7 pm, presumably on the couch. No wonder every year brings a flurry of new set top boxes, such as the old Apple TV, that promise to make the content consumption experience in the living room easier and more seamless than before.

From this perspective, what may be most innovative about the new Apple TV would be its pricing model. Apple would fully extend its a la carte pricing to the TV industry, making it possible not only to unbundle individual TV shows from their series (possible now with Apple TV), but also cable networks from their cable subscriptions. Imagine being able to watch premium cable TV content live without being forced to sign up with your cable provider for a subscription package. As Netflix found out earlier this year, however, getting the pricing right for content delivery is something easier said than done.

Much as the real genius of Google + was not as a standalone social network, but rather as a social layer to wrap together the full Google ecosystem, the real genius of Apple TV may be that it is the final way to wrap together every part of Apple’s ecosystem, ensuring that all multimedia content flows from the iTunes store to an Apple device, whether you’re home or on the road. As standalone hardware, the Apple TV may not be innovative, but as way into your living room (and your wallet), it may potentially be the last, brilliant masterstroke of Steve Jobs. The Internet wars of the future will be fought over operating systems and ecosystems, not over hardware and software.

Read more news and ideas on Innovations:

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Wadhwa | Five tech predictions for 2012

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By  |  08:00 AM ET, 01/04/2012

Categories:  Dominic Basulto, Business, Technology, Morning Read, Invention

 
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