Apple gets intense about its hobby.(INTERNET VIDEO COMES TO THE TV)

The Online Reporter

November 6, 2009

- New Features Now, New Service Soon?

- Bridging Music and Video

Apple has released the Apple TV 3.0 software, giving its set-top box a much needed upgrade and extra features that move it out of the "hobby" category and into the sellable one. Beyond the software updates, a few recent developments on the iTunes end makes us think there's a lot more there than meets the eye.

The big redesign seems aimed at all of Apple TV. The main menu has been cleaned up and allows users to search for content a bit faster. YouTube seems to work well so far, with only a few content restrictions. The box now works with iTunes Extras movie content and the iTunes LP albums, in full screen and full-featured. Apple is sending out updates to users who have already purchased these. It seems for LPs that only part of the file is being replaced with the download.

Apple has also tossed in Genius Mixes to the Apple TV basket, and that with new access to Internet radio makes the box a single-unit home theater. Apple TV can now access almost everything that iTunes can--apps being the big difference, but we expect them to come soon.

Now that it's so well integrated, why not give users a big screen to play games, use apps or even surf the Web on through integration of the iPhone and iPod line as remotes or content sources?

For photos, Apple TV supports HD images through iPhoto Events and iPhoto Faces, which gives access to photos organized by people identified in tagged pictures.

Through iTunes, the service give access to around 8,000 SD films, 2,000 in HD, 11 million songs, 10,000 music videos and 50,000 TV show episodes. The Apple TV with 160GB capacity will set you back $229.

Apple TV and the Cable Subscription

A report from MediaMemo and others that's been getting a lot of attention is the possibility that Apple is shopping for a $30 per-month subscription plan for TV content delivered via iTunes.

Those 100 million iTunes users might be a pretty tempting selling point for the US networks, especially if the report is true and the service wants to launch early next year.

This could also explain why Apple and AT&T were so unfriendly toward Sling Media's Sling Player.

If this is truly being considered, Disney is the most likely to jump on board, with ABC and ABC Family content. Disney has a strong tie to Apple with both Jobs and its past successes--Disney sold around $4 million worth of content in the first two months of its presence on iTunes back in 2005-and it has been the most forefront putting ABC content out on the Web and on platforms other than its own.

The report says the industry is giving it mixed reviews, and while not likely tied specifically to a device, the new Apple TV updates will likely help.

CBS will be a network to watch because it has perhaps the most to gain from a subscription service. The reason is because CBS offers a TV.com app for the iPhone, as well as the TV.com Web site for PC users, and it already streams a lot of its new show episodes for free. For the iPhone, these are broken up into segments that are good for watching on the go.

If the subscription service works the same way as movie rentals do, files that exist and work for only a small window of time, say a fortnight, perhaps--for this kind of service--CBS could get a better presence on mediums it is already comfortable with and also better revenues.

There are countless reports that Hulu is going to develop a for-pay premium model, but this is where Apple could once again walk into a new market and put out a more desirable service for the user.

Netflix and iTunes have shown that movies and older TV episodes work streamed, rented and downloaded on the Web. The proof is in the sheer number of services that have followed and devices that cater to these services.

How Apple Got Its Groove Back

It wouldn't be Apple without a little music news, so part of the company's new push on iTunes is a Music Movies section--and this ain't your grandma's show tunes.

Apple will launch a new marketing effort designed to drive music buyers to music-themed movies in its video store.

Apple has added a "Music" genre to its Movies section and landing page, which will feature music films like concerts, movies about bands, documentaries and music-focused feature films. 

One of the first exclusives is "It Might Get Loud," a documentary about guitar legends Jimmy Page, the Edge and Jack White, which iTunes will offer December 8-22, before it goes on sale on DVD.

So far, the service has picked up a slate of older music related films, including pieces on U2, Bob Dylan, John Lennon, Neil Young, Jimi Hendrix and The Doors.

Apple is looking to create a bridge between its biggest sales volume, music, and perhaps a bigger revenue-generator, movies.

The studios and the recording industry have to be happy about the focus. Estimates put the DVD sales of music-themed content down around 25% to 30% compared with this time last year (according to Digital Entertainment Group, total DVD sales are down around 14%), while digital movie sales and rentals have climbed roughly 20% so far this year.

Apple is pushing a lot of content to its platforms. Making Apple TV a central focus in all of these coming sales will help bring the set-top box into its own right.