A social(ist) future for the Apple TV

By Jonny Evans

"There is no life I know to compare with pure imagination,
"Living there you'll be free, if you truly wish to be."

Willy Wonka, Charlie and the Chocolate Factory

When it comes to Apple's [AAPL] adventures in video, the Apple TV still looks like the grey-smocked, gruel-eating, workhouse-sheltered estranged poorer iOS cousin to iPad and iPhone. So, where are we going with connected TV?

[ABOVE: For your amusement, a young Apple CEO Steve Jobs prepares for an early TV appearance.]

We're just switchin' channels

"Peter spoke so his TV could hear: 'Play the last unplayed Doctor Who episode and take me to the program guide after the show.'"

Harris Interactive tells us:

"Over three-quarters of Americans (77%) have watched a TV show on the Internet rather than on a traditional television. Just three in ten U.S. adults (30%) say , however, they are not interested in giving up their cable television in favor of watching TV shows on the Internet, yet over half of those with cable would stop paying for cable, if certain stipulations were met (56%)."

In the current implementation, Apple TV's A4 processor doesn't live up to its full potential. Many developers -- including the excellent Boxee -- have shown it to be capable of much more, but Apple seems slow to switch on its powerful TV assistant.

Perhaps that's unfair: Apple TV already lets you stream all your iTunes content to your HDTV; you can stream music through it and in the US it boasts Netflix movie rental. When iOS 5 resolutions increase to 1,080p in iOS 5, then movies, TV shows and many apps will look fantastic on an HDTV screen.

You can even imagine voice-controlled televisions used in conjunction with mic-equipped iOS devices, including your iPhone.

What's the frequency, Kenneth?

"Zeb needed to know the weather, 'Pause show,' he barked, choosing 'launch weather app' using his remote control and the on-screen menu. He usually walked to his office, but he quickly checked local transport status using another app, before returning to his show."

Apple TV becomes a games console with iOS 5 later this year, when iPad users will be able to use their tablet to control action wirelessly imaged on their TV screen using AirPlay Video. Apple was previously expected to introduce its own streaming TV and movie service via iTunes when it launched iCloud, but this hasn't happened -- yet.

These are all tiny steps on a long journey. Apple CEO Steve Jobs has previously discussed the need to develop a new business model for broadcast television, arguing that the existing subsidized model is hard to penetrate and doesn't leave much fat for those who try.

Some think Apple's eventual effect on the television market will dwarf its impact on the iPad market. Take Netflix CEO, Reed Hastings who said, "Tablets are not a revolution. The Apple TV is more important to us than the iPad. The big deal for us is Internet connected TVs."

Ad-supported iTunes TV?

"Zoe loved Desperate Housewives. She'd watched all the current shows on regular television, and had begun working her way through the back catalog. She could buy them all, but this was expensive, instead she chose the ad-supported video streaming version from iTunes. She could still flick through the ads on these if she wanted to, but she had to pay a small fee each time she did."

Content creators like these new distribution mechanisms -- but need the money. They don't want to lose the sponsorship, appearance and advertising fees they get from established broadcasters unless there's a new business in it for them.


[ABOVE: Recent Harris Interactive data shows that the way we watch TV is changing.]

Bring iAds into the equation and there's a solution waiting to happen -- if Apple can find the advertisers then content creators can build an advertising income by grabbing a 70 percent share of the ads screened beside their content. That's a numbers game, of course, this would yield a tiny income at present with over a million Apple TVs sold.

Numbers like those make it less attractive to content providers selling blockbuster titles, but a nice potential side income for niche shows and broadcasters. Add other iOS devices and it looks more interesting, but still limited by territorial restriction.

Pointing to people power

Any move toward reinventing conventional broadcast models needs a critical mass of users to deliver a viable market.

Naturally, given the buzz around social networking, many hope that to socialize television in a new couch potato 'socialist' revolution.

  • After all, what could be better than television for the people, governed by the people and shared by the people?
  • What about crowd-sourced movie listings and location and social circle-based remote group access to televised content?
  • What about votes and recommendations from your peer group?
  • How about a nice Twitter overlay when you and all your followers are watching and shouting at a current affairs show?
  • After all, we all know Twitter speaks a lot more sense than politicians ever do.

Bigger than an Arab spring

"Professor Higinspawn was a lecturer in economics and social inclusion at a lesser university. He was watching popular UK current affairs show, 'Question Time', when he was incensed at what one of the speakers, a government minister in charge of social inclusion was saying. Didn't she know that her analysis was rejected twenty years ago? He Tweeted his response using his Apple TV. He didn't expect it to be a news headline the next day."

So what's required here?

We know Apple's moving to embrace Twitter with some deep support for that social network, starting in iOS 5. We can even anticipate ever more accurate voice recognition in future, with Nuance today introducing a software update which allows iOS users to post to Facebook and Twitter accounts using voice commands.

[ABOVE: Toward social entertainment.]

Illustrating the change, TV recommendation engine BeeTV recently released a new iPad app which lets you share what you are watching with friends. Sign into your Facebook or Twitter account and you can see what other signed-in friends are watching. You get trending data and access to what other people are saying about TV shows.

High value, connected markets

"David had a wedding to attend the following weekend. When it came to fashion he was a nincompoop, but while watching a movie with his girlfriend, she noticed a great suit. 'You'd look great in that', she said, quickly freezing the screen to raise the transparent augmented program information assistant. Selecting the suit, she ordered the assistant to go online and find the manufacturer. He wore the suit to that wedding."

When you consider the demographics of the average iOS user -- often male, often with high disposable incomes, principally at the prime of their working lives, demographic data as to their behaviors is gold dust to advertisers.

Think on this. PwC figures reveal that BSkyB's market value of £16 billion and ten million active users equates to a value per user of £1,574. Now consider this: Facebook, with 500 million active users and a market value estimated at £40 billion has a value per user of just £80. LinkedIn, (75 million users and £6 billion value) gives £72 per user. Yet these are emerging as powerful advertising platforms -- where users are cheap.

What does this mean? It is only a question of time until social networks move to promote themselves as channels.

Apple + Twitter explained

Facebook is already cooking something. Company boss Mark Zuckerberg last month said music, television shows and books will be "among the next products to become 'social' through the website."

Given Apple's patchy relationship with Facebook and the value of social'ism' to the future of content distribution and consumption, perhaps Apple's move to embrace Twitter is best explained by Zuckerberg's comments.

"Listening to music is something people do with their friends," he said. "Movies, TV, news, books -- those types of things are things I think people just naturally do with their friends. I hope we can play a part in enabling those new companies to get built, and companies that are out there producing this great content to become more social."

AOL in May announced the relaunch of its flagship television content site under the new AOLTV.com brand and the launch of AOL TV mobile apps for iPhone and iPad. The entire experience is powered by technology from i.TV.

"Over the coming months, i.TV will work with partners like AOL to innovate and introduce new features and products that will make watching TV more interesting, more social and ultimately more fun to watch," i.TV vice president, Justin Whittaker, told me in an email.

The telly vision thing

The danger is that short sighted television executives may not grasp the opportunity. "We work closely with cable and satellite companies here in the US as well as broadcasters and it's fascinating how little they understand about the social technology," explained Whittaker.

"Sure, there are some really forward-thinking network execs who want to power second screen interaction with their shows. Basically enable producers, cast, and audience to all interact with each other. We're in full support of that but that's mostly coming from that is mostly coming from digital and marketing execs and not the business decision makers who can put social at the heart of what they do."

Traditional broadcast and media firms should act now to ensure they don't become bit part players in an always-on, socially-connected new broadcasting paradigm.

Watching the headlights, joining the dots

Meanwhile Apple's iOS juggernaut is inexorably moving to applying its next incremental improvements to its ecosystem of products, services and applications on schedule for September's iPhone, iPod and Apple TV upgrades.

These upgrades will coincide with the launch of iCloud, and may yet inform us about what's been happening behind the scenes in Apple's negotiations with Hollywood and television content producers.

And may yet see Apple play a social card to consolidate a connected high-value marketplace from which the company can take steps to deliver new models for TV, including (next year) a connected Apple-branded television. Which will be very unlikely to be manufactured on an OEM basis by Samsung.

What are you expecting? Does Apple really have plans for TV, or is it slowly ceding the over-complicated market? If it does have a plan, how do you see it shaping up? Please let us know in comments below. I'd also very much like to invite you to follow me on Twitter so I can let you know when I post new reports here first on Computerworld

Copyright © 2011 IDG Communications, Inc.

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