Tuning Out Apple TV—for Now

Apple TV will probably get better. But it will need to quickly adapt the device to keep up with a rapidly evolving market

by Arik Hesseldahl

I got my first look at the Apple TV device the other day, and I have to say I liked what I saw. But it's unlikely I'll buy one anytime soon.

I happened to be in an Apple (AAPL) Store, accompanying a friend who was shopping for a birthday present for his girlfriend. He settled on an 80-gigabyte video iPod. But while we were in the store, he wondered whether maybe there was something else she might like better, since she already has an iPod nano. So I gave him my little guided tour of what's what in the Apple Store, and showed him Apple TV.

My friend was only marginally impressed. First off, he doesn't watch much TV. When he does, more often than not he's viewing a DVD. I get where he's coming from, and I think a lot of people will find themselves in the same boat until the company packs Apple TV with more storage, provides a connection to the Internet that bypasses the Mac or PC, and finds a way to include content that's not necessarily downloaded exclusively from iTunes.

Depends on iTunes Content

I've argued with myself about whether I want to buy one, and right now I'm leaning toward holding off, for a variety of reasons. To begin with, there's the inconvenient fact of my TV habits. I'm loyal to one, maybe two shows at a time. I loved The West Wing on NBC (GE), and have in the last few years gone mad for Battlestar Galactica on the Sci Fi channel, and just recently lamented the end of Rome on HBO (TWX).

Of those, the only one I have any experience watching in a downloaded format is Battlestar. Last fall, I found myself unable to see the latest episodes on Friday night because I was usually making the two-hour drive between my city apartment to a weekend home on Long Island. Unwilling to wait until the following Monday to see my recorded show, I started downloading the episodes from iTunes and watching them on Saturday on my laptop.

For the above scenario, I can't imagine going to the trouble to buy and set up an Apple TV, especially for just one show. Purchasing the device makes much more sense if you buy lots of video content from iTunes, which I don't. Many people apparently do. Last month Apple disclosed that it has sold some 50 million downloads of TV shows and 1.3 million movies. And while that's a fine business for now, things are moving so fast it's hard to say definitively that the pay-per-download model has the same future with video that it appears to have with music.

Beyond the exception of subscription-based networks, cable, and satellite, TV has always been free. And that's how it will likely remain, as distribution of programming shifts largely to the Internet, supported by advertising as in traditional broadcasting. And therein lies a potential flaw in Apple TV and any similar concept.

Joost One More Option

As it happens, I just tried Joost, the new service from the creators of Skype (EBAY) and Kazaa. Given the history of its founders, it should be no surprise that Joost uses a peer-to-peer distribution model for pushing fully licensed TV and video content to users. In a peer-to-peer network, there are no huge server farms, as there are in an iTunes-like environment. Instead of single users all downloading their content from the same place, multiple users download content by getting little pieces from other users who happen to have the content. This distributes the network strain, so no single server is besieged by millions of people all wanting a piece of popular content.

With Joost, the content starts on a few servers, then as it gets downloaded by many users, the peer-to-peer technology kicks in, and all those users help other users get the content. The more people who have already downloaded content, say, a much talked-about clip from American Idol, the more people can have it fairly quickly. And unlike other peer-to-peer networks that generally are used to trade pirated content, what's available on Joost is fully licensed and legal and delivered with short ads. I found a few programs from MTV (VIA), CNN, and a few other places, and the image looked great.