Apple Bows Revamped Set-Top-Box With Movie, TV Streams

1 Sep, 2010 By: Erik Gruenwedel

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As expected, Apple Inc. Sept. 1 officially unveiled a downsized edition of the AppleTV, which for the first time offers users digital access to rental streams of new-release movies and TV programs.

Movies, priced from $3.99 for high-definition ($2.99 standard-definition), and TV programming priced at 99-cents per episode, can be rented — not bought — for a 24-hour viewing window. Content, which initially features programming from ABC TV and Fox Filmed Entertainment, can be searched via title or genre, with a short review, trailer and ratings available from RottenTomatoes.com.

The dearth of content at launch underscored concern among several studios agreeing to Apple's distribution terms. CEO Steve Jobs, during the AppleTV unveiling, said he thought "the rest [of the studios] will see light and get on board with us.”

The new AppleTV, which retails for $99 compared with $299 (now $130) for the previous edition that first launched in 2006, also offers YouTube videos, music, photos and streaming for Netflix subscribers, among other features.

In addition to acting as a conduit between the Internet and the television, AppleTV can access content from the iPhone, iPad or iPod Touch, with the portable devices doubling as remote controls through a free app.

Separately, Apple bowed a new line of iPods, including a revamped Nano model with a touchscreen.

Apple’s success with the iPhone, iPod and iPad should help it catapult consumer awareness of Web-enabled living room devices, according to iSuppli Corp.

The El Segundo, Calif.-based research firm said AppleTV must still contend with a host of competing players, including Web-enabled Blu-ray Disc players, video game consoles (Xbox, PlayStation and Wii) from Microsoft, Sony and Nintendo, respectively.

In addition, movies and TV programming can be streamed via a variety of media players from Roku, Seagate and Western Digital and the forthcoming Boxee Box from D-Link Corp. Video-on-demand of new release movies is also available from Walmart-owned Vudu, Amazon VOD and Blockbuster On Demand — all accessed through a variety of devices, including a growing number of Internet-connected TVs.

Indeed, sales of Internet-enabled TVs will climb to 27.7 million units globally this year, compared with 12.3 million in 2009, according to iSuppli.

Eric Wold, analyst with Merriman Curhan Ford in New York, inclusion of Netflix on AppleTV will undoubtedly benefit the service’s long-term growth potential, but not much more.

“Given this [is] the exact same streaming service already available on any computer, set-top box connected TV, Internet enabled TV, numerous Blu-ray players, all three major video game consoles, the iPad, iPhone and iPod Touch — we see the incremental gains to be minimal,” Wold wrote in a note.

The analyst said the impact of AppleTV on Redbox is a non-event. “We continue to believe that Redbox’s $1-per-night price point [versus] $2.99 to $3.99 digital rentals, will outweigh convenience with consumers — especially in this economic environment,” Wold wrote.

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