ANALYSIS: Apple TV’s YouTube Connection Advances Google’s Media Agenda
Move Also Raises Competitive Stakes to Cable
By Gary Arlen -- Multichannel News, 5/31/2007 5:40:00 AM MT
Of all the alliances Apple could create to deliver Internet video to the living room via its new Apple TV set-top box, the choice of YouTube was a typically audacious move if only because it accelerates the media presence of YouTube’s parent, Google, with its well-known voracious media appetite.
Although the deal adds another “coolness” factor to Apple TV (as if that were needed), it also enhances the credibility of Web-delivered TV as a video-on-demand competitor to legacy providers, including cable operators.
In announcing the Apple TV/YouTube package, Apple CEO Steve Jobs made it clear that this is just one -- for now, the biggest -- of many alternative video packages that will be available via his new device to deliver Internet video to conventional TV receivers.
“We’ve wanted to do this for a few years,” Jobs said. “It’s amazing the variety of what you can get,” he added, using a term that he repeated at least three times to describe the opportunities of Apple’s latest digital initiatives.
To underscore his competitive attitude toward the cable industry, Jobs casually observed that cable providers “use that very strange software called ‘OCAP.’” He added that Apple could “not see a go-to-market strategy” that makes use of such technology. Jobs suggested that Apple TV is comparable with the DVD player, which was the fastest-selling home-video device in consumer-electronics history.
“We want to be the DVD player for the Internet age,” Jobs said.
As he demonstrated examples of YouTube short clips at The Wall Street Journal’s D: All Things Digital conference in suburban San Diego Wednesday, the challenges of Internet video became clear -- and, in some cases, blurry.
When displayed on a 100-inch screen, the often-fuzzy amateur videos occasionally became painful to watch. Although the content itself was compelling, many in the audience -- including session moderator Walter Mossberg, the Journal’s host -- wondered if viewers would tolerate the grainy, shaky visuals on their expensive, new digital monitors at home.
One of the videos, a “human sling shot” with a bungee-cord-like launch from a lawn tractor, generated plenty of guffaws from the tech-savvy D: audience, but the production values, especially as seen on the huge screen, defined a watch-it-once experience.
Such nitpicking, however, begs the question, since YouTube and other emerging short-form video distributors are looking for more professional content for their Internet-video services. A conference speaker prior to Jobs, CBS CEO Les Moonves, pointed out that his company hired a “band of kids” to create series of short-form programs, intended for Web video (although not necessarily for Apple TV). Plenty of other high-quality productions are in the pipeline from other professional sources.
Jobs noted that Apple TV will be able to carry HD video, adding another competitive element to the set-top wars. He offered no details.
In his demonstration, Jobs highlighted new features of Apple TV navigation, including software that will be available for download in June to access YouTube and future content. A stylized version of the YouTube menu screen is available. An on-screen virtual keyboard (that is, an alphabet grid) requires users to move up, down, left and right via the remote control to type words when searching for a specific video.
Curiously, the demonstrated version did not include predictive typing, which would narrow the choices for the next letter in each sequence and bring up titles more easily. That may be a function of limited capability in the Apple TV processor, but Jobs did not address such technical details.
Jobs also skirted any discussion of revenue models for Apple TV and its new and future content partners.
The YouTube gauntlet allows Apple to move into the living room and, at the same time, take a smack at Microsoft, which has never fully conquered that turf despite the billions of dollars it has spent on cable-TV and telephone-company-TV ventures. Microsoft’s Xbox games products have successfully attained living-room presence, but even that product’s evolving broadband-access capability has not stirred the buzz Apple TV is creating.
Never in his remarks at the confab did Jobs draw a connection between Apple TV and the even-more-highly-awaited iPhone. Apple’s CEO spent plenty of time discussing the new mobile phone, which will be exclusively offered in the United States on AT&T’s wireless system. Given the competitive nature of phone and cable companies -- and AT&T’s U-verse IPTV agenda -- it appears likely that Apple and AT&T will devise arrangements that converge the applications of iPhone and Apple TV.
In particular, the vaunted ability to control a set-top box, including setting up access or even remote viewing (akin to Slingbox capabilities) could become part of a multipurpose service. Since Motorola’s “connected home” and various Cisco/Scientific Atlanta plans envision similar services for cable operators, the aggressive Apple agenda takes on greater competitive implications.
Jobs’ comment on a seemingly unrelated topic, the use of portable devices, certainly raised the prospect for such services.
“Video is here to stay on portable devices; it will grow,” said the man in the black turtleneck and jeans -- an iconic prototype of the “Mac guy” in Apple’s TV commercials.
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