Rumors swirling around Apple’s perennial lack of presence the annual Consumer Electronics Show, about to take place in Las Vegas, and around an Apple press conference now set for late January all are indicating AppleTV is going to, at best, limp along for another year without any significant impact on the industry.

Apple won’t talk about it, but the reason is widely understood to be the company’s inability to convince content providers to abandon the tiered offering model commonly used by the cable-TV industry. Apple wants to sell shows one at a time, a la iTunes, but content providers aren’t about to risk their current revenue stream to let it do so, leaving AppleTV without access to the shows viewers most want.

Put another way, Apple’s cutting-edge technology is nice, but content still is king, and Apple doesn’t have it.
According to various sources, none of whom are willing to be named, Apple does have a lab prototype of a large-screen TV with its AppleTV system built in. The company still offers its $99 AppleTV set top, but consumers have pretty much ignored it because the best content provider AppleTV can muster is a deal with Netflix – whose content already is available on every IPTV system known to man. Word is that the large screen is going to stay locked in the lab for at least a year and, reportedly, Apple has no signed production contracts. Despite early rumors, the press conference reportedly will center on such content as textbooks and a service called iTunes U – not on TV content.

Meanwhile, word is that a string of TV manufacturers are going to unveil sets at CES with GoogleTV built in. That group is said to include Samsung Vizio and LG. Google, it seems, just won’t give up, following the abject failure of the first generation of GoogleTV – the Logitech Revue STB and one TV model from Sony. Indeed, the Revue was such a disaster that it resulted in Logitech’s CEO being shown the door, amid reports that more Revues were being returned than were being kept by consumers.

The new offerings will be running Android Honeycomb, allegedly far more reliable than the first flush of offerings running GoogleTV. On the content side, Google has just one ace – its deal with satellite provider DISH. But GoogleTV is positioned as just an adjunct apps-delivery add-on to DISH’s video, which follows the same content sales model as the cable-TV industry in general. That also limits GoogleTV to just the one provider and its customer base of around 14 million, hardly the size of market share that Google enjoys.

Far more ambitious, indeed, is Microsoft and its MicrosoftTV. But Microsoft isn’t playing the content game – it must be carefully studying AppleTV and GoogleTV, concluding that taking on the cable industry isn’t a winning hand. Rather, it’s no secret that Microsoft has a deal with Comcast and is positioning its Xbox game system as doing double duty as a Comcast cable box. It’s also signed Verizon’s FiOS video. Formal announcements will be made soon of those plus content deals with HBO, EPIX, Bravo, Syfy and a bunch of others, all to be offered with the next generation of its Xbox Live service.

Stuart Zipper

The Daily


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