Will There Be an Apple TV Set in Two Years?

Apple TVObviously Apple is not oblivious to the fact that television as we know it is undergoing a dramatic shift — but as the Apple TV set-top box just languishes with no apparent direction, we wonder what exactly is the company’s living room strategy is. Piper Jaffray senior analyst Gene Muster thinks he knows what going on in Cupertino — he thinks we’ll see an Apple TV set by 2011 (hat tip to Fortune’s Brainstorm Tech blog).

Munster lays out a trio of newteevee tricks forthcoming from Apple. He predicts:

  1. A new Apple TV set-top box with TV input and DVR capabilities in the next few months.
  2. The company a subscription-based offering for TV content. Munster writes, “Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month). Such a product would effectively replace a consumer’s monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels.”
  3. An Apple TV set that wirelessly syncs up with iPods, iPhones, and Macs

We’re skeptical of a subscription service as outlined here. Apple may have relationships with networks, but those networks are hopping into bed with cable companies for TV Everywhere. Since cable networks get a big chunk of their revenue from cable operators, it’s doubtful they’d do anything to rock the boat. Plus, anyone remember the scuffle Apple got into with NBC?

As far as an actual Apple TV set, Michael Wolf over at our GigaOM Pro research service recently wrote a post on what’s next for Apple’s living room strategy and he just doesn’t see it. In response to Munster’s report, Michael emailed us:

“I think that the HDTV business in a commodity game at this point and one that Apple would be smart to stay away from. Apple can play in the living room, but to do so they don’t need to own the display, which is best left to low-cost providers with large-scale, low-cost manufacturing capacity like Vizio.”

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Video Helps Grow CDN Market, But Long-term Outlook Uncertain

Online video has significantly contributed to the growth of the market for content-delivery networks, two new research reports show, but it’s unclear how much the industry as a whole will benefit from this trend going forward. The worldwide value of CDN services is estimated to reach more than $2 billion in 2011, In-Stat reported today. That’s up from $1.25 billion in 2008. In-Stat attributes this growth largely to the increasing popularity of online video.

cdnrevenue

Those numbers are echoing similar predictions from competing market research outlet AccuStream, which is predicting CDNs to bring in $1.16 billion in 2010, up from an estimated $1.37 billion this year. However, the price war for online video delivery has actually resulted in video becoming a smaller piece of the cake in terms of percentage of overall revenue. And then there’s the big unknown: How will Apple’s and Microsoft’s plans to shoulder more of their data delivery in-house affect the industry?

AccuStream is estimating that Akamai delivered 31.9 percent of the 22.5 billion professional video views served so far this year, with Limelight Networks (12 percent) and Level 3 (11.2 percent) fighting for second place. The company’s “CDN 2010: Revenue, R&D, Cap Ex and Operational Performance Analytics” report is also predicting that the CDN industry will see its revenue grow by 16.4 percent in 2009, and the number of contracts will increase by 23.2 percent this year.

Notice the difference here? More contracts are adding less on average to the bottom line, and the monthly recurring revenue is actually down 5.5 percent this year, according to AccuStream’s forecast. That’s partially due to the fact that the prices for online video delivery are falling, driven not only by cheaper bandwidth, but also a price war between vendors.

“Entertainment is the most price-competitive segment,” explained AccuStream Research Director Paul Palumbo, which is why he believes 2009 and 2010 to be “transformational years” for CDNs. “The overall dollar value of entertainment is increasing, but its share is decreasing at present, due to pricing,” Palumbo added.

Adding to this uncertainty is Apple’s confirmation that it is working on a billion-dollar data center in North Carolina. The company has so far been using Akamai and Limelight to distribute much of its data, and Businessofvideo.com blogger Dan Rayburn probably isn’t alone in thinking that the two companies “could very well lose a large portion of Apple’s business” once that data center goes online.

Apple isn’t the only one trying to save costs by investing in data delivery infrastructure. Microsoft recently revealed that plans to deliver the majority of its data through its own Edge Computing Network by 2010, with a huge chunk of that data stemming from video delivery.

However, not all is lost for CDNs, even the ones serving independent-minded companies like Apple. Both AccuStream and In-Stat are predicting that international markets will see a huge growth for CDN services, as online video is becoming more popular overseas, and even a brand-spanking new data center in North Carolina doesn’t really help you all that much if you want to serve video to viewers in Europe or Asia.


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A Big Week for Blu-ray, But Is It Enough?

blu-ray-logoIt’s been a year and a half since Blu-ray toppled HD DVD to win the high-def DVD format war. While Blu-ray won that battle, it hasn’t exactly set the marketplace — or the tech industry — on fire. Consumers have been relatively slow to upgrade to Blu-ray players, and many tech pundits are convinced it’s nothing more than a stopgap technology.

Gee, the future for Blu-ray seems pretty bleak, doesn’t it? Well, not exactly. This week, the format gained some ground, earning the backing of its onetime archrival, Toshiba. And it’s rumored that Apple, which has been vocal in its opposition to the HD disc format, may even be next in line. Combine this with recent news that sales of Blu-ray players are increasing and that more consumers are aware of the technology and plan to make purchases, and you might think that a Blu-ray boom time has arrived. I’d like to think so, too, but I’m not convinced. Still, it is a good sign for the future of the format — and for consumers who want more Blu-ray options in stores.

Blu-ray on the Upswing

Recent data from the NPD Group shows that sales of Blu-ray players increased 72 percent in the first quarter of 2009 compared with the same period in 2008. Of course, the first quarter of 2008 was when the Blu-ray-HD DVD war ended, so the comparison isn’t entirely applicable. But the research also shows that consumers are more aware of the Blu-ray format than they have been in the past, and they’re ever-so-slightly more inclined to actually buy Blu-ray players. Six percent of people said they are “extremely or very likely” to buy a Blu-ray player in the next six months, compared with 5 percent of consumers asked that same question in an August 2008 survey. FutureSource, meanwhile, is predicting that Blu-ray discs will account for 50 percent of all home video sales by 2012.

A 1 percent increase in the number of people “extremely or very likely” to buy a Blu-ray doesn’t bowl me over. Sure, you can blame the economy — if times were better, I’m sure more people would be thinking about buying a Blu-ray player. But even in today’s economy, I’d like to see more than a 1 percent increase. And a 50 percent market share gain by 2012 seems like an awfully slow uptake.

Toshiba: HD DVD No More

The least-surprising Blu-ray item of the week is news that Toshiba has finally thrown its support behind Blu-ray. The company says it will launch a line of Blu-ray products this year. This is notable because Toshiba, of course, was the primary backer of the HD DVD format — the chief rival to, and eventual victim of, Blu-ray.

Toshiba said it will offer Blu-ray players and laptops with Blu-ray drives later this year. The company also announced that it will join the Blu-ray Association. In a statement announcing the news, Toshiba said the decision to jump on the Blu-ray bandwagon was made “in light of recent growth in digital devices supporting the Blu-ray format, combined with market demand from consumers and retailers alike.”

The move is not unexpected. Industry watchers have been waiting for Toshiba to back Blu-ray for more than a year. The big deal here seems to be not the fact that Toshiba has finally succumbed to the wills of Blu-ray, but instead that it took it so long to do so. That Toshiba waited a year and a half to make this statement speaks volumes louder than the announcement itself.

Apple Goes Blu-ray?

Of greater interest (and intrigue) are rumors that Apple will add support for Blu-ray to the next major release of iTunes, version 9. While Apple has not confirmed the reports, BoyGeniusReport.com claims to have been tipped off to the news by a “pretty reliable source.” That source says that iTunes 9 will get “Blu-ray support” but doesn’t detail exactly what that means; Engadget, meanwhile is speculating that it may just be support for Blu-ray’s “Managed Copy” feature, which allows consumers to make a backup copy of their discs.

While Blu-ray support in iTunes is nothing but speculation at this point, it does seem to be a more substantial rumor than the one concerning Apple and the high-def disc format: that the company will add Blu-ray drives to its MacBook laptops. Adding the hardware would make it easier for Mac users to take advantage of the Blu-ray features in iTunes, but it’s still an unconfirmed rumor at best — and a pipe dream at worst.

And we’ve heard this before. Apple was rumored to be adding Blu-ray drives to the MacBooks that it debuted last October. When they arrived without Blu-ray drives, CEO Steve Jobs famously called the format a “bag of hurt.” Calling the licensing “complex,” he said: “We’re waiting until things settle down, and waiting until Blu-ray takes off before we burden our customers with the cost of licensing.”

If Apple were to throw its weight behind Blu-ray, it could be a giant step forward for the format. And I think that’s a good thing. Blu-ray may have won the format wars, but it’s still struggling, and it needs all the help it can get. Sure, I think we’re moving toward an all-digital future, where movies are streamed directly to our TVs. But I think that future is a long way off. In the meantime, I’d like a solid, reliable HD format. And, for now anyway, I want that format to be Blu-ray.


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Unofficial Apple blogger makes $125,000 a year

According to Silicon Alley Insider, Josh Gruber, who runs the site Daring Fireball, pulls in an estimated $125,000 a year from his blog.

John, reached by e-mail, wouldn’t comment on how much money his site makes, but he says it provides his full-time income. He says the site has recently been close to averaging 2 million monthly pageviews and about 250,000 monthly unique visitors — including some very important ones at Apple headquarters. He also estimates about 150,000 subscribers to his RSS feed.

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Dexim’s Decent iPod Dock

dexim_dockI really like Dexim’s AV Dock Station, a handy little gadget that lets you connect your iPod or iPhone to your TV. In fact, if not for one pretty major flaw, I’d be ready to buy one of these myself.

The DRA107 AV Dock Station is a compact iPod/iPhone dock that connects to your TV via composite A/V. The necessary cables — and eight different iPod/iPhone connectors — are included in the $69.95 package. You just connect it to your TV, plop your iPod into the dock, and you’re in business. The Dexim dock has its own battery, and comes with an AC adapter for charging it when it gets too low. It will also charge your iPhone or iPod when the device is in the dock.

You can control your iPhone or iPod by using their controls (even when in the dock) or by using Dexim’s remote — which is convenient, but a bit limiting. The remote’s buttons didn’t always work as I expected, largely because while the round wheel on the remote looks like the touch-sensitive controls on the front of my iPod Nano, the remote itself is not touch-sensitive. And pressing the wheel up or down controls the volume, rather than letting you navigate through menus. Instead, you have to resort to using up-and-down arrows on the remote to navigate, which seems counterintuitive.

Once you start playing a song, a video, or even a YouTube video on your phone, the content automatically displays on your TV screen. In my tests, most video looked very good, though some content looked slightly washed out. My iPhone and iPod don’t hold any true HD content, but the videos I played back looked sharp — much more so than standard-def content viewed on the same TV. Video automatically reformatted for playback on my 16:9 TV, and the audio was loud and clear. The overall experience was far more enjoyable than watching video on the small screen of an iPod or an iPhone.

I didn’t have the same luck with the AV Dock Station’s audio playback, though. Many times, I was simply unable to get it to play on my TV. I’d start a song on my iPod or iPhone, but my TV would display a message saying it wasn’t receiving a signal from the AV connection. Dexim said the problem was likely due to a faulty setting on my TV, which I was unable to fix. I was able to get the audio to play sporadically, but even when it was working, the audio quality left me underwhelmed — in large part due to the low quality of my TV speakers.

You can find similar products that will connect your iPod/iPhone to your TV. Griffin, for one, offers a $50 set of cables that will handle the job, though without the neat dock to keep you organized. Apple also offers a dock and a set of cables, but buying both products will cost you $100.

I like the Dexim dock’s affordable price. And while I’m not sold on the idea of playing my music through my TV, I still wish the AV Dock Station worked consistently as advertised. That would make me much more eager to recommend what seems to be a pretty cool product.


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Vid-Biz: Magnify, Tremor, Spinal Tap

Magnify.net Raises $500K; new funding comes from previous investors, brings total amount raised to less than $3 million. (paidContent)

Two Execs Leave Tremor Media; co-founder and Chief Operating Officer Andrew Reis and co-founder and Chief Strategy Officer Jesse Chenard depart the video ad network to pursue startup opportunities. (MediaPost)

Smell the Glove, Apple to Produce Original Spinal Tap Content; first original short film from iTunes reunites the aging mock rockers. (Tubefilter)

ESPN Bans its Workforce from Twittering Sports News; supposed internal memo from the network says “If ESPN.com opts not to post sports related social media content created by ESPN talent, you are not permitted to report, speculate, discuss or give any opinions on sports related topics or personalities on your personal platforms(.)” (CNET)

Study: Out of Home Video Reached 155 Million Americans Last Month; video displays in retail locations, grocery stores, gas stations and more are becoming ubiquitous. (MediaWeek)


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Vid-Biz: Schmidt, Netflix, YouTube

Eric Schmidt Resigns from Apple’s Board; move comes as the two companies increasingly compete head-to-head in multiple sectors. (GigaOM)

Report: Netflix Coming to iPhone/Touch and the Wii? Multichannel’s unnamed industry source says you’ll be able to watch on additional devices (though probably only over WiFi). (Multichannel News) Meanwhile, Netflix CEO Reed Hastings said there is no magic number that would trigger the company offering a streaming-only solution, and that the company is still focused on its hybrid strategy. (Video Business)

YouTube Gets Into Local News; video site wants to work with news outlets to deliver (and monetize) News Near You content, but local stations aren’t sure if hooking up with Google is really in their best interest. (The New York times)

Real-Time Animation Starting to Transform TV Production; the ability to create graphics and animation on the fly helps with visualization during green-screen shooting. (Variety)

WGA to Rep CBS New Media Writers; 15 news, promo and sports writers creating content for CBS in the LA area joing up with the scribe’s union. (The Hollywood Reporter)

Add Some Asparagus to Your YouTube Video; CollegeHumor gives you the secret codes to spice up any YouTube clip. (via Mashable)


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