AppleTV 2.0 – too little, too late?

Up until two days ago, I was coveting the AppleTV, especially after the new upgrade and features they recently added, but thrift and frugality has prevented that particular splurge… again, up until two days ago.

Well, I bit the bullet, I got one, and I’m impressed. A couple of quick thoughts…

I am not a big TV watcher, spending most of my time in front of either my work or my home computer. Like many others I have started to watch a lot of video content in that context (mostly at home). Up till recently I watched mostly podcasts, but now, with all the big four TV networks offering streaming video (I caught up with almost a full season of Lost watching ABC’s streaming HD feed), I am watching shows on my computer I already have on my DVR while I work. I’m not too lazy to get up and walk the fifteen feet to my media room, it’s just much more convenient and efficient.

So, what does this have to do with AppleTv? Well, everything.

Apple is still trying to leverage what I think is a dead content model, by selling episodes of TV shows for $2 and rentals for $4. When you have better quality video streaming for free (ad supported, of course) with ubiquitous access (any computer with sufficient processing power and a high-speed connection will do), with Netflix offering numerous pricing and rental models to support differing viewing habits, and with cable and satellite providers undercutting each other by giving away free DVRs and receivers, why spend $230 for the privilege of paying to watch TV or movies?

Now, don’t get me wrong, I LOVE my AppleTv, even though the UI is somewhat counter-intuitive (I may post on that later). But I think the real value of the unit to me and a lot of others is the ability to stream content from my computer. I marvel at how good video looks from DVDs I have ripped to my Mac hard drive (for archival purpose, of course). The video quality of most youtube videos I’m watching on the AppleTV is also quite surprising, with several looking better than some of my DirecTV channels.

BUT I think AppleTV is a solution looking for a problem, and the solution primarily involves exploiting impulse buyers to boost Apple’s bottom line (and yes, having that easy-to-use “Rent” button is very tempting, and that movie will get here a lot faster than Netflix).

What can Apple do to make this a must-have device? What they have avoided for years… a monthly all-you-can watch rental service as part of .mac. I’d pay $20-30 for such a service… and if they could get enough content as part of the package, I might even cancel my Netlix account.

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