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Apple TV: Third time unlucky, Mr Jobs

Going down for the last time

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All in all we are disappointed with the Apple announcement. There is no $30 all-you-can-eat subscription with prearranged TV channels. There are no new deals updating movie content, unless you count the cop-out deal it has done with Netflix, which actually heavily favors Netflix, allowing its service to be delivered to the Apple TV device (along with the other long list of devices which Netflix has in its locker).

This means that Apple is abdicating the role of directly licensing movies for streaming, and instead defaulting to Netflix, although clearly Apple is also trying to license some movies directly. This move would work if Apple later bought Netflix – which although not out of the question is highly unlikely given the Netflix promiscuity when it comes to devices, so don’t bet on it.

TV content and movies will be rented, including first-run movies which Apple has licensed directly, which will cost $5 each. Wait a minute - is that any cheaper than pay per view on cable? Of course not. It’s effectively the same outlet at the same stage. And what about Hulu? Surely this has a price advantage with a $10 a month deal for Hulu Plus? Yes but no movies, mostly TV programs.

The old Apple TV already streams content from YouTube, Flickr and MobileMe, as well as music, photos and videos from PCs and Macs. The new Apple TV has built-in HDMI, WiFi, Ethernet and offers low power operation in an enclosure that’s less than four inches square, 80 per cent smaller than the previous generation. But only an exciting service will sell it whether that’s at $250 per box or $100. Sure, more will take this than before, but it is not another iPad.

This move may double Apple TV sales, but that’s not a large number, and there is no real imperative to buy from Apple since other services, targeting other devices are selling the same content at the same prices.

“The new Apple TV, paired with the largest selection of online HD movie and TV show rentals, lets users watch Hollywood content on their HD TV whenever they want,” said Steve Jobs, Apple’s CEO. “This tiny, silent box costing just $99 lets users watch thousands of HD movies and TV shows, and makes all of their music, photos and videos effortlessly available on their home entertainment system.”

The deal hasn’t changed since the early days of online movies (remember Movielink) and on downloaded or streamed content you are allowed up to 30 days to start watching and then 48 hours to finish watching or watch multiple times – it used to be 24 hours of viewing before so we’ve made some progress.

Apple says that it has 7,000 movies to rent with over 3,400 available in HD, which compared to those available through the Netflix service is not that impressive. Most new releases are made available the same day they are released on DVD. But they are under the Netflix deal as well, Apple has done little here and controlled almost nothing.

The thing is that the 15 million Netflix subscribers are now a dominant force in the US, and Apple feels it has to fit in with it, rather than compete at least for the time being. Amazon on the other hand intends to continue with its Unboxed video but simply add TV shows At $0.99 – also a combination of the two approaches, but it has both sets of content relationships – movies and TV shows, whereas Apple only has some of the movie relationships direct, nowhere near as many as Netflix, hence the very non-Apple like move of signing up to support the Netflix service.

Users will be able to control Apple TV with their iPhone, iPad or iPod touch using the Remote app, available as a free download on the App Store. Once there is an OS refresh in November that should enable streams to be sampled or borrowed by passing portable devices, only from Apple. That’s about the only thing which shows any of the traditional Apple lock-in.

iTunes movies rentals will be available in the US, Australia, Canada, France, Germany, Ireland, New Zealand and the UK and the $0.99 TV rentals are only available in the US.

We have to be careful here. What this deal means is that content which can be viewed for nothing on TV, can be bought. And a 22 episode TV series will cost you more than the DVD, if you buy it one online rental at a time, a total of $22. And at the end of that you can’t watch it again, as you could with a DVD.

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