Jobs’ Next Target: Your TV

Sep 18, 2006  •  Post A Comment

Apple CEO Steve Jobs took a step last week to lure television viewers back to the same living room sets he freed them from when he introduced the video iPod last year.

At an Apple press event in San Francisco, Mr. Jobs previewed iTV, a device that wirelessly routes TV shows, movies and music from a computer to a TV set. The unit will sell for $299 when it is released next year.

Apple has been expected to make a play in the home entertainment space for some time (TelevisionWeek, Dec. 12, 2005). With his announcement, Mr. Jobs joined a long line of technology and media executives who have tried to link the Internet to the television. Even TiVo is getting into the act. In June, TiVo introduced its TiVoCast service to bring Web video to the TV set. The success of that service remains to be seen.

The possibilities of the Internet-television play are vast, because they offer viewers an additional opportunity to watch network programs and movies on their own schedule on the television set.

At stake for networks and TV studios is the opportunity to create a bigger audience for their shows because most consumers still prefer to watch TV programming on a TV set.

ITV, however, is unlikely to revolutionize TV viewing the way the iPod did, which set off seismic changes in the television industry. That’s partly because iTV for now is simply another iTunes screen-in addition to the computer or the iPod-because the device will play only content accessed via iTunes, rather than all Internet video. Apple declined to say whether it might add features to deliver additional online video to the TV.

The convergence nirvana between the TV and the PC so far has eluded device makers and the TV industry, and some analysts question whether the effort is worth it.

“Some of the greatest minds in engineering and computer science have been trying to bridge the so-called gap between the TV in the living room and the PC and it hasn’t been done yet,” said Todd Chanko, media analyst with Jupiter Research.

Consumers haven’t demonstrated much desire to watch the Internet on the TV. Plus, most consumers don’t want to hook up another device to their television or wait for a video to download before watching it on their TV, Mr. Chanko said. Microsoft’s home entertainment PC that enables TV/PC convergence hasn’t been a huge hit, its previous Web TV efforts failed, and Intel’s Viiv technology, which is used to deliver digital entertainment to laptops, PCs, handheld devices and the TV itself, hasn’t taken off. There’s also Akimbo, a set-top box and service that delivers niche content via broadband to the TV but isn’t widely used.

Apple is aiming to succeed where others have fallen short.

If anyone can do it, Apple can, said Kaan Yigit, analyst with Solutions Research Group.

“Nobody else has an ecosystem-device, service, content combination- of the kind Apple has plus the market share. I’m not counting out Microsoft, but Apple has the lead right now,” he said. “ITV is the early broadband version of what will eventually be replacing the digital cable or satellite box or your TiVo.”

Issues with ease of use have led other convergent devices to struggle to this point, said Bob Greene, executive VP for advanced services at Starz Entertainment.

“The key is getting the device attached to the TV set,” he said. “The question is do most people have the ability to do that? Do they have the space or the technical wherewithal?”

Previous efforts also didn’t catch on because of timing. But within the last year, TV networks and movie studios have made top-tier content available online, and that will spur demand for a convergence device, Mr. Greene said. Starz has found that 30 percent of users for its Vongo movie download service attach their PCs to a TV set.

Apple declined to comment in more detail on iTV.

“We showed it [Sept. 12] as a `sneak peek’ and will not be discussing more details until we introduce it next year,” said Apple spokeswoman Lynn Fox.

Networks will likely respond with counter moves of their own, said Charles Rothstein, senior managing director of Beringea, a global venture capital firm investing in new media and entertainment.

“With iTV, Apple could finally represent real competition for cable operators and broadcasters as the `living room’ video distributor,” he said. “The networks are no couch potatoes-they’ll fight hard to keep control of the remote control.”