New Apple TV Is Cheaper, Relies on Rental Strategy
Apple CEO Steve Jobs ended a music-themed press conference today with the announcement that Apple TV had been redesigned, marked down to $99 and given a new distribution model for movies and TV shows.
The Apple TV got the famous "one more thing" treatment from Jobs after he was done announcing changes in iPods and iTunes.
"So, iOS, iPods, iTunes... not bad for one day. But we've got one more thing. Actually it's one more hobby. Of course I'm talking about Apple TV," Jobs said.
Jobs acknowledged that the Apple TV hadn’t sold well since it was introduced in 2006, but then explained it was because manufacturers and content makers misunderstood the market.
"[Users] want Hollywood movies and TV shows whenever they want," he said. "They want HD — everyone wants HD. They want to pay lower prices for content. They don't want a computer on their TV. They don't want to manage storage. They don't want to think about it; they just want to watch movies and TV shows."
The new Apple TV is intended to fix those complaints by simply making the Apple TV a conduit for content. It does not store anything; it simply allows users to stream content from Apple or from their own computers.
Because of the streaming model , the Apple TV works exclusively with rentals. Users cannot purchase a movie or TV show, they can only rent it and stream it over the Internet. Once a user rents a TV show, they have 30 days to start watching it and 48 hours to finish it once they do.
"It's all rentals and you don't store anything on it; you just rent them," Jobs said. "You stream content from your computer if you want to. There's no syncing required."
So far, only ABC and Fox have decided to offer content through Apple TV, but the catalog of hit shows seems to be pretty complete from both networks.
Apple has struck deals with content makers to make movie rentals $4.99 for new releases, $3.99 for library titles and only $0.99 for TV show rentals , down from the previous $2.99 it took to rent a TV episode from iTunes. Jobs said all videos would be commercial free, and movies would be available to rent as soon as they come out on DVD.
The new Apple TV has Wi-Fi and can pull content directly from many popular sites; that includes YouTube and Flickr. For those who want more than just ABC and Fox shows, they will be delighted to learn that Apple TV also integrates with Netflix's streaming service. Put together, it makes for quite an array of content for the Apple TV.
Another interesting feature is called AirPlay, but it will only be useful to those who have iPads. It allows an iPad to connect to an Apple TV device and push whatever content is playing on the iPad to the TV. So if someone is watching a movie on the iPad and others want to watch, it can be shunted immediately up to the TV.
Perhaps the biggest surprise with the Apple TV is the price. Previous models cost $229, but Jobs acknowledged such a price prevented many people from making the leap to Apple TV. So the company has marked the latest model down to $99.
As for specs, the Apple TV runs on the same A4 processor as the iPhone 4 and new iPod Touch and connects via Wi-Fi. It includes ports for HDMI, USB, Optical Audio and Ethernet. It's noticeably smaller, about one quarter of the size of the previous model, and matte black. Jobs referred to it as a "hockey puck." It also comes with an aluminum remote.
Apple TV will be available in four weeks, but pre-orders start today.