Apple's plans for your living room: On Apple TV, "iTV", Siri, and all the rest

The "iTV" rumourmill -- speculation that Apple will be releasing a full-size television, screen and all -- is back to full speed again. I've long been skeptical about this possibility, but even I have to concede that we reached the "no smoke without fire" level some time ago. The rumours are too numerous and too persistent to not have some sort of substance to them.

Nevertheless, there's a few aspects of the most frequently repeated speculation that don't make sense to me; I'll explain which ones, and why, below. Want to add your own voice to the discussion? Jump into our comments section!

The future of video distribution

The big-picture issue that drives many of the rumours is the coming battle over how we, the viewers, will receive and pay for television content.

On the one hand, we have the status quo: "conventional" broadcast and subscription TV (over the air, cable, digital terrestrial or satellite). Pay TV income today is about $300 billion world-wide, with about $100 billion of that in the USA alone; that's a roughly equal split between advertising and subscription fees.

It's a highly incestuous market, in which content producers and content delivery firms are often owned by the same parent companies or bound to each other in complex webs of cross-licensing deals. However, cable TV firms acknowledge the tough times ahead as their business models are placed under threat by the wave of Internet based streaming. Still, though, no one's going to be keen to place the current huge incomes under any threat without some clear payoffs to a new business model.

And then there's the other hand. There's a common view that existing services like iTunes, Netflix, Hulu and other "over-the-top content" streams are glimpses of the future. A future where people pay for the individual shows or episodes they want and watch it whenever they choose, rather than being restricted by channel packages and schedules. If that's to be the future, though, there's massive uncertainty over how the giant media companies can get from here to there without going broke in the process. Smoothing over the disruption of a $300 billion industry isn't easy. Making turkeys vote for Christmas is even harder.

Will Apple be part of the efforts to push this change through, or will the Apple TV remain a "hobby"?

Apple TV vs "iTV"

Much of the recent speculation has focused on Apple's alleged plans to expand its existing Apple TV set-top box into a full blown screen-and-all television. I'm going to call this mythical device "iTV" here, for clarity, although I doubt it would ever ship with that name because that might cause confusion with UK broadcaster ITV.

I must confess, the idea of the iTV doesn't make much sense to me.

First, the big downside as I see it: Apple TV is, famously, barely more than a "hobby" for Apple because of low sales -- but a $1000+ premium HDTV is necessarily going to be a far harder sell than a $99 add-on. Plus, people simply don't change their living room TVs as often as they change most other gadgets in their life.

What are the potential upsides, though? Firstly, remember that most of the (slightly breathless) benefits that are being attributed to the iTV -- cord-cutting, disrupting existing pay TV business models, iTunes streaming, and so forth -- are just as applicable to the Apple TV as the iTV. Hence these are not reasons for Apple to create an iTV. It could tick all those boxes with some new Apple TV software or a new hardware version. The list of unique-to-iTV features is non-zero but makes for a far less compelling product.

Second, cabling. It's true that wiring in a TV isn't simple at all -- in fact it's one of those complicated areas of tech that Apple seems to delight in turning upside-down. However, I have reservations about Apple's ability to revolutionise here because people (I contend) expect to be able to plug all sorts of stuff into their TVs. Can you imagine a successful iTV that shipped without multiple inputs for component, HDMI, composite, and so forth? A TV which didn't allow the addition of a games console or a DVR or (shudder) a VHS player for the (double shudder) family's home movie collection? But if a TV has all those ports, how can it be any simpler to set up or use than existing ones?

Second, UI. I've used a few brands of HDTV and it's probably fair to say the on-screen displays are often workmanlike at best. Apple could bring some slick polish to this area. But... how often do you use these screens? Personally, I tweak the brightness levels on my TV a few times a week to account for changes in the ambient light level. That's about it. I don't think most consumers use these interfaces often enough to muster any wallet-opening enthusiasm about what they look like.

Third, AirPlay. Something that happens quite a lot in our household is for one of us to be viewing content, on a Mac or an iOS device, and want to share that with other people in the room. The ability to seamlessly shunt videos, pictures, and audio onto a television via AirPlay is extremely useful for this (although the lack of baked-in AirPlay support in OS X is a puzzle). However, it relies on the television already being on the right HDMI input. It would be more useful still if the AirPlay client was built into the TV itself so you could use it regardless of what was currently showing, or even if the TV was in standby. This is why we suggested that the Apple TV is a compelling accessory for the iPhone and iPad.

Does all of this add up to a solid set of reasons to junk an existing HDTV and buy an Apple iTV? I'd say not -- not for most people, anyway. The benefits are just too slim. Apple might find it an easier sell to target people who don't yet have an HDTV, but that by definition will be the less affluent and least tech-focused consumers; that's not a great market segment to pitch a premium device at. Apple could negate some of the disadvantages if it launched a cut-price device, but with margins generally pretty thin in the mainstream HDTV market it'd be left not making any money -- in which case, why bother?

Another minor point to finish off with: having watched someone wrestle a 27" iMac out of an Apple Store and across a 10 minute walk to his car recently, I'm not convinced Apple retail stores are really set up for such large-box purchases. Yet retail is such a significant part of Apple's success story that it's hard to imagine it being sidelined for iTV sales.

However, I could be wrong; Apple's a lot smarter than I am, so maybe it's found a compelling angle I've overlooked. Or perhaps the rumours are half-right, and Apple is going to revolutionize the world of video distribution -- but via the Apple TV, rather than an iTV. What forms might that revolution take?

The UI challenge

If over-the-top is to be the future of TV, there is a significant challenge coming regarding how that content is organised and presented to the user. Existing "browse" type UIs, whether the genre-based structure of iTunes or Netflix or the channel-centric nature of a traditional pay TV set-top box, don't really scale well to having hundreds of thousands of titles for a user to choose from. I'm also dubious about any "search" type UIs that rely on the user hunting-and-pecking an on-screen QWERTY keyboard via a remote control with an up/down/left/right block. It simply feels ungainly and awkward to me. Steve Jobs famously said he "cracked it"; do we really think he could be talking about something so kludgy?

One possible answer is to rely more heavily on personalised recommendations, rather like Amazon or TiVo. Indeed, I wouldn't be surprised to see this become an area Apple looks to innovate in -- perhaps by acquiring a startup, as they did for Siri. But no amount of recommendation smarts can hope to ever fully replace the search box, which will always require the user to somehow enter free-form text.

The Boxee Box solves this problem with a two-sided remote; the upper surface resembles the sparse Apple remote, with just seven buttons: up/down/left/right, select, play/pause, and menu. The flip side has a micro-sized QWERTY keyboard. It's alright, but the keyboard is tricky to type on and isn't backlit, presumably for battery life reasons. It's consequently very difficult to enter text in a dim home theatre room.

So how can Apple drive this forward, then?

The iPhone as a controller

Many people believe that iOS devices will be the answer. As they are blank slates for software to project a flexible and changing UI upon, the reasoning goes that they are perfect for this. They can display a five-way pad for basic UI navigation, transport controls during playback, and switch to an on-screen keyboard when that's a better choice. The existing Remote app for the iPad/iPhone that works with the Apple TV is a good example of this context-sensitive control.

This solution isn't without its charms, but I have some reservations. For one, there are households with more people than iOS devices -- particularly those with young children. If your son or daughter wants to watch cartoons, are you really going to hand over your iPhone so they can turn the TV on? Are you going to be happy to buy a $300 iPod touch to go with your $99 Apple TV?

Secondly, there's a growing demand these days for so-called "two screen viewing"; the TV showing a movie or program, viewers each with a smartphone in hand or computer in lap -- perhaps checking Facebook during ad breaks, or doing quick IMDb lookups to answer "who's that guy?" queries (I must confess, I do this a lot). Some broadcasters are starting to pick up on this and launch companion apps, such as the deal between Sky TV and zeebox; sporting leagues like the NBA or MLB in the States already produce such 'sideview' apps, and third parties like Yahoo's intoNow have similar capabilities.

iOS devices, of course, don't have deep multitasking. Are you going to be satisfied with having to switch away from your Twitter app halfway through writing a tweet so you can channel hop, mute an annoying advert, or -- even worse -- pause playback when the doorbell rings?

Also, you can't use an iOS device as a remote control without looking at it, because it's a flat sheet of undifferentiated glass. If you don't think that's a problem, next time you watch TV for an hour, make a point of always looking directly at the remote before every single button press. It sounds minor but it's surprisingly annoying.

Moreover, if you watch movies in a darkened room then your iPhone will default to eye-searing brightness levels. It's long annoyed me that the "adjust brightness automatically" setting doesn't go far enough in either direction.

For this reasons, whilst I accept that an iOS device can be a useful ancillary controller for a home audio-visual setup, I don't think it can be a compelling primary controller.

Siri

Much fuss has been made about the possibilities of using Apple's Siri voice-recognition technology for TV control, both for and against. I see upsides and downsides.

There's no doubt that voice recognition could be compelling for the "I want to watch the latest episode of Breaking Bad" use case -- in other words when you turn the television on knowing exactly what you want to do. It also appears that Siri's recognition engine is easily sophisticated enough to cope. Microsoft's Kinect for Xbox already supports this sort of thing, and is reasonably successful at it.

As with the iOS-device-as-controller scenario, however, there are some ways in which Siri would be a step back from a traditional remote control. Again, next time you watch TV, try speaking each command aloud as you press the button. "HDMI one... Volume up... Volume up... Volume up... Channel down..." It feels ridiculous and clumsy.

There is one use case I see where voice control is superior -- "pause playback so I can deal with this emergency." If the dog just knocked your New Yorker all over your cream carpet, not having to fumble for the remote whilst also running for a towel and shouting at the hound is useful. Apart from this, though, I simply don't think Siri for routine television UI navigation is compelling.

There are physical downsides also. Kinect's voice control only works because it has a good quality directional microphone built in to the sensor bar, which is always placed near to the screen. Siri, of course, is on a device you naturally speak in to and hold at close range. Building a pickup into the body of an Apple TV might not work very well, as people often tuck them into AV racks where the sound would be muffled. Having a small microphone on a wire would be ugly, and requiring the user to talk into an iOS device would incur the disadvantages covered in the previous section. An iTV could solve this problem, of course, by integrating the microphone into the housing of the device.

Overall, although I could see a place for Siri, and although it seems to attract a lot of attention from bloggers, I'm not sure it's the most interesting part of the puzzle. I think the really juicy stuff is: what would we watch on an iTV?

Content sources

Along with the user experience difficulties, Apple faces commercial ones if it is to push iTunes streaming as a mainstream alternative to (as opposed to supplement to) existing pay TV solutions like cable and satellite. Namely, content.

So far, the Apple TV has been a slightly odd halfway house. The primary focus of the device is undoubtably iTunes content, but iTunes doesn't have everything. There's some limited concessions in the form of baked-into-the-OS apps for Netflix and NHL/NBA/NFL streaming, as well as some Internet services like Youtube, Vimeo, and Flickr. Compared to the wide variety of streaming services out there, though, this is just a drop in the ocean.

The big question here is whether or not Apple will open Apple TV up with an App Store for streaming content. On the one hand, it seems to make perfect sense. It seems unlikely that, going forward, we are going to have one source to rule them all for over-the-top content. Most content producers and distributers are keener on controlling at least some of the customer relationship via their own apps. So we have current episodes on dedicated apps like HBO Go, the BBC's iPlayer, or Hulu whilst older archival content appears on Netflix or Amazon Video.

If the content players won't simply put everything they have into iTunes (perhaps because they are afraid of giving Apple too much control), why not allow them to ship their own apps for the Apple TV? This approach seems to be working OK for other iOS devices. Apple could mandate in-app payments and take a cut from them, exactly as it does on the mainstream App Store, so it'd make some money too.

If Apple wanted to do this, though, I think it already would have done. The Apple TV is five years old and it's been an iOS device for almost 18 months now. So why might it not want to open the platform up? One explanation I can think of is that it doesn't want the user experience to be fragmented.

Consider the Boxee Box. Boxee does a reasonable job of aggregating content across many of its sources; so, for example, if I do a search for Memento I might see a single result that offers me multiple ways to watch the film: a premium streaming service like Vudu, perhaps a free ad-supported service, and the DVD ISO stored on my file server (I love that film). But, crucially, Netflix content is not aggregated outside the interface of Boxee's dedicated Netflix app, so it doesn't appear in search results. Similarly, even though Vudu content is reachable from the generic Boxee UI, the actual Vudu app has a nicer experience that does a better job of highlighting new releases and sale titles.

I suspect, eventually, Apple will buckle and we'll get an App Store for the Apple TV. I certainly hope so, at least. It'd be a much more useful device.

I don't think that shipping apps for iOS and using AirPlay to stream them to an Apple TV is a really convincing answer to this problem, either. Many of the disadvantages listed under "the iPhone as a controller" apply to this model, plus battery life becomes an issue from the constant Wifi streaming. Do you really want to have to routinely put your phone on charge before you can settle down to watch a movie?

There's also little clarity about the fundamental business model. So far, we have iTunes, Vudu, and the link with the pay-per-episode model, bolstered with season passes, while Netflix, Hulu and others have a monthly-fee, watch-all-you-want model. The latter model might be more comfortable to consumers as its basically how pay TV works today.

There are rumours going back to 2009 that Apple is seeking to adopt a subscription plan. However, Reuters reported recently that Microsoft scrapped its online TV subscription business before launch because it couldn't agree a price with content providers that matched the price it felt it could charge consumers for the service. There's certainly a large discrepancy between the costs most people will pay for a monthly cable subscription and the cost of a Netflix or Hulu Plus account, for example. Dan Frommer speculates that unless the large content companies agree to simply make a lot less money than they do at the moment -- and why would they? -- this is going to be a huge roadblock to subscription-based service offering fresh content.

International iTunes

As a native of Britain, I am painfully aware that iTunes video content outside the US is drastically truncated -- an issue that sometimes doesn't receive the attention it deserves from the often US-centric tech blogs. Even worse, Netflix only works in the US, Canada and UK. TV shows are only available in six countries, and even movie rentals are only available in 50. By comparison, the iPhone is available in more than 120 countries. The bottom line is, the Apple TV isn't anywhere near as attractive a device around the world as it is in the US.

If Apple is going to fulfill the grandiose dreams many people have for it to revolutionise video distribution, it's going to have to get to the bottom of this somehow. I don't mean to gloss over the stupendously complex world of international distribution rights for TV shows and movies, but for it to still be so poor five years after the product launched suggests Apple isn't giving this matter top priority. That won't do at all. There's a lot of world outside America's borders.

Wrapping up

I think what the future holds is cloudy and far less obvious than many people are painting it. Yes, the sheer volume and persistence of the rumours surrounding Apple's ambitions in the TV market make it likely that something is coming... but from where I'm sitting, it doesn't look clear-cut that Apple are going to change the world again, either.

To finish up, I'd like to return to the famous quote given to Walter Isaacson by Steve Jobs; that Apple had "cracked it" regarding the future of TV. Less attention has been paid to this followup statement by Isaccson in an interview with CNet (thanks to Yoni Heisler for pointing this out to me):

Q: How far along were they on the TV? Did you get any indication of that when talking to Jobs?

A: They weren't close at all. He told me it was very theoretical. These were theoretical things they were thinking about in the future.