People like having their huge HD TVs with over 250 channels to chose from an any moment.

tv essentially destroy that.
Speak for yourself. I have an HDTV and I want a-la carte programming more than anything else right now. Do you have any idea what a pain in the ass it is to spend $90 a month just to get a handful of HDTV channels?
The cable/dish companies tier their programming so in order to get the 10 or so HDTV channels available they require you to sign up for basic, extended and digital first... bringing you around to $80-90 a month just so you can have the few channels of HD content you really want to watch.
Even if you're a family of five and you have three TV's let's say... you still can't watch 200 channels all at once... So you're paying for tons of channels that at any given time are completely useless to you. Given the crap programming that's out there, frankly, most of them are useless when you're watching them anyway! Nevermind commercial interruptions...
Sure, that $80-90 seems like a steal when you break it out over the number of channels you get, but again that's a false way of calculating your return. Instead, divide that $80-90 by the minutes of programming you actually watch in a month. Then subtract from that value the programs you don't watch completely... channel surfing 60 different programs in an hour cannot be worth 60, or even 30 whole programs. i.e. You wouldn't pay the same for one random minute of sixty different hour-long programs as you'd pay for one sixty minute program, would you?
Now also subtract the total number of minutes of commercial interruptions... You almost forgot this one didn't you? Easy to forget but even if you're not watching commercials intently, you're being robbed of your time while you wait for the program to resume or surf until you hit another program in progress. The value of the commercials is partly what subsidizes the cost of 200 plus channels of crap. So why shouldn't it be subtracted from your net gain or added to the actual valuation of the monthly cost to you for this service?
What I want is a-la carte programming... so I can buy the few shows I really want to watch, and watch them whenever I feel like it... rather than surfing through 200 channels of garbage until something interesting comes on.
Recent consumer surveys show that the public wants this more than just about any other type of media service. Analysts also expect to see the video download business to grow from the current $111 million market it is today to $400 million in 2007 and $4 BILLION by 2011. Did you catch that? 1000 percent growth in five years... or an average 200% per year!
AppleTV is expected to be a key contributor to this growth in the same way that iPod has skyrocketed music download purchases.
I've said it before and I'll say it again: One great choice is better than many mediocre choices. Being able to pick the few programs I want is better than being forced to pay for a stream of hundreds if not thousands of programs I don't want, don't need and don't watch.
Most consumers agree with this and their purchasing habits don't yet reflect it because viable, easy-to-use systems for internet distribution and content streaming direct to your TV are only now emerging. There are many hacky alternatives to get a-la carte programming today but most of them introduce more complications than they eliminate.
AppleTV is one huge step toward fixing this and making the browsing, purchasing, delivery and exhibition of the internet-based model FAR more convenient than conventional cable and satellite TV.
The most critical component to the success of this distribution model is the successful, uncluttered, EASY bridging of the computer/network with the television with a user interface that's more convenient than existing menuing systems for DVR's and media center type configurations.
This is why AppleTV is the "killer app" of 2007.