AppleTV could be the new cable
To me, AppleTV as it currently exists looks cool but I just can't get excited enough about it to actually spend money on it and hook up yet another box to my TV. You want me to spend money on a box so I can then spend more money to order PPV movies? I can do that with the cable box from Comcast. And I can stream my music from iTunes on my Mac to the living room stereo with my AirPort Express.
But imagine that the next version of AppleTV does everything that the current iteration does plus it has a dual HDTV tuner in it that decodes ATSC signals from antenna and a QAM tuner for digital cable signals. It would either have a CableCard slot or the new "Tru2Way/OCAP" technology to allow for the decryption of encrypted digital cable signals (which is pretty much all cable channels other than the broadcast networks). It would offer full HD DVR functionality with a beautiful Apple interface using a reliable FREE guide downloaded over the internet. You could record one show while watching another or watch two shows with picture-in-picture. Since it also provides access to movie/TV show downloads and rentals (with HD quality that beats most cable HD PPV/VOD), it would offer all the functionality of a cable box/DVR, plus integration with iTunes and iPhoto on your Mac/PC. It would also have some very slick features that integrate with the iPod and iPhone (although probably only Apple-supplied video, not DVR-recorded shows, could be transferred to an iPod or iPhone).
This could totally replace the cable box and would bring a lot more sales to the AppleTV. Sure, Apple might sell fewer TV shows via iTunes to the average AppleTV owner (since it would be easier to capture shows with DVR functionality), but that would be made up for by the fact that A LOT more people would have an AppleTV. Plus, they would have their AppleTV turned on every time they watched anything on TV. It would be THE portal for everything on the TV (live TV, recorded TV, downloaded content, PPV rental content, music, photos), making it more likely that an AppleTV owner actually USES it to purchase or rent content from Apple. I imagine that most of Apple's current video content business is for movies anyway, not TV shows. Apple's real competition there is the pay-per-view feature that most people already have in their cable box from Comcast/Time Warner/etc. If Apple could get a significant percent of those people to ditch that box in favor of an AppleTV, then they could sell a LOT more movie rentals.
An additional possibility is that Apple partners with TV content providers to offer monthly subscription plans. Perhaps for a certain amount per month you get to stream a certain number of hours of TV shows. Watching the same 30 minute show 4 times in a month would still only count as 30 minutes of your monthly allotment. Apple would let you watch the first 3 minutes of any show for free to see if you like it (and also to provide AppleTV users with a decent substitute for channel surfing, which probably constitutes a fair share of the time that guys spend in front of the tube). In effect, you could create your own cable channel, picking and choosing just the shows you like from various networks. If you're a cable TV subscriber, AppleTV would be smart enough to monitor what you watch each month (without reporting it back to Apple, of course) and, if it turns out that you watch fewer than a certain number of hours of cable TV, it could present a message telling you that you would have saved money by getting your cable TV content via an AppleTV video subscription. For folks (like me) who mainly watch stuff from the free broadcast networks, this would be a great solution. Stick up an antenna to get my locals in HD and cherry pick a few shows here and there from cable without having to pay Comcast $75 a month for DVR functionality and a whole bunch of narrow-interest content (hello, Oxygen) that I never watch, along with a few channels I do watch. Cable viewers have long wanted the ability to get just the stuff they want a la carte. This would give it to us. It's just a matter of getting content providers to play along.
A subscription plan option could also be introduced for movie rentals to better compete with Netflix/Blockbuster Online. Instead of spending $5 per movie, perhaps you spend $20 per month for 3 new/recent releases per month plus unlimited older films, all in 720p HD.
If Apple were to add a DVR to the AppleTV, it could help them grow a sizeable install base, gain major leverage with movie and TV studios, and possibly even replace cable and satellite companies as the next-gen internet-based video distribution system. Just as the iPod and the iTunes Music Store made Apple a major player in music content, the AppleTV and its ability to serve as a portal to paid video content could make Apple a major player in video. The trick is making AppleTV attractive enough to pay $200 to $300 for it in the first place. Making it a DVR with a free lifetime service should do the trick.
partners with Dish or DirectTV. Local station content would be too difficult to manage otherwise IMHO, and off-air HD reception is not a viable option for a vast portion of the population.
