Apple TV as an OTT heavyweight? Why not?

Jim O'NeillIs Apple finally ready to put the spurs to its lagging Apple TV? More importantly, can it become the over-the-top heavyweight Apple CEO Steve Jobs has always wanted it to be?

Apple TV has never lived up to its hype, and there are signs that the company is finally getting ready to update its interface--to iOS 4--and remake its hardware to bring it squarely into the race for dominance in the living room, setting up a head-to-head battle with Google and its Google TV for over-the-top delivery dominance.

The New York Times last week reported that some new Apple hires are doing advanced work on Apple TV outside the current Apple TV group, indicating a major overhaul, or a completely new product, is in the works. It also said newly hired designers and user-interface specialists who have joined the project come in with experience designing for the traditional broadcasting environment.

Whatever flavor Apple finally decides on, a revamped Apple TV needs to get to market quickly because the race for the living room is getting tighter, with Google TV set to launch, Netflix setting up as THE streaming game in town, Roku and Boxee claiming their own turf and Wal-mart--through its Vudu purchase--ready to roll out as well.

Of the current players, Apple has the strongest potential in terms of a user interface that consumers will migrate to and adopt. You don't need to look much further than iTunes to see a product that's become the pacesetter in the music industry. The fact that Jobs is the biggest Disney shareholder and that he has a seat on its board gives him an entrée to Hollywood that Google lacks, Netflix would die for and one that Apple will be able to exploit--possibly--in terms of negotiating favorable deals for new releases.

An interesting discussion came up at OTTCon East in Atlanta last month involving the steadily dropping cost of storage, to the point where storage devices with multi-terabyte capacity will become common and relatively cheap.

Is that a direction Apple might head; to an STB with a great interface and lots of storage? If so, it sets up for a premise Tom Kuehle, SVP for Strategic Solutions at Ascent Media mentioned to me a few weeks back.

What if, he asked, Apple simply streamed all the new releases you might be interested in, as well as all the newest TV episodes you express an interest in, to your Apple TV set-top box? One well designed interface and a user key to unlock the content and, viola, instant access.

What if, indeed. Game, set, match. -Jim

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