Apple TV: Game over or will there be a Take 3?

Posted by Christian Zibreg

Cupertino (CA) - Apple once called its Apple TV "the DVD player for the 21st century". But when the reality distortion disappeared it was clear that consumers were not impressed. Even the biggest Apple aficionados didn't get it. What was the point of putting a "TV" in the name of a device that only streams music, photos and movie files from your computer to the TV? The Take 2 software update Apple focused on movie rentals and that fact alone seems to have put competitors on alert: Netflix said that it will launch its own set-top box and today we learned that Blockbuster is likely to do the same. Is it game over for Apple TV or will there be a Take 3 for the device?

According to the Hollywood Reporter, Blockbuster will announce its set-top box later this month. Reuters reports that "the device is believed to be a stand-alone product akin to Apple TV as opposed to embedding a Blockbuster-branded service in such existing devices as Microsoft's Xbox 360 or TiVo." Reuters said that the product will leverage the content from online video renting service Movielink, which Blockbuster acquired last year for $6.6 million.

Blockbuster's rival Netflix announced in January that it will develop its own set-top box in collaboration with LG Electronics. Netflix' box is expected deliver movies to Microsoft's Xbox as well.

Both Blockbuster and Netflix enter an already crowded market that has not seen huge successes so far. Apple is there with Apple TV, Microsoft has the Xbox360, Sony is expected to announce movie rentals through its PlayStation Network on PS3 and let's not forget Vudu and TiVo.

We will have to see how these two new products will look like, but the more interesting question if Apple will answer and how it will answer. Until now, Apple TV has not yet delivered the features that consumers would want in such a set-top box. There is a good chance that limited movie rentals are a key reason why the device’s appeal is rather limited today. The Take 2 software update for Apple TV brought movie rentals, but the selection is poor. There are just about 1000 titles to choose from and many of them are older titles.

So far, Apple has yet to prove that the Apple TV can be the "DVD player for the 21st century". But we believe that the device needs to offer thousands and thousands of titles to match what's out there on DVDs, movie rental prices have to go down and the 24-hour viewing window has to be increased to 48-hours. As easy as that seems, only the studio guys have the power to make that happen. But if Apple is serious about the Apple TV, there’s now some urgency: Netflix and Blockbuster could simply be working on what the Apple TV should have been in the first place.