TV battle heats up

23 December 2010

CUPERTINO, California: Apple, the electronics giant, predicts sales of its TV set-top box will soon pass 1m units, but the battle for the future of television remains at an early stage.

Having launched Apple TV in September, the company forecast purchases would hit seven figures this week, with users now renting and buying over 400,000 shows and 150,000 films each day via iTunes.

Customers can access content hosted by Netflix, YouTube, Flickr and MobileMe, alongside streaming material from the iPad, iPod and iPhone via the AirPlay system.

"I think that it's a great product and I think its $99 price point is very enticing," Steve Jobs, Apple's ceo, said on a recent conference call.

"And I think when we get the AirPlay stuff in place before the end of this year, it's going to give another big reason for people to buy it. So we're really happy with how it's turned out."

Google TV, a rival service, has attracted hardware partners like Toshiba, LG and Sharp - though these firms have been asked to postpone unveiling devices during the forthcoming Las Vegas Consumer Electronics show.

Samsung could still reveal its Google TV appliance at the event, while Vizio is reportedly due to hold private previews at a later date.

Broadcasters NBC, CBS and ABC, and website Hulu - run by Disney and News Corp - have not permitted Google TV to stream full programmes, restricting viewers to paid-for options like Netflix or Amazon.

Sony began selling this product, developed in conjunction with Google and Intel, in October.

Hiroshi Yoshioka, head of Sony's TV operations, suggested sales have proved "in line with expectations".

"Some reviews have been good, some have been bad," he added. "It might take a little longer for users to really start having fun."

TiVo has come under pressure from new entrants like Apple and Google, but as its Premiere Box combines linear content, video-on-demand and online material, the company is in positive mood.

Indeed, Tom Rogers, TiVo's ceo, stated Apple and Google's platforms were currently somewhat limited.

"They claim to have the answer to bringing internet content to the television ... They only address a small component of the future television experience," he said.

Elsewhere, Time Warner has displayed reticence about committing to these new providers, and ceo Jeff Bewkes argued many digital innovations are "really not in the interest of the studio".

"We absolutely evaluate everything from Apple TV rentals, when that came forward, to sales and licensing agreements with firms like Netflix or Hulu," he said.

"We've actually found an alliance calculation between what's best for Warner and what, let's say, would be best for HBO and Turner in the long-term industry structure. So we haven't seen anything that can flip in that."

Earlier this year, Comcast introduced Xfinity TV, a VOD service which is free to its television subscribers, and offers 150,000 shows and movies.

"I think for Xfinity TV and 'TV Everywhere', we are at the beginning of that, in my opinion, not anywhere near the end," said ceo Brian Roberts.

Roberts believes tablets will play a key role, particularly as prices fall, and the popularity of such gadgets, and ultimately cloud computing, may render set-top boxes superfluous.

"Where you would like to get to is have a architecture and a capability that any piece of content could be accessed by the consumer on any device at any time," he added.

"Then its up to the content rights holder to determine whether they want to sell it at all, at that moment, in different windows."

Data sourced from Apple, New York Times, Morningstar, Seeking Alpha; additional content by Warc staff