Nick Carr recently posted an article entitled Google, Apple and the future of personal computing in which he speculates about what possible offspring might be produced by Apple and Google’s partnership.

I have no doubts that Apple is working very closely with Google, but their partnership will never produce the product that Nick is describing… Ad-supported applications are not something Apple does. And everything else Nick described sounds awfully like an Apple TV.

Speaking of which, I’m expecting Apple to announce some significant updates to their Apple TV (in the form of downloadable/streamable video content, directly from the unit).

Now that Apple’s released their iTunes Wifi Music Store for the iPhone/Touch, it’s only a matter of time before they reveal a similar store interface for the AppleTV (we’ll call it the iTunes WiFi Video Store). There is also evidence of movie rentals in the works as well.

This is going to require a great deal of bandwidth, and I’m pretty sure Google will be providing the backbone for all of this. My guess is that Google will take a cut of the video purchases, all while continuing to absorb to the consumption data as well. It also wouldn’t surprise me if Google began inserting commercials into the YouTube feeds for a little extra gravy.

Food for thought – Google hasn’t been porting YouTube videos over to the h.264 codec simply to help Apple show off the iPhone.

In my opinion, Apple is looking to disrupt the existing cable television market with an internet-based video distribution system, and the Apple TV will be the primary consumer interface. TV and movie content will be purchasable on the Apple TV directly from the iTunes store, and YouTube will replace the mindless “channel surfing” that is lost when you’re faced with an on-demand viewing experience.

Even the name Apple gave the device is very telling when you think about it. Eventually, it won’t be referred to as AN Apple TV – it’ll simply become “Apple TV”.

“All of your favorite TV shows, movies, YouTube clips and music videos – all available on Apple TV.”

(Article via Mark Ury via Facebook)

So NBC tells Apple to stick it. Apple says good luck with that. And now NBC is going it alone. Didn’t anyone pay attention when the music labels attempted to do this with their highly-restrictive, DRM-plagued, over-priced music stores of yore?

FSJ chimes in and, as usual, he nails it.

So, fair enough. Bring on the big media cluster fuck. Roll out all the different systems that don’t work together. Bring on all the different kinds of software, none of which will work as well as iTunes. Bring on a zillion different user interfaces, a zillion accounts you need to set up, a zillion new usernames and passwords and a list of which services can work on which devices in which format. Right. When you’re good and tired of that, we’ll be here waiting for you.

Just like the iTunes Music Store, the only way online video distribution is going to succeed is if all the studios agree to common prices, consistent DRM (or none! Imagine that?), and centralized availability. I should be able to get every TV show / Movie from one source, and I shouldn’t have to worry if it’ll play on the various devices I own. I want to watch it on my computer, and my TV, and iPhone, and my iPod. And I’m not going to pay for the same content multiple times to have that privilege. Of course this assumes you’ve bought into the Apple platform, but come on… is there anything available that’s actually better?

Now, all that said – this is an interesting play by NBC, simply because it appears to be a last-ditch effort to hold on to their old business model. At the moment, customers are currently accustom to paying nothing for their television content. Yes, I recognize that you’re paying the cable company, but you’re not paying for the video content itself. Those costs are subsidized by commercials you’re forced to watch.

Give away the content for free online; force viewers to watch commercials; maintain traditional revenue channels; screw Apple and retain control.

I’m sure that sounded good in the boardroom, but it won’t work. Just like the old music stores, DRM, price inconsistencies, and technical complications are all going to get in the way and kill the experience. It’ll be too complicated for the masses, and it’ll eventually die.

I give them 8 months before they’ve got all their content back on iTunes, and 12-24 months before they abandon this new venture altogether.

Now, if only Apple would allow me to download video content directly from the Apple TV. Methinks that, just like the iPod Touch/iPhone there’ll be a iTunes WiFi Music Store available in an update soon.

Or so I hope.

Apple hosted a special event today, and beyond the new iPods and iPhone announcements, Steve Jobs offered up a few stats about their iTunes store that really echo my comments in yesterday’s post

• 600 million copies of iTunes distributed.
• Over 3 billion songs bought on iTunes.
• iTunes is the number one online music store in all 21 countries Apple operates in.
• Started with just 200k songs, but now has over 6m songs in every single one of those stores. Millions ahead of anyone else.
• iTunes is now the number 3 music retailer in the US—behind Wal-Mart and Best Buy, ahead of Amazon and Target.

• For 2006, 32% of all the music released in the US were digital-only releases. A THIRD of the music released was digital only.

  Funny, we don’t hear much from Napster and their music subscription services these days… I wonder why.

Rick Rubin, founder of Def Jam records and “career-transforming, chart-topping, Grammy Award-winning producer” was profiled in the latest issue of the New York Times Magazine. Rubin, much respect for everything you’ve done over the years, but dude, you’re way off with this one.

“You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. “You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”

No, seriously. A subscription model? Again? Haven’t we covered this ground already? You have to be kidding me.

As Gruber points out, that technology ship has sailed and no one was on board. No one wants DRM, which means no one wants to subscribe to a service for their music. You can’t have one without the other.

Too all the record executives out there, listen up. Music subscriptions (and the DRM that comes with it) are not the magic bullet that will solve your piracy problem. It won’t work. Give it up. Move on already.

Rubin goes on to say,

Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business.

The new model is already here. It’s called iTunes. Stop fighting the inevitable and just accept it. Take a deep breath. Take it all in.

Of course Universal isn’t going down without a fight. And NBC is doing the same with their video content, but seriously guys, you’re not going to do any better. And Microsoft isn’t going to help. Neither is MTV. Or Real (opps, same as MTV, right?). Or Sony.

Apple is the only player in town that got it right and as FSJ pointed out, the record labels just woke up and realized “all the power in the value chain resides in one player.” Oops.

Here’s the thing. These guys could have done what we did. In the early days of the Internet, everyone figured the majors would build digital distribution arms. But they didn’t do it, because they didn’t understand technology, and they didn’t want to invest in building this expertise, and they were freaked out about piracy and paralyzed with fear. So we stepped in. We made the big investment. We hired programmers. We developed software that’s easy to use and works flawlessly. (If you think that’s trivial, think again. It’s huge.) We ran the system. We promoted it, we marketed it, we haggled with all the majors and struck deals. We took all the risk, which was considerable. Now we’re reaping the reward. And the majors want a bigger slice. Um, for what? We did all the work. Ain’t gonna happen, slick.

Tower Records has been replaced by iTunes. MTV has been replaced by YouTube. MySpace has been replaced by Facebook (until something replaces it of course). I had hoped Pandora would replace radio, but, of course, the RIAA went and sued them. Bravo guys. Bravo.

Ladies and gentlemen of the record industry, may I have your attention please. This is the new playing field people. Kicking the corpse isn’t going to bring it back to life. Stop denying it. Stop fighting it. Just embrace it.

Along with the Leopard preview at WWDC yesterday, Apple also unveiled a significant update to Apple.com. If you haven’t seen it yet, take a moment to look it over. Not unlike how they’ve reshaped the computer and music industries, it appears as if Apple is looking to redefine the rules of online design as well.

A few observations:

• The first and most obvious change is the drastically simplified navigation. It’s clean, void of clutter, and I’m sure it caused a number of internal debates, as all but core-business links have been removed (and if there was any debate before, I think it’s quite clear that Apple is indeed a hardware company).
• They have fully embraced 1024 as the de facto resolution with the width of the site now stretching to 980px.
• Products are now predominately in a horizontal-scrolling window (horizontal scrolling has typically been frowned upon).
• Extensive use of AJAX throughout, primarily as a means of eliminating clutter through hiding/sliding panels.
• Breadcrumb navigation has been moved to the footer, which I think is a first for any major corporate site (or possibly a first for any site… I haven’t seen it done before).
• Apple is also unafraid to use different background colors throughout the site (black or white), although I’m not sure if there are any rules governing which color is used when.
• There are a number of excellent (and well produced) videos throughout which all use a styled Quicktime player (checkout the Leopard Preview for a number of examples).
• I don’t believe Flash is used at all in the site. (Video is handled by Quicktime, and animation by AJAX).
• There are plenty of exceptions, but overall there appears to be a move to increase the whitespace on pages.

• Quite simply, the new site feels more like OS X than just a standard corporate website.

  Overall, I’m curious to see how the industry will respond to the new site, as a number of the decisions Apple have made here contradict so-called “best practices”.

Apple said Monday that the 100 millionth iPod has been sold, making the iPod the fastest selling music player in history.

Yeah. That’s a lot of iPods. I know I’ve contributed my fair share to that number… I think I’m on my 5th. Speaking of which, I haven’t upgraded in quite a while actually, and don’t plan on until I can either:

1. Get my hands on an iPhone. Or,

1. Get my hands on a widescreen iPod (aka, iPhone without the phone)

   With all the travel I’ve been doing, I’d definitely take advantage of video-playing, widescreen iPod (yes, I realize the current iPods play video). That, and I hate my Blackberry and can’t wait until I can replace it with an iPhone, even though I know the iPhone won’t really work all that well with the company’s email sever, so I won’t really be able to replace it… But a guy can dream, right?

   Either way, I’ll be sticking with my current iPod Photo until either of the above scenarios comes to fruition.

   Also, speaking of iPods – it had been reported earlier this week that a solider in Iraq had been shot, and his iPod had taken the brunt of impact (quite possibly saving his life). While the thought of an iPod stopping a bullet is laughable, it turns out that the damaged iPod is what actually informed the soldier that he’d been shot! Apparently he’d been involved in the shootout, and then headed back to his bunk afterwards. Only there did he discovered that he (and his iPod) had been shot, simply because the iPod wasn’t working!

   In other news, Apple is expected to announce they’ve sold 100 million + 1 iPods later this afternoon.

October 25, 2006. Yep, that was the last time I posted something. It’s amazing how long I’ve let this simmer without touching it. So much has happened since then, but I just haven’t been inspired to actually talk about it. Since then, I’ve taken up snowboarding, I got a Wii for Christmas, Apple announced the iPhone, my AppleTV should be arriving soon, it’s almost spring which means it’s almost motorcycle season! So much to talk about!

Ok, so I’m getting back on the horse again. Lets see how long I keep it up this time.

Yep, we’ve got ourselves a few new jackasses this week. John Gruber sums up the recent Gartner analysis with a equal parts humor and critique, that it actually make me laugh out loud.

Two days ago, Gartner “analysts” Mark Stahlman and Charles Smulders issued a report recommending that “Apple abandon the computer hardware business and license Mac OS X to Dell”. Hello, Gartner? 1997 called and they want their advice for Apple back.

For those not following along, Apple just announced their quarterly earnings, and it was another record quarter for them:

• the most Macs ever sold in a single fiscal quarter (1.6 million)
• the most Macs ever sold in a fiscal year (5.3 million)
• strong quarterly profits ($546 million)

• high gross margins (29.2 percent)

  Sorry, why exactly would Apple want to abandon the computer hardware business and license Mac OS X to Dell?

  Gruber goes on to further explain why Mark Stahlman and Charles Smulders are jackasses of the week, but he really sums it up nicely with one single sentence.

  It’s hard to get a handle on the magnitude of the jackassery here.

  So true, John. So true.

And so it begins… the great television transition. After all the talk, I’ve decided to finally bite the bullet and drop my cable services in favor of downloaded television. However, before I can fully commit I need the new setup to meet 2 simple criteria: Can I consume the same content as before, and will my wife be able to use it on her own?

On the surface, it seems doable. The technology is (almost) there, the content is available (in one way or another), and the economics (somewhat) work. This is clearly premature, but I dove in headfirst and I picked up a Mac Mini last night. After a rather straight forward installation (and a few wasted hours of pointless troubleshooting), I’ve got it hooked up and everything seems to be working as expected. There are some issues to discuss, but first let’s take a look at the setup.

The Hardware

In the living room, I’ve got a rather straight forward setup:

• TV: Sony KV-36HS510
• Receiver: Sony HTDDW900

• Mac Mini: 1.66GHz Intel Core Duo

  Pretty simply really. I ditched my DVD player as it’s duties will be offloaded to the Mini (and I may rip the DVDs and store them remotely… but that’ll wait for another day). I kept the digital cable box connected should I still need it, but I’m hoping to keep it turned off completely. If it stays off for a month, it’s gone.

  Understanding that the content isn’t HD (or 5.1 for that matter) this is clearly overkill, but I’ve kept everything digital. Video is displayed over HDMI, and audio via TOSLINK. Here’s to hoping that Apple starts releasing higher-quality content sometime in the foreseeable future.

  So where is all of this newfangled, downloaded content actually coming from? For the most part, the iTunes Store. I’ve been downloading content from iTunes on my G5, and storing everything on an external 1.2TB, FW800 LaCie Bigger Disk Extreme. All of the video and music is cataloged in iTunes, and is shared wirelessly throughout the house. That said, I could have easily hooked the external drive up to the Mini downstairs, and wirelessly connected to it from upstairs (there are some complications with this, but I may do just it… for reasons which will become clear below).

  A few notes:

  1. Being that the Mini and the TV are both DVI, I needed a few DVI > HDMI cables to interface with the receiver. Stay away from the standard retailers (Best Buy, Circuit City, FutureShop, etc.) as the prices are ridiculous. Hit up Google – there are some good deals to be found.
  2. The receiver has standard TOSLINK inputs, so I needed a 3.5mm adaptor for the Mini… which I picked up at Active Surplus for $0.50.
  3. The TV didn’t originally like the default resolution the Mini was serving up – everything was cutoff around the edges (the dock, the menubar, etc), and there was a slight flicker in the picture. After a few hours of research, fussing with DisplayConfigX to set the correct resolution/refresh rate (and come up short of course), I eventually realized that there was a simple checkbox under “options” in the display preferences which turned off the overscan. Problem solved.

1. With the optical audio, the Mini locks the sound volume… which in turn renders the volume keys on the Apple Remote completely useless. I have a Harmon Kardon TC30 which is an incredibly robust universal remote, but for some reason it’s not jiving with the Mini at the moment, and will require some further persuasion.

   Issues & Observations

   Inability to purchase shows directly from Front Row

   This is probably the biggest “experience” issue so far. The fact that I need to go to my computer, queue up downloads and then go back to my TV is almost the deal breaker. I luckily have enough content to tide me over for the time being, but I can see this becoming an even greater issue soon… because my wife certainly won’t be doing this on her own.

   That said, if you venture into the Movie Trailers section in Front Row, it quickly becomes clear that Apple’s moving to address this. To watch a movie trailer, you simply select the movie poster from the list (which are downloaded when you first enter the section). Doing so brings up a surprisingly decent fullscreen video, which begins playing almost immediately. There’s a slight buffer that occurs, but it’s marginal. Full-length shows streamed by many people at once will put a HUGE strain on Apple’s ability to deliver content, but it at least looks to be technically possible. I hope their new data center is up to the task.

   Wireless bottleneck

   Put simply, 802.11g is not up to the task. While you can get video to stream, it’s clear there isn’t enough bandwidth to fully deliver the goods. At the moment, your best bet is to connect an external drive to the Mini, or run some CAT5 and be done with it. However, if the rumors are true, the iTV will bring 802.11n, and the world will be a better place because of it.

   Inconsistent video quality & lack of 5.1 surround sound

   I’ve been noticing there’s a lot of inconsistencies between the various shows I’ve downloaded. Aspect ratio (4:3 vs 16:9), compression quality, and volume level are the biggest issues… beyond the actual 640×480 resolution that is. And lest we forget the low quality audio that accompanies the video. Guys, seriously, the video AND audio quality needs to improve… the current quality doesn’t hold a candle to HDTV. It’s not even close.

   Insufficient (legal) content

   At the moment, Apple simply doesn’t have enough content to completely replace the offerings available through traditional channels. The shortcomings can obviously be supplemented by Bit Torrent, but again – that adds a whole level of complexity to the mix, not to mention the questionable legality. While the number of programs are being added to each week, there simply isn’t enough yet. And where the hell is HBO already?

   Front Row doesn’t automatically refresh content

   I haven’t attempted to see if there’s a work around for this yet, and it may be a byproduct of wireless connecting to a shared library, but Front Row doesn’t seem to automatically update itself when new content is added. So for the time being, you need to step back to the main Front Row menu, and then navigate back to the shared library when you’ve added new content.

   Lack of Meta Data in Front Row

   This is minor to some degree, but I do believe it’s an incredible oversight. When you select a show, you have nothing to go by except the name of that particular show. If you’re not wirelessly connected, you do get a video preview of the show, but I still don’t think that’s enough. How about a text description, or some indication if I’ve already watched it?

   What’s new, what’s old, and what might I like?

   This is something that I think Apple needs to lift directly from TiVo. When I start up Front Row, it should tell me what’s been recently downloaded and/or what hasn’t been watched yet. Similarly, it should offer up recommendations for me to checkout and potentially purchase. Admittedly however, this is functionality that should (will?) be rolled out in conjunction with the ability to access the iTunes Store directly from Front Row.

   Final Thought

   This technology is clearly premature, and the size of the market has yet to be determined, but in the end I feel this is the future of television and I’m getting onboard. Now let’s hope I can get my TC30 universal remote working… or my wife will put a stop to all this nonsense, and I’ll be selling one slightly-used Mac Mini on Ebay soon.

I started this as a response to Geoff’s comment from my previous post, but it ballooned into a post unto itself.

Geoff Wrote: – “Good points, all of them. However, even Job’s himself stated this isn’t meant to take over as a single source of acquisition/consumption. I know I’ll still use my dvd player, satellite, YouTube and Torrents as video sources. But there are times when I want to watch something that simply isn’t available through those means. It’s at that moment when I’ll turn to the itunes store. I’m sure that I’ll enjoy the experience and be okay with the cost. I also expect that the experience will be so pleasant that I’ll occasionally turn to it even when other means are available – likely because it will be easier. I’m currently consuming about 90% of my media through non-traditional means. To me, all I want is a REALLY basic cable package, one that doesn’t cost $40/month. I’d love to be able to buy per channel. I still have a need to consume live news/events, but that’s about it.”

True. But Jobs also stated that Apple had no interest in making a flash-based mp3 player, or an iPod that plays video… Hell, he even said I don’t think the convergence of television and computer is going to happen.

For Apple to succeed, they need to play nice with the existing players, all while slowly disrupting the market until it’s too late for the competition to react. Similarly, I don’t think they want to reveal all their cards yet, for fear of other competitors (read: Microsoft) getting involved to soon. They caught everyone off-guard with the iPod + iTunes Store, and I think they’re doing it again with the iTV + iTunes store. And the irony is that they’ve used the iPod as the decoy.

Take a step back, and look how long TV shows have been available on the iTunes store. If I’m not mistaken, it’s been about a year now. While everyone took notice of it, no one saw it as a treat as the only suitable place to consume this video was on an iPod. Take a look now – Apple’s got thousands of new AND old television content, and it’s being updated quite frequently. When the pieces finally come together, I think it’ll be too late for the competition (be it the traditional cable companies, or Microsoft) to react.

For video, the critical missing piece is iTV, because at the moment, there’s no easy way to consume video from your television. Sure, you can string together a Mac Mini, or any number of existing technologies... but the experience is still flawed. For starters, the solution isn’t even remotely elegant, and secondly you cannot immediately acquire content, unless you go to your computer and queue it up for download. With iTV, I believe Apple will seamlessly tie the iTunes store with your television, and you’ll be able to download and purchase new content without leaving your couch.

If you look within Front Row, you can clearly see the signs of this… Movie Trailers is the clearest example – it seamlessly connects with Apple, serves up the movie posters and streams in the video. Add the ability to purchase that video with a single click, and you’re good to go.

Similarly, the iTV is without any sort of DVR functionality. If Apple was planning to have their wireless box cohabitate with traditional sources, I would assume they’d want to integrate everything together for a truly integrated experience.

But I don’t believe that’s the plan. It’s not “Apple” enough… it’s too clunky and complicated. And there are other players in that market, and none of them have been even remotely successful. No, Apple’s plan is to build another fully-integrated vertical, where it can control the experience from top to bottom. Purchase your content directly from Apple, with it stored in one central location, accessible from many devices… be it your iMac, Mac Book, stereo, TV and of course, your iPod.

Regardless of what Jobs has stated, I think Apple’s video strategy will be strikingly similar to their music strategy; Offer as much content as possible (the “long tail” if you wish…), available for immediate download at a reasonable price. The overall quality will be sacrificed for convenience (no HDTV, at least for the time being), but it’ll be good enough for Joe Average.

However, there are still some challenges ahead.

1. Bandwidth will play a major role in this strategy. I’m not sure if anyone’s noticed, but Apple recently purchased a massive data centre... one has to wonder what that was for.
2. Similarly, broadband will be critical, and one has to hope that ISPs don’t retaliate against the “mass downloading” by imposing strict download caps, or crippling the technology as they have with Bit Torrent.
3. Live TV will be a huge challenge, and one has to stop and wonder how they’ll deal with it. Because people won’t stand for watching a delayed feed of the Super Bowl.
4. Pricing is still an issue, and will have to come down for mass-adoption of this platform.

1. Storage capacity will be another issue for the general public. For instance, season 1 of Prison Break weighs in at 10GB. At that rate, people will be running out of space fast and furious. Luckily external drives are relatively cheap (and if Apple is smart, they’ll be releasing some sort of “lite” version of their XServe Raid system.)