Is Apple TV Just a Glorified Netflix Box?


apple tv 2nd generation in hand

GigaOm has posted a short op-ed wondering if Apple TV is nothing more than a Netflix box (and I’ll add: for the Apple user base)? The argument for that conclusion comes from the fact that the new, second generation Apple TV device is most often used to stream Netflix content to one’s TV — a capability that wasn’t possible in the first generation device. It’s speculated that users watch 10x as many rentals through Netflix than those who purchase rentals from iTunes. The rough numbers, gathered Gleacher & Company, state that Apple TV users stream 5.1 million pieces of content per day from Netflix compared to 450,000 from iTunes. If you think about it, the $99 Apple TV has more in common with the sub-$100, Netflix compatible Roku Player than just about another device — except the Apple TV caters to Apple’s base with extra goodies like iTunes / MobileMe access and AirPlay streaming support. My thoughts: Apple TV (black) has taken off and sold a million units in 2010 for two primary reasons… 1) it added third-party app support (with the potential for a proper ATV app store in the future); 2) it priced the device at $99 to make it a no-brainer add-on for anyone’s Apple-based/friendly ecosystem. No doubt anyone not part of the ecosystem would prefer the many other alternatives. FYI, the current set of third-party apps supported by Apple TV are: Netflix, Flickr, and YouTube. That’s it. The funny thing is Apple will most likely shoot themselves in the other foot, if they allow services like Hulu Plus and Amazon Music/VOD in the future.




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Filed in: Industry Buzz, Streaming Media Devices


  • http://www.facebook.com/people/Jim-H-Frando/685343072 Jim H. Frando

    Lets not forget about the huge data center in NC that Apple is due to bring online any day now. I am betting this huge data center will change everything. You have to remember, Apple does not rush to market with anything, they take their time and release their products and services when they are ready. I purchased the ATV (Black) and the main reason I did so, despite all the other offerings is due to my investment in iTunes and all my media, so yes, it is due to their ecosystem. But, like I said, I believe Apple will bring even greater offerings once the data center goes online.

  • http://www.facebook.com/kenberger Kenneth Berger

    Owning both the old and new AppleTV I can tell you it is much more than a glorified Netflix box. I watch both iTunes content and netflix on m new Apple TV, maybe tending towards more Netfilx, but without the Itunes conent I would not like it. We use it most for playing music from one of my computers in the house (I also have an Airport Express that I also use solely for streaming music from the house iMac to the main stereo system.
    iTunes content for now tends to be 1st release stuff that is not on Netflix, like when you want to sit and watch something. Netflix as it is “free” tends to be a replacement for the random channel surfing that we used to do on the cable system, i.e. when you have not idea what you want to watch and will surf for something interesting.
    So look at the old AppleTV as cable before there were lots of channels and the new Apple TV as Cable with 100′s of channels.
    But it is all about content, if an when AppleTV gets current content streaming – like HBO and Showtime Series (ESPN and CNN I am sure too for many) I would think it will take off as a true cable replacement.

    For reference we also have an Xbox and no one would think of using it for Netflix the UI is amazingly bad! And not one has ever (and we have had Apple TV for years) watched YouTube on the TV and and only as a demo do you ever watch photos or such.

    The bigger question I see is the issue of connection speed and net neutrality (and this applies to all internet boxes, how many people use their cable companies for internet connectivity? Can and or will the cable companies shape their bandwidth to limit the functionality of Netfilx or other services? In the past 60 days with the new Apple TV watching Netfilx on our cable internet connection seem like it almost always requires multiple pauses during a movie for the unit to re-buffer the stream, and this virtually never happens with Apple TV, to the point that sometimes we stop watching Netflix content and go to iTunes content.

  • http://www.facebook.com/kenberger Kenneth Berger

    Owning both the old and new AppleTV I can tell you it is much more than a glorified Netflix box. I watch both iTunes content and netflix on m new Apple TV, maybe tending towards more Netfilx, but without the Itunes conent I would not like it. We use it most for playing music from one of my computers in the house (I also have an Airport Express that I also use solely for streaming music from the house iMac to the main stereo system.
    iTunes content for now tends to be 1st release stuff that is not on Netflix, like when you want to sit and watch something. Netflix as it is “free” tends to be a replacement for the random channel surfing that we used to do on the cable system, i.e. when you have not idea what you want to watch and will surf for something interesting.
    So look at the old AppleTV as cable before there were lots of channels and the new Apple TV as Cable with 100′s of channels.
    But it is all about content, if an when AppleTV gets current content streaming – like HBO and Showtime Series (ESPN and CNN I am sure too for many) I would think it will take off as a true cable replacement.

    For reference we also have an Xbox and no one would think of using it for Netflix the UI is amazingly bad! And not one has ever (and we have had Apple TV for years) watched YouTube on the TV and and only as a demo do you ever watch photos or such.

    The bigger question I see is the issue of connection speed and net neutrality (and this applies to all internet boxes, how many people use their cable companies for internet connectivity? Can and or will the cable companies shape their bandwidth to limit the functionality of Netfilx or other services? In the past 60 days with the new Apple TV watching Netfilx on our cable internet connection seem like it almost always requires multiple pauses during a movie for the unit to re-buffer the stream, and this virtually never happens with Apple TV, to the point that sometimes we stop watching Netflix content and go to iTunes content.

  • http://twitter.com/agrundner Alexander Grundner

    I agree… it’s good for ATV owners, but not so good for profits via iTunes sales. Apple and its shareholders want to see iTunes continue to be the cash cow that it is. Opening up the Apple TV platform just invites more competition to Apple’s established business (as evidence by what Netflix is currently to doing to iTunes TV and movie rentals) — though lost sales from media offerings could be offset in the future by revenue generated from ATV app sales. See, we actually agree with each other.