Last Updated: May 30, 2008: 10:03 AM EDT
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Apple TV and the death of the cable set-top box

Those annoying set-top cable boxes may soon be a thing of the past. But, like it or not, they'll be replaced by a different kind of device.

By Richard Siklos, editor at large

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Apple TV, in its current form, isn't what consumers need or want - at least not yet.

LOS ANGELES (Fortune) -- The announcement this week that Sony plans to work with other television makers to eliminate the need for set-top cable boxes could not have gained more affection at Fortune magazine's Hollywood digital test lab - also known as my living room.

Under the auspices of a cable industry standard called Tru2Way, Sony's plan is to sell TVs that will allow consumers to access interactive services like video-on-demand without renting and hooking up these bothersome cable boxes. (When was the last time you saw a cable box on top of a set, anyway?)

Last weekend, it so happens, I ventured into the newfangled world of gizmos designed to bypass the cable box - and cable altogether. These devices aim to bridge the computer and TV and, finally, allow people easily to download movies and shows directly from the Internet to their big screens. I decided to give the year-old Apple TV a whirl, and, as is often the case with things from Steve Jobs' elf-works, I was tickled to see that it arrived as a perfect little shiny white box with a wee remote. Hooking up the little guy was a little trickier, mostly because of the confounding array of inputs and controls on the LCD TV. (Truth is, had we not had a houseguest who happens to specializes in hooking up Apple networks, the Apple TV box would have been packed up and sent back - thanks John.)

Once up and running, it was great to use Apple's elegant navigation system to browse and order movies - and to watch trailers - compared to a typical cable-box remote and on-screen guide. The selection of movies (around 1,000) is better than what's available on cable video-on-demand, but still considerably less than the 10,000 that Netflix offers on its new set-side device. One cool feature of Apple TV: for a dollar more than the $2.99-$3.99 rental price, a lot of the latest films are available in high-definition. Podcasts, TV shows and selected Youtube videos are also available - plus the ability to look easily at photos and listen to music via my iTunes library.

Jobs has said he's disappointed with Apple TV sales, and, despite all its features, I can sort of see why. Undoubtedly cool, it was also something that most could live without - unlike, of course, their laptop, phone or music player - at least in this early iteration.

The endless parade of new gizmos that crescendos each January around the Consumer Electronics Show and Macworld highlight two vital questions for the gadget gods as well as the media mavens who are churning out the stuff to play on them. First, just because you can, does it mean that you should? For instance, because you can distribute all your content inexpensively for free online, is it really the best way to go? If you look at subscription-based cable channels like HBO, the answer would be no (or at least not yet). Similarly, the debate over whether all print media is created equal - and should be free and advertising-supported online - is still far from resolved. Of course, the specter of Napster-like piracy is a powerful inducement to play with new business models, however unproven.

Now for the second vital question: Is your product a solution to a real problem, or an answer to a problem that does not yet exist? In this category - and I know I'm inviting flaming by saying this - I'll put the well-received Amazon Kindle book reader. While it makes visceral sense that the production and distribution of books is amazingly inefficient and archaic, it's also not clear that book lovers have been yearning for a portable digital solution the way music lovers were (nor are they likely to start ripping them online).

So, back to the living room. Is a TV set that doesn't require an external cable box an answer to a real problem? Absolutely. But here again there are limits to what Tru2way can and can't do - for instance, you won't automatically be able to access the Web or a service like iTunes or Youtube from the built-in program guide. Therein lies the groaning irony: By the time the cable box is truly gone, new and improved versions of Apple TV and its ilk will probably take their place on ye olde set top.  To top of page

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