Apple Inc (AAPL)

[Tex]

re AppleTV revenue

These guys seem to be thinking Apple will create a subscription model around the AppleTV. I'm not saying this is impossible, but it flies in the face of historical calls by analysts to create a subscriber model for iTS content.

In my household, viewers watch maybe 3 shows (ER, CSI, NCIS). Buying these for a month during the season costs more than a TiVo subscription, though the TiVo will keep charging subscription costs through the summer. I'm guessing AppleTV won't be an outlet for watching Olympic performances. I suspect Apple could offer a RSS TV schedule feed for AppleTVs, keep their clocks right with time.apple.com, and set them up as informers for whatever additional tools would be needed to do TiVo on your computer. Apple already runs time.apple.com, and an RSS feed would be cheap unless the content were non-free IP someone had to pay to get. I just don't know where Yahoo! gets TV schedule information, though Apple could have AppleTV crib this info straight off Yahoo! I suppose.

There's a lot left for making the viewing experience more user-friendly. With respect to DVDs, there are some legal obstacles to doing what Apple did in music (DMCA, encrypted copyrighted DVD content). However, the question is whether partnering with someone to make it happen is too close to the pirate flag for Apple to sail at present. If not, Apple could solve a real issue for people.

On the other hand, if AppleTV is just intended to let people play iTS-bought content, and Apple doesn't make it easy for third parties to solve the overall problem of viewing from an iTunes library, I'd worry the market for a player of iTS content might not be that big.

That's not to say AppleTV won't be profitable, it's just that it may not have a big impact if it isn't seen as doing "everything" one wants, because there are plenty of others trying to offer "everything" and some of them will be good enough to satisfy, and the number of buyers for "only" what AppleTV solves will be smaller and smaller the less it enables folks to do. Naturally, I want to see it in the middle of a solution for "everything"

Take care,
--Tex.