Apple TV, while not the first of it’s kind, is definitely different. With an estimated userbase of nearly 120 million iTunes users, the Apple TV has a head start while other solutions are starting from scratch. Those 120 million users are already familiar with iTunes, and how it works, and the Apple TV is as seemless as the iTunes store.

The viewing habits of 20 - 40 year olds have changed dramatically in the past few years, with the introduction of TiVo and other similar devices. However, these just delay normal television watching, complete with commercials (though the can be skipped if you remember you are not watching live TV). A quick look at the top selling TV episodes on the iTunes store shows such shows as LOST, Battlestar Galactica and South Park, none of which are in the top 20 shows each week. So, imagine you are a LOST fan, but you are out for the evening and miss it, so quick $1.99 on iTunes, and one hour later, you are caught up.

With the Apple TV, you are no longer left to watch those episodes on your iPod or computer screen, but you can actually watch them on your TV. Currently, the episodes you purchase on iTunes are commercial free. Imagine if the studios decide to add advertisments to their episodes, but allow the downloads through iTunes for free. You can then have the season pass for LOST automatically download to your Apple TV with no cost.

Where the major changes will come will be from independent companies. What got me thinking about this is an upcoming article in Advertising Age by Steve Rubel, currently posted on his Blog Micro Persuassion. Here is a quick quote:

TV for years has been a closed system. It requires big infrastructure and dollars to create content and broadcast it to the masses. And although distribution has shifted from broadcast airwaves to copper wires and now fiber optic cables, the economics remain the same. The cable nets identify a niche that is big enough to support a sizable audience and therefore advertising.

A prime time episode can cost millions of dollars to produce. You Tube has proven that entertainment can be made cheaply, and still be enjoyable. The next step will be to have small production companies step up to produce entertainment that would never make it on network television, but would be of interest to a segment of the population.

So, while the Apple TV is somewhat crippled now, expect big changes to come soon that could make this somewhat innocuous device a huge hit.

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