Quote of the Day: Apple TV “still a hobby”

Dave Zatz —  October 22, 2008

From Apple’s quarterly earnings call, as transcribed by Seeking Alpha:

Bill Fearnley – FTN Midwest: […] Steve, how are you thinking about Apple TV now? […] If you look at the digital living room category and you look at the upcoming year of 2009, how do you look at the digital living room opportunity and how it relates to Apple TV?

Steven P. Jobs: Well again, I think the whole category is still a hobby right now. I don’t think anybody has succeeded at it and actually the experimentation has slowed down. A lot of the early companies that were trying things have faded away, so I’d have to say that given the economic conditions, given the venture capital outlooks and stuff, I continue to believe it will be a hobby in 2009.

Where do I even start? While Apple continues to believe providing digital media in the living room is a “hobby” the door remains wide open for those who are serious about this space. The big Steve-o is correct that current economic conditions are and will be a drag but, as Apple has shown, innovation doesn’t cease in the face of adversity. Within the last few weeks, we’ve seen Hulu land on D-Link’s DivX extender, ZvBox, SlingCatcher, and the PS3. But if I’m wrong about the increased momentum of converged “lean back” technologies, we’ll just have a quiet 2009 here on ZNF.

18 responses to Quote of the Day: Apple TV “still a hobby”

  1. I applaud Apple for their stance – they are makers of computer Operating systems and personal computing hardware, it’s their core, 30 years of experience, competency. It shows humility and a “We’re in this together” tone to Consumers. I hear the same tone in when Google speaks of Android.

    …where is Steve Ballmer’s same honesty when it comes to the Zune, the xbox and the ultra practical Surface?

  2. That’s one perspective… Another one might be: Steve being honest in telling his customers who spent $230 and up on these devices not to expect any significant updates over the next year, that he’s not interested in this category despite their purchase.

  3. He’s signaling that–for whatever reason–Apple can’t do it right, right now. Possible reasons for that:
    1. content providers not coming across with lots of content
    2. Apple too stretched between iPhone and Macs to devote lots of engineering talent to AppleTV.

    He can’t really come out and say “we can’t do this well, now”; that way leads to class action suits.

  4. I think David has hit the nail on the head. Besides DVRs, the market for internet-connected video devices is relatively small. This is what Steve Jobs meant. The reason for this, I believe, is that there is little content available. Visit your local retailer and you’ll see a huge selection of DVDs. But thanks to the DMCA, USA customers cannot legally copy most of them to their media players. And download services (Netflix, iTunes, etc.) have a tiny fraction of the library that you find with physical DVDs.

    I thought that Real had the right idea with managed copy for DVDs, but it’s clear that they’ve got a difficult legal fight over this. I think the only way this is going to get resolved is for the US congress to revise the DMCA. Meantime, we’re stuck with this niche market.

  5. “…telling his customers who spent $230 and up on these devices…”

    Yeah, but that’s pocket change to the average Apple user, isn’t it? The new PowerBook is $5,000.00+? iPhones sold out on 2007 launch day for $899.00 each?

    Found this blog post by typical AppleTV owner:

    http://www.guardian.co.uk/business/2008/oct/18/banking-useconomy

    :P

  6. There’s a ton that could be done and is being done in this space that doesn’t necessarily require studios or additional content.

    How about sharing content recommendations with friends like Boxee or streaming my own content from ATV like a Slingbox. Or how about producing some speakers and amplifiers and building out a Sonos-type solution with ATV as the centerpiece. Speaking of music, how about establishing a relationship or Rhapsody or launching a subscription music service? Heck, the PS3 now has Flash in their (limited) web browser allowing for Hulu playback. Let me sync and natively playback more file formats. Or how about an television-based Open Table reservations system with restaurant video reviews? Or make Ben Drawbaugh happy and hook up with or create some home automation stuff. Vista Media Center, and thus the Xbox, has a new MSNBC video gadget. And while CableCARD is a royal PITA and a complex concept for consumers, what’s stopping them from a putting out OTA DVR functionalities? Etc, etc, etc.

    Maybe a lot of this isn’t mainstream or easily understood today, but isn’t that what Apple excels at – bringing new technologies to mainstream Joe the Plumber types? Steve’s response yesterday just suggests they’ll be mostly sitting on the sidelines with what they have – possibly depressing to current customers and possibly a deterrent to potential customers. Pretty weak if you ask me. As Washington Post’s Rob P said to me yesterday, it’s “telling people not to buy the thing until Apple gets serious about it. Even if you think that, why say so in public?”

  7. I agree with you, Dave. I mean, we all kinda know that ATV isn’t high on Apple’s list of priorities (only higher than Mac Mini, lol), but the response was almost as lame as Blu-Ray diss.

  8. Wow, Dave, I consider myself a ‘techie’, and other than -maybe- the OTA DVR, I can’t see anything on your wishlist I’d care about. But hey, that’s just me. And honestly, I don’t really want just an OTA DVR either.

    Now, give me a replacement for my Tivo, well…..

    I’d be thrilled if I could have all the functionality of my current (and un-hacked) AppleTV and toss in the Tivo.

    I remember years ago thinking how cool it’d be if Apple would make a phone, but dismissing it as pure fantasy….

  9. Innovation is too slow in this space, and it’s not just Apple that is dragging their feet.

    I waited eagerly for over 2 years for the Slingcatcher to hit the market and now that it’s out I am sorely disappointed.

    The fact that a device that was planned for over a year ago at a $199 price point with integrated wi-fi, making it a great way to take your Sling with you on vacations, etc, has turned into a $299 device with wired ethernet and features that barely work is a sore disappointment.

    I don’t think that anyone working at Sling should be casting stones at Apple when a product like Slingcatcher was released.

    If the Apple TV had slingcatcher functionality that let it receive a Slingbox feed I would grab it in a minute since it 1. actually works. 2. can get a variety of content direct from servers.

  10. Jason, I left Sling in May and agree the Catcher platform still needs a lot of work.

  11. It’s just frustrating that such an important product has been left languishing. It makes me wonder if the Echostar aquisition has resulted in a change in priorities away from next gen products like Sling Catcher.

    We should have seen a $199 Sling Catcher basic and a $299 product with integrated wi-fi and hard drive. Both boxes should have been capable of pulling in direct feeds and downloads without a PC for purchase and download of TV episodes, movies, etc.

    As it is the Sling Catcher is a shell of a product, and even worse, there’s no other competing product out there that can do the same thing.

  12. What I always wanted to see was a $99 SlingCatcher that was truly ONLY a SlingCatcer (for a Slingbox feed) and then a higher-end model with these additional streaming and extender capabilities. I can tell you that they’re working on pulling in direct video feeds without a PC via all sorts of content arrangements negotiated in conjunction with Sling.com. Don’t know timing though. And of course I’m already on the record requesting NAS streaming and high def PRO-HD streaming. I’m also on the record saying all products should integrate WiFi capabilities.

  13. Maybe a lot of this isn’t mainstream or easily understood today

    And that’s the key. Jobs specifically said that Apple doesn’t do “nascent” markets. Their strategy lately has been to jump into already well-developed markets and try to remake them. iPod went into the Walkman market; iPhone into the cellphone market and aTV was supposed to go into the VCR market. The things you’re talking about don’t exist as a readily exploitable market.

    ’s “telling people not to buy the thing until Apple gets serious about it. Even if you think that, why say so in public?”

    Because Jobs is an egomaniac and wants everyone to be clear why aTV isn’t as “awesomely great” as everything else Apple does? Same reason he disparages the Mac mini.

  14. @David that’s a much more articulate, intelligent way of stating my snarky comment. Thanks.

    Also, Pixar was “just a hobby” for his Steveness too, until Finding Nemo became like the third highest grossing film of all time, then it was “serious business”.

    Jobs is on the board of directors for Disney, ABC and ESPN it’s not like he doesn’t see decent live content in front of him, he could add to AppleTV!

  15. Well, I’m not in a position to say “Because Jobs is an egomaniac.” However, it’s interesting that he’s also said there’d be no color or flash-based iPods either… and look where we are. I only harp on this because Apple is in one of the best positions to innovate in this category. If they only dedicated the resources to do so.

  16. Dave: the Apple TV is already nearly identical to a Sonos. Couple an Apple TV with an iPhone or iPod Touch and the free Remote application, and you’ve basically got the same functionality as the Sonos. The Sonos has an amplifier, but the Apple TV does video and iTunes. I personally think that gives the Apple TV a slight edge.

    I agree with Steve Jobs that the target market for the Apple TV is a replacement for the DVD player. But the two impediments are the small library of downloads and the DMCA which legally prevents Americans from copying DVDs to an Apple TV. (Legality of DVD copying varies in different countries).

    Online video streaming could be interesting, but there aren’t enough compelling reasons for that. Most streaming video has such small resolution and such high compression that it is unwatchable on a living room TV. YouTube? It’s fine to a point, but I doubt anyone is ready to pay hundreds of dollars just to watch the same grainy videos on their living room.

    Now if Apple could get Hulu and other streaming content to the Apple TV, that would make a compelling device. But that would threaten revenues from the iTunes store. And if you consider other networks such as Discovery channel, their goal in online video is to compel you to watch the ads on their website. Putting this content onto a living room device makes that difficult, if not impossible.

    An Apple TV DVR would be great, but I’m not holding my breath.

  17. Seems since there is no one dominating in the is space, Steve Jobs is correct. PS3 sales are not wonderful along with Blu-ray. The SlingCatcher just released sucks beyond belief after waiting two years for it. VuDu and Tivo give me a break, neither is doing well.

    Seems with the content owners, licensing, and competition Apple is playing the wait game. Probably in a down economy a good idea. Especially since players like Microsoft and others have not made a dent.

  18. What about VUDU? They have 11,000 titles, 650 HD titles, HDX and a much better interface. Is that an issue here?