Wednesday, June 6, 2007

AT&T's Internet TV on Apple Set-Top Box in 2008?

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Citing a "well-connected" source, Engadget's Peter Rojas reports that AT&T (T) and Apple (AAPL) are working on adding Internet protocol television to Apple TV, starting sometime next year. He goes on to speculate:


We're guessing that it'll be something like AT&T's U-verse TV service, but it's still way too early to say whether this would be a blown-out offering a full package of channels aimed at replacing your current cable/satellite service, a more limited selection of on-demand programming, or whether it'd even be available to non-AT&T subscribers.

A rumor like this has a bit more credibility than usual, coming on heels of the Apple-YouTube deal, and is likely to fuel analysts' newly rekindled enthusiasm for the Apple TV platform.

Picture_12 Only days after Fortune's Brent Schendler pronounced Apple's (AAPL) set-top box all but dead ("Why Apple TV is a Dud"), Steve Jobs has breathed new life into the business he described at All Things Digital yesterday as a "hobby" (as opposed to a $10 billion business like iPod/iTunes, the Mac and, he hopes, the iPhone).

All it took were two relatively modest changes:

1) A new $399 version with a 160 gig hard drive (as opposed to the $299, 40 gig version that had been met with derision by heavy-duty downloaders);

2) A deal with Google (GOOG) to make YouTube content available on the Apple TV menu, starting in mid-June with "thousands" of clips (added manually by a team that puts them into Apple TV-friendly format) to be followed in the fall by YouTube's full catalog. (Apple press release here)

The YouTube deal is especially significant because it represents the first time the box is being used as anything but a place to show content purchased on the iTunes Music Store (or stuff previously stored on a local hard drive).

Opening up Apple TV by just this much has fired the imagination of analysts, who are now talking about other content that could be streamed directly to the box. TV shows, for example, shown with or without commercials, but on demand, when you want to watch them, thus bypassing the cable monopolies

No wonder Viacom (VIA), which is hardly YouTube friendly -- having sued Google for $1 billion for allowing Viacom intellectual property to slip (or rather pour) through YouTube's cracks -- seems to have changed its tune overnight.

"We're always vigilant about protecting our copyrights," a Viacom spokeswoman told the BBC.
"But we would welcome the opportunity to license our content to Apple as we do with all distributors."

[Apple TV screen shot courtesy of Gizmodo]

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