Steve Jobs is a very smart guy, and last spring he gave some incisive reasons why Apple and everybody else in Silicon Valley who tried to improve the television experience failed to get traction. “The TV industry has a subsidized model that gives everyone a set-top box … and that pretty much undermines innovation in the sector,” he said. “The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it.” He didn’t mention it, but it was understood that along with that roadblock was the problem of getting programming in the face of all sorts of licensing and cost barriers. That’s why, he concluded, Apple TV is a hobby, not a crucial business for his company.

But a guy needs a hobby, doesn’t he? So Apple is now back with a new version of Apple TV. Instead of the previous model that looked like a flatter AirPort, had a built-in hard drive, and cost $230, this one is a smaller black device that looks like a squared-off hockey puck, has no hard drive and cost only $100. And, of course, it has new software and a set of new services. It some ways it surpasses the previous model and, in other ways, does less.

As we’ve come to expect with Apple, the set-up is a dream. Simply plug it in the wall (bonus! no bulky power supply on the cord) and plug the HDMI cord you’ve paid extra for into the TV. (If you don’t have an HDTV stop reading, and go watch a DVD.) It’s dead simple to make a Wi-Fi connection, and log into iTunes. Now you’re ready to stream.

That’s the mindset you need for the Apple TV. Because there’s no hard drive, the box is a traffic cop handling digital content from various sources—the internet, your computer, the Apple store, your iPhone or iPad. For a lot of people, this can be pretty useful, though a lot of the sources are available with other devices, including the $60 Roku box—things like Netflix (a huge and wonderful addition to the Apple TV experience), YouTube, and internet radio. But only the Apple TV gives you iTunes, and since many millions use iTunes, that’s a big plus.

The signature experience of an Apple TV is using its straightforward, austere interface to call up the iTune store and watch videos. It loads easily and gives you a nice display of the choices available. Once you pick a video or movie trailer, it loads fairly briskly, and then you’re watching in excellent quality. (My living room Wi-Fi signal isn’t too strong, but interruptions were brief and infrequent.) The video streaming also worked great on Netflix, and it is sweet that the Apple TV interface hosts the Netflix instant-viewing feature. There’s also YouTube, which is fun to watch in a lean-back mode. Apple says that its API is open and if something Hulu wanted to get, in theory, that wouldn’t be a problem. (Same with iTunes music competitors like Rhapsody or Spotify—something that Apple TV cries for, since iTunes has no similar cloud-streaming service.) Of course, in theory, there shouldn’t be restrictive licenses that screw up just about every third-party attempt to innovate in the television space. But there are, so I’m not holding my breath for Hulu as a menu choice on the Apple TV.

Here’s a bigger catch: you can’t buy anything on Apple TV. Since you have no storage, you can only rent. That’s too bad, because only Fox and ABC offer shows for rental. It’s certainly a bad break if you want to see Breaking Bad. For the Fox and ABC shows, the one-dollar price is more than fair, but if multiple family members want to see the episode, everyone better be there because 48 hours after starting the show (24 hours for a movie), the rights disappear. And if you rent a video intending to watch it later that day and don’t get around to it, after 30 days, it’s gone. (Here’s hoping there’s a place in hell for the media lawyers who make these rules. A very special corner of hell where they know everyone can watch Breaking Bad but them.) There’s also frustration when you want to see certain movies that are on sale on iTunes but not yet rentable—often there’s a window where that happens. Yes, that mess is the fault of those fire and brimstone-bound media lawyers, but it’s Apple’s problem.

In those cases, there is a workaround—you can go to your computer, boot up iTunes, and buy the show or movie. Then you can use the Apple TV’s Home Sharing to stream from your computer to watch the video. Of course, if the owner of the laptop computer leaves the house, anyone left in the living room loses the benefit of that content.

That stream-from-computer function is also the way you can listen to your iTunes music collection on the Apple TV, via the Home Sharing function. It works well enough, but I miss the great default screensaver slideshow from the old Apple TV that featured all your album covers. On the new version, the default is a bunch of generic fuzzy-animal pictures. After you’re fed up with polar bears, you can change it to a Flickr collection or a few other options, but I want my album covers back. Also, the controls are so limited on the sleek aluminum remote that comes with the device, that in big music collections, it’s really hard to quickly locate the song you want to hear. Home Sharing also lets you watch your photo collection on the big flat screen.

Apple has software called AirPlay that allows you to stream the content (music, photos, video) from any computer within range, including those of visiting friends—it would also allow you to get internet content (Hulu/Rhapsody/Spotify, etc.) on the TV. AirPlay won’t be fully implemented until November, so I didn’t test it. I did try out a new version of the Remote app that allows you to control the Apple TV from your iPhone or iPad. It improves navigation and you can sit on the couch and control an iTunes music collection from the iPad more effectively.

Even with its limitations, the Apple TV will be a welcome stocking-stuffer for anyone with an iTunes collection who has not previously sprung for a device that connects a TV to the internet. But if the Apple TV indeed has (as reported) a built-in iOS that can run iPad and iPhone apps, turning it on would change the equation dramatically. That would open up the Apple TV to any number of cool applications—basically every kind of digital content would be available via the Apple TV menu. A creative community unleashing thousands of clever apps could make Apple TV much more than a hobby.

Authors: Steven Levy

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