Airplay is Apple’s ‘Go to Market’ Internet TV strategy

Jobs’ war on Flash video and growing  iOS device line have all led up to this…

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Steve Jobs told the AllThingsD audience a few months ago that the reason no one including Google and Apple have been successful in the TV space is that they lacked a successful ‘Go to market TV strategy’.

Apple has that strategy.  They’ve been working on it since the original iPhone release three years ago.  But you won’t find much of it on their website touting the new AppleTV.

The new AppleTV in its current form is basically a Roku box that streams content from various places on the Web.  It does Netflix, iTunes, Youtube photo albums, etc. and it also can stream media from computers around the house. It costs a paltry $99.  That is close enough to the ‘almost free’ that Steve Jobs talks about above.  But it isn’t really bringing all of the video on the Internet to your TV is it?

Sure, you can search YouTube directly from the AppleTV.  But it is a hassle too pull over YouTube URLs when you find something cool while browsing the web with your iPad?

The stated use above isn’t how people are going to use their AppleTVs the majority of the time.  In fact, what’s on Apple’s site right now is a red herring. This will be just one way people use AppleTV.  I think a much bigger use will be what puts these in almost every house in America – or at least gives it the market share that the iPod enjoys.

AppleTV is a Airplay-compatible device, meaning it can stream video/sound from other Apple devices. We found out last night that it isn’t just iTunes content that it will be able to broadcast.  Any H.264 content from the web can be broadcast over Airplay to your HDTV.

That includes any video that can play on your iOS 4.2 device, like: Facebook video, YouTube, Netflix, Videos, BBC News, MLB and really anything else you can watch on your iOS device.  That also includes videos built into Apps and magazine subscriptions too.  All of this can be beamed to your AppleTV via Airplay.

You know what won’t play over Airplay?  Flash…

Joel Johnson gets it.

Apple’s three year campaign to get content producers to shift from Flash to H.264 has been largely successful and is now at a tipping point. You can now view ‘most’ video on the web on H.264.

That means you can watch most Internet video on AppleTV over AirPlay.  The day AppleTV is released, you’ll be able to watch free SD clips of shows that appear on ComedyCentral.com like the Daily Show and Colbert Report via Airplay.  You theoretially should be able to watch Hulu Plus so long as it is encoded in H.264 (and doesn’t get blocked once the networks figure out what Apple has done here).

Killing Flash video (or at least making content providers offer H.264 alternatives) is what made all of this all possible. Whatever video you watch on your iOS device, you can now watch on your  HDTV.

But Apple sells shows like the Daily Show in iTunes.  Won’t this hurt Apple’s business?

Steve Jobs mentioned that AppleTV would only play HD video from now on.  That is the differentiator.   You want web/iOS device SD quality clips?  That’s free over AirPlay.  You want 720P full, uninterrupted shows/movies?  iTunes/Netflix get some $$.  The web becomes a marketing platform for Apple’s up-selling.  See an SD clip of the Daily show?  Like it?  Buy it on iTunes and get the 720P full version.  Very little friction.

That is a “Go to Market Strategy”.

And that brings us to remotes.  That little aluminum thing that Apple includes with the AppleTV?  That’s good for browsing Apple’s content on the AppleTV and in your house, but the best way to pull content from the web is going to be from your iOS device.  iPad, iPod touch and iPhone are not only going to be your remote, they will be the device that streams Internet content to your Airplay AppleTV.

The living room experience that Apple envisions is a consumer with an iPhone/iPod touch/iPad in their hands searching the web for content to explore while watching TV.  If you find something interesting that you want to share with the family, you pop it on the screen via AirPlay.  If you really like it, you make a purchase and get a full HD version.

It is easiest to think of of Apple’s TV as more of a video interface for iOS devices.  Apple could have given AppleTV another hard drive to store music and video, but that is what your Macs, NAS and iOS devices are for. A 160GB portable hard drive in bulk is about $20/pop.  A lot of people would have loved that option (and hackers are eyeing that USB port for just that sort of thing).

But Apple doesn’t want you storing content on your AppleTV.  You can think of it like a video version of the Airport Express’s audio streaming capability.  They want you to stream that content from your other iTunes shares around the house.  That keeps AppleTV cheap, small and extremely miserly on power (did you know it uses only 6 watts of power – less than even a florescent light bulb!)

So what is the new AppleTV really?  It is almost everything it was before, but in a much smaller package and less than half the price.   But that isn’t enough to make it a game changer.

If you then add its ability to play most of the web’s video content through an easy to use, intuitive interface…

…well, then it may not just be a hobby anymore.