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Summary:

While there’s excitement over the supposed 99-cent TV show rentals on the new iTV, my belief is that won’t be enough to make iTV a success. There are a few other important things Apple needs to do to make this device more than just its hobby.

While there’s excitement over the supposed 99-cent TV show rentals on the new iTV, my belief is that won’t be enough to make iTV a success. As I write in my weekly analysis over at GigaOM Pro, there are a few other important things Apple needs to do to make this device more than just its hobby.

Besides the need for creative price bundles for shows and TV-optimized apps, Apple iTV needs FaceTime.

Those who follow GigaOM Pro know we consider video communication a big opportunity. In fact, we forecast the market will go from practically nothing today (less than half-a-million TV-based video calls in 2010) to 2.7 billion TV-based video calls in 2015.

Ok, it’s big, but why should Apple be involved in this market? It’s quite simple, really:

  • First off, it neutralizes Google and Skype. Google will most certainly push video chat into Google TV, and Skype is already pushing hard into this market. As we’ve written over at GigaOM Pro, Skype’s SkypeKit platform is Skype’s attempt to introduce its VoIP and video communication, as well as potentially other services and applications, onto CE platforms.
  • Second, it brings in a whole new demographic. While my mom and dad haven’t purchased an Apple product since the Apple IIe of my youth, I’m pretty sure they would consider a good, low-cost video-chat device like an iTV. Why?  They can’t get enough of talking to my kids on Skype video, and I am sure that there are millions of others like them who would embrace high-quality video chat on TV.
  • It’s a differentiator from the cable company. Sure, Apple didn’t get all-you-can-eat $30 video subscriptions, but video chat done right could be hugely popular, and given how slow traditional cable providers move, Apple can establish themselves with a very addictive service while Big Cable spins its wheels.

I’m not entirely sure Apple will introduce Facetime next week at their big event, but they should. No one has been able to do video chat in the living room right just yet and, at least for the next six months, it’s Apple’s market for the taking.

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Image Source: flickr user james.thompson

  1. While FaceTime would be sweet, where you gonna get the camera from for the Apple TV?

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    1. @Sean – I think it would need to be an accessory. I think building in FaceTime capabilities and have add-on cameras for under $100 would be fairly compelling.

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  2. It would certainly be interesting to see how FaceTime would get used if it was incorporated into the iTV. I’ve interviewed a lot of business video-conferencing users as part of my PhD research, and whilst the high-end, telepresence-style, suites tend to be loved – the more traditional facilities are still viewed as a necessary evil. I think if Apple were to do this, they’d have to do it well. People’s tolerance for bad quality isn’t that great when it comes to video communications – just a few bad video calls, and they’ll revert back to whatever they were using before.

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    1. The reason old-style video conferencing is disliked is it’s historically be costly and not always very easy to use or implement. I’ve used very expensive T1 based Polycom video conferencing that didn’t work well at all.

      Contrast that with best-efforts Skype video chat which people love, usually because it’s free, or FaceTime, which will likely have similar appeal. What is unclear to me is how high-quality FaceTime would be on a big-screen TV, but even if its not great quality but decent quality, and still free, I expect it could be very popular, particularly if they allow Mac/Browser to iTV/FaceTime chat.

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  3. I think Apple sees Facetime as primarily applied in mobile/social. This is the direction of the TV ads. In “Wired”, Levy gets it when he writes “Video calls aren’t for people to see you. They’re for people to see what you see.” This would be a typical Apple twist on what everyone else is thinking.

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  4. “Compelling?” Really? I started thinking about if I would want to sit on my sofa and video chat casually that way, and decided definitely not. The only advantage I see is that couch potatoes wouldn’t have to get up off the sofa to answer a call, which is hardly “compelling.” Most people would not want to be seen the way they look while they are lounging on the sofa. There’s a reason voice calls and texts are so popular and video calls are not, and that’s because you don’t have to reveal everything on a voice call. You can sit in your underwear and do it, or scratch your balls while you do it, or do whatever you want. Imagine having to think, “let me change my clothes so I can answer the phone.” It’s a ridiculous imposition into a person’s home life. It’s fine for a special occasion but you make the argument that it’s the “next big thing.” I disagree.

    The one thing it would work for is, obviously, things you might do on the sofa that you would want to show to people, but most people already have the webcam pointed to their bed for that.

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    1. Pretty much affirming my first response to the idea.

      I video conference + just plain old friendly video calls with friends on a daily basis with my iMac. I intend to do the same with the next-gen iPad.

      I suppose the living room conversation might be useful to large families with enclaves scattered about the planet. How often is that needed or useful?

      Nope. I’m looking forward to a new AppleTV for most of the reasons most folks have suggested as additions and improvements. My fingers are crossed for 1080p – though even that’s not a deal breaker.

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  5. [...] Until now, FaceTime was available only on Apple’s iPhone 4 and its most recent iPod Touch, which both have front and rear-facing cameras. Jobs said that Apple [...]

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