According to Peter Farago of Flurry, social games can now be considered real competitors to television viewing, comprising “a daily audience of more than 19 million who spend over 22 minutes per day using these apps.” Comparing that group to television viewing audiences puts social gamers somewhere between Sunday Night Football and Dancing with the Stars, and about 4 million “viewers” away from the top-rated America Idol.

Farago is quick to point out that Flurry only measures around 20 percent of the 250,000 apps currently available for the iOS platform, and since Flurry only measures social networking and gaming apps, it’s likely the true size of the gaming “audience” is much larger. According to 148Apps.biz, the number of games currently found in the App Store is around 40,000.

However, it should be pointed out that planting crops in FarmVille and watching football are not necessarily mutually exclusive. For that matter, those 22 minutes a day are arguably just as likely “saved” minutes that might be lost waiting in line, between classes, or on break at work. A dedicated television audience really is a different beast altogether.

The idea that advertisers might be better off spending their money in apps than on television is, as yet, far from proven, but that doesn’t mean this isn’t a good indicator that we might be on that path.

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The Current Marketplace

Consider how you currently watch TV, which could be through broadcast or cable television. If you watch cable, you pay a fee to a provider (like AT&T), which allows you to see certain channels based on your subscription (though that model doesn’t seem to be panning out so well anymore). The providers pay a portion of your subscription fees directly to the networks (an average of about 26 cents per channel). Networks make additional money with the ads they run on their channels as well. If a network doesn’t show ads, you can expect they charge the cable provider substantially more than 26 cents per channel, and the opposite is true if they show an average amount of ads. This is all relative and pretty much a standard business model.

How Apple Could Shake Things Up

With the introduction of the App Store, we’re starting to see how some industries are shaking up the status quo. For instance, consider the magazine industry. Wired now provides its app directly to consumers, and can sell a digital version of its magazine at a comparable price (per issue) to the newsstand price. Yet, without having to incur the printing costs behind it, and even while giving Apple 30 percent of the revenue, Wired pockets a lucrative profit.

Can the same model work for the television industry? Network providers already provide their content through iTunes, and, through negotiation, have arranged to sell content at $2-$3 per episode. Rumors of 99-cent TV shows have been rampant but unfulfilled, simply because of the tough negotiations required to make it happen. Could the solution be to simply bring an App Store directly to the TV? If so, similar to the Hulu or Netflix app, a network provider like HGTV  could provide its own app for free and charge within for in-app content, like episodes of a show. If it wanted to provide streaming content of the past few episodes for free, it could do so. As long as it approves of the 70/30 profit split with Apple, it would maintain a lot more control over its content and pricing. The networks would be happy, and Apple would be happy. Networks could still run ads as they wished and earn even more profit.

Who would stand to lose from this? At the outset, nobody, but if such a solution were to become mainstream, then cable providers could begin to see a dip in subscriptions. Why would most consumers pay a monthly fee of $30 to over $100 if they only want to watch a certain show or a certain network? Instead of paying for needless extra content that consumers never watch (based on their own viewing habits), they can pay for content that matters to them. The providers are aware of this, which is why many of them also provide internet service (think about Verizon, Comcast (c cmcsa) and AT&T).

I think an App Store on the TV could really revolutionize how we watch and engage with content.

What are your thoughts? A new Apple TV could revolutionize the television experience. Do you think it will take off? I’d love to hear what you think, so please share your comments!

Related GigaOM Pro Research: 3 Things Apple iTV Must Do to Succeed

Netflix (Free, Subscription Required)

Netflix has made a name for itself with its excellent service, and many were surprised when it announced it would be coming to the iPad before the iPhone (on launch day, too). The Netflix app is basically a one-window browser that loads a tailored version of the site, allowing you to watch any movie in its instant-watch collection. You can also manage your movie queue, adding or deleting movies as you please. The app isn’t very polished, but it works. I’ve watched the entire three seasons of Avatar: The Last Airbender on it without incident. The app is free; the subscription, however, isn’t, and it’ll run you $9 a month. There’s a free 30-day trial, though, so you can evaluate whether you like it or not. Personally, I love it.

Hulu Plus (Free, Subscription Required)

Hulu, on your iPad is something that’s been anticipated for a long time. Full access requires a subscription to Hulu Plus, which will run you $10 a month. There’s a free gallery that has single episodes of some good shows like 30 Rock and Parenthood, which should give you a good idea of whether you want to pony up the $10/month or not. Unfortunately, a Hulu Plus subscription will not exempt you from the periodic ads that appear during playback.

ABC Player (Free)

You can watch full episodes of selected ABC shows, like 20/20, Desperate Housewives, and (my favorite) Modern Family. At last count, there are 33 evening shows, four daytime shows, and any specials that appeared within the last few months available. You can also view ABC’s schedule to find broadcast times for shows that aren’t on the list.

Flixster (Free)

Flixster shows you movie times at your local theaters and lets you buy tickets. It also shows ratings from Rotten Tomatoes and lets you play trailers for upcoming films. Sometimes it can be annoying, like when it pops up an advert for a film that you have to dismiss before you can use the app.

IMDb (Free)

IMDb is a huge database of movies, television shows and actors, so when you’re watching a movie with Netflix and want to know more about it, you can pop over to IMDb and find all the information you could ever want to know, like which actors appear in the movie, reviews and trivia. It also has local showtimes and trailers, like Flixster. The app is fast, well laid-out, and free.

Yahoo! Entertainment (Free)

Yahoo! Entertainment has an interesting interface that you’ll either love or hate. On the main screen is a living room, in which an ottoman is parked close to a glowing television, with a magazine, a TV guide, and a DVD case splayed out on the ottoman. Tapping on each item brings up a different part of the app. The magazine takes you to Yahoo! Entertainment News, the TV guide takes you to (what else?) a TV guide, and the DVD case takes you to Yahoo! Video. Each of these has their own unique interfaces, which are all quite attractive. The big thing is the TV guide, which shows you your local programming based on your service provider, and you can hide individual channels.

What apps do you use to keep yourself entertained? Tell us about them in the comments.

In music, the top-selling album, “Only By the Night” by Kings of Leon, was also chosen as album of the year. Lady GaGa was best new artist, while Michael Jackson was artist of the year. Since the iTunes Store has a catalog of some 10 million songs and roughly accounts for a quarter of music sales, at least in the U.S., both the popular and editorial choices make sense. With movies and television, not so much.

“Up,” from Disney, whose second-largest shareholder and board member is Steve Jobs, has the top corner spot among best movies, not that there’s anything wrong with that. Arguably, what is wrong is “Pineapple Express” being second in top sales and rentals. According to BoxOfficeMojo, that film ranked 34th in 2008, though it was only released this year on disc. However, the highest-grossing movie of 2009, “Transformers: Revenge of the Fallen,” released on disc in October, isn’t yet available at the iTunes Store. Clearly, in terms of film, “best of” comes with a “what he got” caveat, as it does for television. When your best-seller list for television includes “Star Wars: The Clone Wars,” you know you have a problem.

It’s a problem Apple has been trying to address for years, most recently reported as plans for a subscription-based model for video content. For $30 a month, one would get all the television one could watch. So far, the networks, and for that matter the movie studios, have largely remained outside the iTunes Store, but that’s true for pretty much every other digital store. In contrast, the App Store is exactly where application developers want to be.

Following the release of the “funnest” iPod touch ever, we have the best and most popular applications of 2009 divided into games and other apps. Apple appears to increasingly see gaming as intrinsic to its mobile devices. Critics of iPhone OS as not being a viable and commercially profitable gaming platform take note. All but one of the 10 best-selling games for 2009 costs $4.99 or more, and many of them, like The Sims 3, originally sold for $9.99.

Among other apps, MLB.com is not surprisingly popular, probably because it’s free right now, though $9.99 for the season. More surprisingly, MobileNavigator North America ranks among the most popular of applications, despite a price of $89.99. TomTom U.S. & Canada at $99.99 is also in the top 10, as are SlingPlayer Mobile and Golfshot: Golf GPS, both $29.99.

Again, the point is that the App Store is not a place with 100,000 free fart and flashlight apps, but rather a store where serious money can be made at the right price for the right content. If only the movie studios and television networks realize that — perhaps the iTunes Store “Best of” lists for 2010 will be just that, rather than the best of what’s available.

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First strike, although it doesn’t affect users in the U.S., international iPhone owners may be disappointed in the library of available content. Unless you’re a huge fan of Naruto, which seems to make up all of the Anime video section. Many services encounter problems when trying to pick up international distribution rights for all types of media. Pandora is one high profile example, as is Hulu for video. That doesn’t mean there won’t be more content available in future. The Xbox Live Marketplace has brought video to Canada and other markets, albeit behind their American launch.

A second concern is the limitation of playback to devices connected via Wi-Fi only. This one basically dashes my hopes of having another distraction for the commute. And really, when you think about using the Joost app beyond the first couple of days, I wonder if the lack of 3G or EDGE support doesn’t become a deal-breaker. Generally, I don’t get the urge to watch television or movies on a tiny screen when I’m at home, which is where I use Wi-Fi the vast majority of the time, and which is also where I have a 32″ LCD TV that won’t provoke serious neck cramps.

A third issue might be technical concerns, as some users over at TechCrunch have reported connectivity issues, and audio dropping out. During my own tests with the app, I haven’t run into the same problems, and this one should be fairly easy to resolve with a version update.

It’s not all thorns, of course. There are also some significant roses. While people complained about the hit-and-miss nature of the library when the service initially launched for the desktop, there is some great content available. CBS is fairly well represented, and although the Movies list is relatively thin, there are some classics available, like Starship Troopers, which I love dearly.

While Joost may not have the best library among streaming video media services, their iPhone app launch is good news for everyone. It signals a significant maturation point in the lifecycle of internet television, and paves the way for industry leaders like Hulu to enter the fray. Japanese markets are already enjoying TV on their mobile devices via 1seg antennas, and there’s no reason we shouldn’t be enjoying the same sort of thing on this side of the globe. All that remains is for content providers to wake up smell the decline of tradional cable and satellite, and fully embrace the streaming revolution. Everyone stands to gain, the average consumer most of all.

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These days, Sony seems lost.  They missed out on the digital audio player market after being the dominant player in the portable audio market.  The PS3 has not been warmly received.  The XBOX 360 was given a one year head start and is hitting its stride while the PS3 languishes.  The Nintendo Wii is the darling of the casual gamers with its low price and is the antithesis of the PS3 in styling with its compact white form-factor as opposed to the PS3′s gigantic black curved box.  Sony is trying desperately to make the PS3 the only set top box you need in your entertainment center.  It’s a gaming machine, a next-generation DVD player, and will soon be a DVR.  The PS3 is either a jack of all trades or is having an identity crisis.

Apple hasn’t seemed lost in years.  It is the leader in the DAP market and has quickly become a major player in the cell phone market.  With Apple dropping “Computer” from its name, Apple is clearly focused on the consumer electronics market.  So why would Apple even bother adding a DVR to its lineup of gadgets?  The argument against an Apple DVR is simple.  Apple and studios make money when people purchase their shows or movies from iTunes.  A DVR would diminish purchases from the iTunes store.  Plus, the iTunes DRM locks the content to Apple products like the iPod or the Apple TV.

The Apple TV

However, there is one thing that makes me think that Apple could easily come out with their own DVR.  Apple is a hardware company.  The Apple TV, Apple’s hobby, is the most likely candidate for DVR functionality.  The device was quickly upgraded with a larger hard drive and new software features.  Why would Apple bother negotiating with television and movie studios for content when Apple could just make a device that records content?  Apple could easily add the same DRM to keep Apple recorded shows on Apple products.

There is one thing I can’t shake.  Has Apple ever added such a major function to any of its preexisting products?  The iPod may have changed in physical dimensions, added a color screen and revised its clickwheel, but it has not added major new features (other than video playback).  The iPod still lacks an FM tuner, wi-fi and bluetooth even though many competitors have these functions.  The iMac has been through several aesthetic changes, but once again, the all-in-one computer is still just an all-in-one computer.  Apple’s products do not normally evolve into new products.  Apple is a company that jumps from one product to the next (look at how they killed the iPod mini for the iPod nano).  This suggests that if Apple were to do a DVR, it would not be an upgraded Apple TV, but some other product.

Maybe not…

I do not think that Apple would come out with a DVR of its own.  Apple is on a course to become a content provider like Comcast or DirecTV.  Their iTunes model is similar to buying cable a la carte.  If Apple has a direction, a DVR would be a step in the opposite way.  It appears as if Apple sees content coming through downloads and not from recording television programs through traditional content providers.  Just as Apple has declined to enter the bargain basement PC market, Apple will most likely decline to enter the DVR market.

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