Why Apple TV is a Ticking Time Bomb for Big Cable

Make no mistake: Apple (s aapl) is in the process of staging a coup. That’s what a very close look at the new Apple TV reveals. Despite its somewhat innocuous appearance and diminutive stature, it’s a weapon of war. The opponent? The entrenched cable and satellite TV service providers.

That’s not the surprise, though. Even just by introducing video purchases and rentals in iTunes, Apple was ostensibly taking aim at traditional means of TV distribution, so they’ve been contending with cable and satellite for quite a while now. The difference now is that the Apple TV could be the weapon that sways the balance overwhelmingly toward Apple’s side, guaranteeing the company victory.

Now, I don’t own one of the new Apple TVs. In fact, I went to great lengths to describe the reasons why I probably never would. But that was before a couple of things came to light:

  1. The Apple TV shows signs of supporting apps
  2. The extent to which AirPlay would be supported across apps became apparent

Alone, either of those would be enough to have Time Warner Cable (s twc), et. al. shaking in their boots. Taken together, it amounts to advance warning of an imminent invasion, which is why the aforementioned Time Warner is being coy about 99-cent rentals. Grasping the outstretched hand of your obvious successor isn’t really an easy thing to do, especially when doing so would speed along your demise.

But 99-cent rentals aren’t the real beachhead. They’re a gamble for more interim revenue, and possibly even an olive branch, but it’s not something Apple’s banking on in the long-term, because they have a means of cutting out the networks and cable providers altogether if they won’t play nice. That means is AirPlay, and to a lesser extent, apps.

AirPlay will allow anyone to play whatever content they can view on their iOS device on their Apple TV. Where that once still represented a relatively limited content pool, Apple’s recent relaxation of App Store restrictions has allowed apps like CineXPlayer and VLC onto the iPad, which means playback of more video formats is here and set to improve in the future. While Cupertino would probably rather you still get your media the legit way from its iTunes store, it’s becoming more apparent that if it means selling more hardware, the company is willing to look the other way regarding how users acquire what they watch, especially if it can’t strong-arm TV and movie content providers into playing by its rules.

By avoiding having actual apps on the Apple TV initially, Cupertino is hoping to have its cake and eat it too. AirPlay allows them to access the media content of any app, in theory, which also has the advantage of encouraging iOS device sales. At the same time, it keeps the Apple TV platform relatively closed, something which should appease the content providers and avoid direct conflict for the time being. Now, if providers pull out in protest of Apple’s growing dominance over distribution, it has AirPlay and a more format-friendly iOS in its pocket to force them to make nice, lest iOS users turn to less legitimate sources for their content.

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