The Internet is buzzing with the news about Apple’s iTV. At the very least, this is a refreshing change from it buzzing with rumors about iTV. We all know that Steve Jobs is the master marketer of our time; he can turn a sow’s ear into a silk purse just by talking about it. The facts don’t always support the assertions, however. (See my analysis of the claim that the iPad is “the best… movie-watching experience ever.”)

So here comes the new iTV. It’s a little box – much like a Roku or other boxes — that connects your TV to the Internet through your local network and a broadband connection. And it lets you stream content from the Web. And you can now get that content from iTunes. We know iTunes; that’s the service that made it safe and simple enough that millions of people would actually pay for the music that they download. But one difference here is that you only rent the video content from iTunes. TV shows cost $.99 each, and movies cost $2.99 for older standard definition titles to $4.99 for new HD releases. Once you rent a show or movie, you have 30 days to start watching, but then you have to finish within the next 24 hours (48 hours for a TV show). Huh? Oh, and the TV shows are only from ABC (where Jobs sits on the Board of Directors) and Fox. This makes the selection available on Hulu seem like a feast.

But what about Hulu? Well, at least with iTV you don’t have to watch commercials, which is an advantage that it shares with the Netflix streaming service. Netflix doesn’t (yet) give you access to many recent releases, but the shows don’t expire once you start watching them. And all you need is an $8.95 monthly subscription. Rent two shows a night from iTunes for one work week and you will have spent more than you would for the Netflix subscription that would last the whole month.

But here’s the really crazy part; Apple is including Netflix streaming on the iTV. And YouTube access. I guess the idea is that people may watch a lot of the free and flat-rate stuff, but come to iTunes for the latest releases that they can’t get from the other services.

The $99 price for the iTV box makes sense, or at least a whole lot more sense than the price of the original Apple TV that it replaces. But I don’t see the appeal of the rental model for the content. I think that a lot of the viewing public will prefer the all-you-can-eat terms of Hulu (with the commercials) or Netflix (with the low monthly subscription) over the Apple offering. Aside from the loyal Apple fans, I’m not sure who is going to buy this. I can’t see it becoming the same sort of hit that the iPod or iPhone were when they were released.

Posted by Alfred Poor, September 3, 2010 6:00 AM