TV wars loom as Apple takes aim

 
Steve Dinneen
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Apple last night launched a revamped on-demand TV service it hopes will help it smash into the online rental market.

Apple TV allows users to rent episodes of hit US shows like Glee for as little as 99¢ (64p) and play them through their TV. The device could catapult Apple into a market currently dominated in the UK by firms such as Sky, Virgin and the BBC.

It announced tie-up deals with ABC and Fox, with Steve Jobs saying he expects other major content producers to jump on the bandwagon soon.

The release is a shift in strategy for Apple, which has previously allowed users to buy, rather than rent, TV shows. To date it has sold 450m episodes, compared to 11.7bn songs downloaded from its iTunes platform.

It is the second incarnation of the product, the first released to critical acclaim but public apathy in 2006.

The new version is sleeker and just a quarter of the size. But the main difference is a steep drop in the price from $229 to just $99, with a pricetag of £99 in the UK.

Apple chief executive Steve Jobs said: “This tiny, silent box lets users watch thousands of HD movies and TV shows, and makes all of their music, photos and videos effortlessly available on their home entertainment system.”

Analysts told City A.M. the low price suggests Apple is more interested in breaking into the market than generating serious revenue through the device.

It is also unlikely that Apple TV will be able to dominate viewing habits in the same way it has revolutionised the way we consume music.

Ian Maude of Enders Analysis said: “This will take some business away from the big TV players. It is part of a slow shift towards paid-for content so that will chip away at the BBC and ITV.

“But it is in more direct competition with Sky and Google [which launched a new TV service earlier this week]. It is a very long-term game. At the moment on-demand rentals is a very small market. It’s also a very competitive one and it will be difficult to take customers from the big players, especially as it only has deals with two partners. There is absolutely no chance of Apple becoming dominant in the TV market – it is about chipping away at its rivals.”

Apple announced a host of other products, including a new range of iPods. It will also release a new version of iTunes which will feature a social networking feature described by Jobs as “iTunes meets Twitter and Facebook.”