If I take refuge in ambiguity, I assure you that it's quite conscious.

-- Kingman Brewster, Jr.

In the last Hidden Dimensions, I described how the HDTV and TV broadcast industries are fragmented, fundamentally broken, and all too self-serving. I recapped Apple's tendency to analyze these kinds of markets and provide fundamental, customer-friendly solutions. The goal, explained by Jonathan Ive, is to make us feel whole again. In that respect, I suggested that Apple TV would become a successful product.

However, there were some details that I didn't have space to get into. It's time to look at those in a practical way.

Format Issues

The biggest gripe I saw from the reader comments in the last column was that Apple TV is fundamentally tied to iTunes and that only content in H.264/MPEG-4 format, purchased via (or dragged into) iTunes can be narrowcast to the Apple TV unit.

This is likely the case for now, but to describe it as a product flaw is akin to complaining that a DVD player cannot receive Sirius Satellite Radio. That is, just how universal must a device be to become an attractive product? Apple has to ask itself this question when designing a device. For example, why don't all iPods contain an AM/FM radio receiver?

The answer is that good product design starts with limiting the scope of the product to the point where it solves a specific problem gracefully and doesn't try to be all things to all people. We saw the same thinking in the incremental development of Mac OS X. Cheetah, Mac OS X 10.0, had some serious limitations. But its scope was adequately constrained so that the product became shippable within our lifetime.

In recent years, it didn't require an audiophile or TV nutcase to have several different devices directed into their A/V stereo system: A cable or satellite feed, a TiVo, Replay or some kind of DVR, a DVD player, and perhaps, for some, a VCR to play back movies not yet (painfully) repurchased in DVD format.

While integration is nice, I don't believe that the apparent inability to direct content from our DVDs, via the optical drive, to the TV via Apple TV is a deal breaker. After all, how hard is it to drop a DVD into a direct-attached player and watch a movie? We've been doing that all along.

Strategic Issues

Perhaps more important is the idea that the current inability of the Apple TV to extract content from anywhere but the iTunes library is not a design limitation but, rather, a strategic tool and opportunity for Apple.

Technically, it wouldn't be hard to write software that could read a DVD movie, pipe the stream out to the AirPort, and on to the Apple TV. Other video subsystems, such as Joost or Web-based TV could also be funneled to the Apple TV. Apple may have set up a security layer that allows only them to open this gateway. So if you, as a content provider, want to make your content available via Apple TV, you must work with Apple.

Now that's just my informed opinion, but it makes a lot of sense because, as I said in the previous column, Apple tends to enforce some very rigid standards for user interface excellence and coherence. As we've seen with the iPhone, you play with Apple for that mutual gain -- or not at all.

Sooner or later, all these small-time partnerships and video delivery mechanisms will collapse. Customers don't have the time or inclination to go hunting for everything they might want on DirecTV, Comcast, Time Warner, Dish Network, Amazon, Wal-Mart, Joost, YouTube, MySpace, AOL Video, Yahoo! Video, BlipTV, ABC.com, and BrightCove ... to name a few. Sooner or later, the most sensible and most innovative of these services, like Joost, will parter with Apple, just to rise above the crowd.

Access to Content

One of the troubling aspects of the Apple TV is that it is capable of generating 720p HDTV output, but there is currently no HDTV content available for purchase in the iTunes Store. It's been discussed here at TMO, on the news side, about how the movie studios would very much like to sell you a Blu-ray or HD DVD disc and make that your preferred source of HDTV. At $35 a pop. With any luck, customers will grudgingly replace many of their favorite DVDs with HD discs, and that, of course, has everyone upset about the perpetual need to repurchase content. Even so, the industry appears headed in that direction, and so giving Apple a license to sell HD movies would be self-defeating for the movie studios.

Microsoft has taken the position, rightly or wrongly, that they will step up to the task of managing the DRM within Vista. That way, if you have the right hardware, you'll be able to watch Blu-ray and HD DVD movies from within Vista. Microsoft has been smart about this, perpetuating their monopoly by kowtowing to the movie studios who appreciate Microsoft's 90+ percent of the PC market.

With that, new questions arise. Are the movie studios confident that Vista can protect their IP? Are some studios, thanks to individual personalities, willing to experiment with Apple, fearing the consumer backlash to onerous DRM on the PC side? Are they trying to cover their bets? If so, then Apple would become the step-child of the 21st century's HD revolution, always looking in from out in the cold, always somewhat excluded.

One Way Out

One strategy is to convince the industry to do away with DRM altogether. This levels the playing field. It might be seen as a desperate gamble by Apple to say, okay, we'll unlock the tie-in between iTunes and iPod, let customers buy music from us, and play it on any device they want. We'll give that up with the prospect that the movie industry will also get to the notion that DRM is harming their business.

At that point, all the complex technology of Vista's DRM goes out the window and becomes a noose around Microsoft's neck.

That would be nice, but I believe the chances of that, in the near term, are slim. The movie industry has had much more time to think this through. They know that in a few years, Internet speeds will make it trivial to move HD content around the globe in minutes, not hours. They've made their stand, and that is while the DRM may be broken from time to time, and while people will gladly watch SD content that's been pirated, HD content is going to cost. Most people, most of time, won't be able to pirate HD movies.

Another Way Out

As I mentioned before, Microsoft has built a complex OS with Vista. Not only does it have to do what XP did, but it has to do a much better job of protecting users from Internet vandals and simultaneously protect the IP of what they call Premium Content. It's a complex undertaking and a high risk solution.

One possible scenario is that Apple will continue to develop Apple TV for SD movies and TV content in association with partners while the movie industry shoots itself in the foot by believing that Vista can ultimately protect their valuable HD content. Customers could just say, the heck with all the DRM in Vista and go buy HD players, PS3s and Xboxes to view their movies. We could easily get to a situation in which Apple TV is easy, dual mode Blu-ray/HD DVD players are easy, PS3 is easy, Xbox is easy, DirecTV with 150 channels of HD is easy, but messing with Blu-ray discs on a PC connected to an HDTV is hard.

Over time Apple will navigate these heavy seas, changing the capabilities of Apple TV to strategically position themselves as the more practical, elegant solution. Expect more partnerships and more mechanisms to move content from the Mac to your HDTV. In the meantime, the ambiguity of some of the Apple TV features, such as the USB port, probably reflect Apple's closely-held plans for degrees of freedom in the future wars.

Meanwhile Leopard, well engineered and soundly constructed, will simply be a joy to use. In the end, that will be the tool that enables Apple to get where they want to be.