While Apple worked out deals to offer content from News Corp. (Fox) and Disney (ABC), it hasn't yet reached agreements with other major production studios. Over time, I expect that to change, though it may take a while.
Unfortunately, video and audio quality is inconsistent, and it varies greatly depending on the source and bandwidth. Netflix fluctuates between very good (broadcast-quality HD in 720p) and merely so-so (pixelated, though better than most YouTube videos). YouTube videos are generally of low quality, though HD support is growing. The iTunes store movie and TV show rentals vary in quality as well. But the HD videos are generally as good, if not better than, broadcast-quality HD. One helpful tip: If you connect to your network over Ethernet, you're more likely to get a better picture with streaming content.
The good news is that you don't have to worry about skipping commercials with the content you can access now. And the audio can be surprisingly engrossing, depending on the source -- Apple TV outputs 5.1 surround sound when the option is available.
Photo slideshows are also well done, with a variety of options for transitions that really look great. There are times, however, when an image is blown up full screen due to the orientation of the shot, and the resulting image is a bit pixelated and soft. Other times, the focus of the shot is missed -- especially during the Ken Burns transition effects. But these are minor quibbles. Slideshows are a great way to display photos you've taken and put them on the big screen.
One more note: The best part about Apple TV hasn't even arrived yet. AirPlay, which will be available next month as part of the iOS 4.2 update, will allow you to stream content (photos, movies, TV shows) from an iPhone/iPad/iPod Touch directly to the Apple TV. The ability to flick content from one screen to another reminds me of Minority Report; the concept is that forward-thinking. I look forward to testing AirPlay as soon as it's publicly available.
The new Apple TV addresses many of the issues that had made the previous version a niche product. Gone are any synchronization errors, since syncing content from a computer to the device is no longer necessary or even supported. Gone is a confusing set of menus and submenus that buried content that users had already bought -- but couldn't easily find later on.
The new Apple TV is all about streaming content from either an Internet source or your computer, instantly and without hassle. While its support for popular video formats is limited, the 160 million people already using the iTunes ecosystem will be able to use this little device with ease -- which is the point. True, the content selection isn't yet as full-featured as that offered by competitors, but I expect that to change as more studios come on board.
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