Apparently, MSOs and other video providers don’t need to worry about AppleTV infringing on their business model – at least for the short term. That is, if you believe the latest research from Sanford C. Bernstein & Co. Inc . Bernstein & Co see a variety of hurdles in Apple’s way that will prevent AppleTV from posing as a serious threat to the traditional pay TV model. Hurdles that were cited include content availability, set top box (STB) clutter, and quality concerns. The report does stress that these are near term hurdles, and Apple may adjust its strategy, causing more concern to video providers in the future. Such a strategy could include positioning AppleTV to replace the current video service provider owned STB. Success with such a strategy could have serious competitive implications for video providers of all kinds. While there would be some advantages to STB replacement for video providers (namely cost reduction), the downside risk may prove to be more expensive. Removing the STB removes a key ongoing customer experience – interaction with the STB and its middleware/IPG has tremendous long term value. No one wants to concede that to a competitor.
See this Light Reading article for more analysis.