Why the Chromecast's future could be brighter than the Apple TV's

The launch of the Chromecast marks Google’s latest attempt to enter the consumer TV market—an attempt that, while still in its early stages, seems to be on a better footing than Google TV, a consumer reject since its launch in October 2010.

Google’s $35 video-streaming dongle has drawn predictable comparisons with the Apple TV—Cupertino’s perennial “hobby” that, at last count, sells some 1.5 million units every quarter. And why not? The two devices are, on the surface, very similar: They both stream video, and both are part of attempts by their respective manufacturers to dethrone the traditional living room TV experience.

The stakes are high: A 2012 report by research firm Global Industry Analysts estimates that the market for online movie streaming will reach $4.4 billion by 2017—and that doesn’t even include all the new activities that a computer in the living room could support, such as games and interactive apps. Nor is there any doubt that Google is coming in from behind: As of May, Apple had sold 13 million Apple TVs, while rival Roku celebrated 5 million units sold back in April.

Though the Apple TV has been around for years longer, the Chromecast actually looks better poised to dominate the streaming set-top box market. Apple’s offering certainly has some advantages, but Google’s plusses are better.

Skin deep

The two companies have some stark differences in how they are tackling the problem of TV-based entertainment.

The Apple TV, true to Apple form, offers a more comprehensive user experience. Even if you have never been within a mile of a computer in your life, the device is easy to use. You can just plug the little black box into your TV set, power it on, and start enjoying content in a matter of minutes, drawing from the iTunes Store’s massive library of movies, TV shows, and music. In short order, your biggest concern will become figuring out where Apple’s little aluminum remote ended up this time.

The Chromecast, on the other hand, is designed for people who already have a computer or handheld device, and prefer to bypass the traditional remote in favor of a more modern approach to consuming content. The result is not quite as slick as the Apple TV, but it comes in a decidedly smaller, cheaper, and more discreet package.

The attractive pricing may be a significant factor in its early success. “The price point makes it easy for people outside the early adopter cohort to take a chance on it,” says Alan Wolk, global lead analyst with Kit Digital/Piksel (a company in video technology and services). “The ability to then use the phone/tablet as a remote control was also a brilliant idea, as it creates additional functionality.”

Out of jail

Much more important, however, is that the two companies have taken dramatically different approaches to choosing the technologies that underlie their respective platforms. The Apple TV used to run a stripped-down version of OS X, and is today based on a similarly special-built version of iOS. Although the operating system can be jailbroken, its functionality is officially off-limits to third-party developers (the sole exception: a third-party app can incorporate AirPlay functionality for streaming or mirroring the app’s content).

Google, on the other hand, has decided to open up its platform to third-party developers, who can build their own apps using the same technologies that power traditional Web apps: The device itself essentially runs a stripped-down version of the Chrome browser and uses simple, run-of-the-mill HTML5 documents to serve its content—including playing back high-resolution video and interacting with a “sender” app that runs on a desktop or mobile device.

This should make attracting developer interest in the Chromecast much easier than for, say, other open streaming platforms like the Roku, whose third-party apps must instead rely on a proprietary scripting language. Alex Gourney, CEO of interactive fitness company BitGym, agrees: “We do advanced streaming video of exercise content, and the flexibility of being able to run an ‘app’ on the Chromecast is a big advantage over the Apple TV. It lets us do variable-speed video playback, composite audio dynamically, [and even] pull in extra content.”

Much like what happened with iOS’s App Store, the decision to open up the Chromecast could be a boon to everyone: “If a third-party developer comes up with something that creates buzz on the market and attracts a lot of users, everyone gains,” says Piksel’s Wolk. “Google, because the Chromecast becomes more popular; the developer, because they get a large market for their product; and the consumer, because they are getting the best products and many minds working on developing those products.”

Closer to flawed

That’s not to say that Google has nailed the Chromecast’s launch. For one thing, the device itself seems to be woefully underpowered. I bought one as soon as it became available—strictly for “research purposes,” of course—and my thoroughly unscientific impression is that it is significantly less capable than the Apple TV in both memory and computing speed. I would much rather have spent $50 or even $70 for a little more horsepower—after all, millions of people have had no trouble forking over $100 to buy Apple’s hardware. But of course, the price is a large part of the Chromecast's appeal, for which users may overlook such shortcomings.

In addition, the Chromecast is, by Google’s own admission, still “unfinished.” The developer documentation makes it clear that the tools used to build third-party apps could change at any time, and in a way that could render current software useless. The company’s trademark insistence on slapping a “beta” label on everything it makes has gone from cool, to cute, to sophomoric. How can developers possibly be expected to invest serious time and resources on a technology that could change under their feet at a moment’s notice?

Apple is notoriously fastidious when it comes to the programming interfaces that it allows third-party developers to use, but that’s for good reason: As former vice president of software Bertrand Serlet famously explained at the company’s Worldwide Developers Conference in 2009, these interfaces are, effectively, contracts between the company and its developers—and Apple goes to great lengths not to break them once established. This approach gives developers a measure of safety and predictability, and it’s frustrating that an engineering-centric organization like Google seemingly can’t understand its importance.

Still, that’s not necessarily a fatal weakness for the Chromecast. “One lesson we can learn from the music industry is that good enough is usually good enough,” says Wolk. “Remember when we were told that no one would listen to MP3s because the quality was not as good as CDs? Same thing with streaming. The quality may not be as good, but it’s good enough, and when it comes to media consumption, the convenience factor trumps everything.”

Huge opportunity

If Google manages to address these problems, the Chromecast could well represent a tremendous opportunity for the company to gain a significant position in the market. (The Apple TV and Roku’s devices dominate set-top streaming, with other players basically fighting for scraps.)

Until now, the closed nature of platforms like the Apple TV has meant that consumers must depend on incumbent players to change the way they use their TV sets. The incumbents, however, are too often betrothed, whether by choice or by necessity, to content providers whose antiquated business model is predicated on the ability to tightly control the distribution of their products.

As a result, innovation has been slow to come to this market, and the trickle of improvements we have seen over the years—with the possible exception of Netflix’s rise—has largely underwhelmed consumers.

With a platform that is wide-open to third parties, however, all bets are off. Your living room could finally experience the same kind of revolution that iOS and the iPhone brought to the mobile market, where players small and large have pushed the boundaries of what could be done on a phone.

Even better, the Chromecast plays directly on Apple’s biggest weakness: its insistence on going it alone. According to Harry Hawk, a New York–based consultant with experience in marketing and advertising, this could give Google time to grow its user base with little interference from Cupertino. He explains, “Given the low price point of Chromecast, and Apple’s lack of cooperation with other ecosystems, it’s hard to see Apple going directly after Chromecast. In the game between Apple TV and Chromecast, the advantage right now is for Chromecast.”

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