The speculation is now behind us: the Apple community has confirmed that the Apple TV was not a success this year, selling approximately 400,000 units. Some blame it on the hardware or the lack of iTunes video content, but the real issues with the Apple TV and other “Media Centers” are the consumers.

At this point in time, television is in a different arena from computers and the internet’s digital content. Television has dominated home entertainment for decades and not until recently, the last 5 years or so, are computers beginning to play a large role in media consumption. Like MP3 players in 1999 that attempted to bring digital music away from the computer, ‘Media Centers’ haven’t taken off. So where is the iPod of the ‘Media Center’ industry?

Nowhere! Your average consumer has no desire to bridge content from the computer to the TV, or vise versa. Most people see their TV and computer in two separate worlds (as they did with music and computers in 1999). If something can give the mass market a reason to bridge the computer and the TV, suddenly you have the next iPod!

Of course, the solution is actually far more complex — you can buy a machine that does that today (again, just like MP3 players in 1999)! So what do we need? We need consumers to desire bringing content from their computers to their TVs, to want to access recorded TV shows from their computers and transfer them to their iPods! If they saw a great YouTube video, they might want to share it with their friends on the TV, but consumers don’t want to pay exuberant amounts of money to be able to do this, nor do they want complicated hardware and software — consumers just want to get it done.

Truthfully, we may never see the day that ‘Media Centers’ become the next household item because of proprietary formats, DRM and incompatibility. The internet could become a far more effective bridge, and is already competing with set top media centers. Television could be driven by the internet, such as iPTV and your content could be globally available! The answer lies in time — can network television keep its viewers?

Although the Apple TV has potential, it fails to present something original to the cluttered market of nerds. Apple has to find something that consumers are going to want, better than just iTunes on your TV. How about the iTunes Store on your TV or your TV on iTunes? DVD Rentals and, at least, NBC content again would be a plus. But the future lies in Apple’s hands. Are they going to try and salvage this, or leave the Apple TV in its niche and throw in the towel?

–Matt Dodd