Now that Hollywood movies are available for purchase and for rental through the Canadian iTunes store, it’s worth giving the Apple TV, the very device designed to play these movies on a television, a proper review. Will Apple’s movie service find the same success as their computer, music, and cellphone businesses? Is this the future of home video? Will it bring Blu-ray to an untimely end? Or does Apple need to go back to their drawing boards and rethink their approach?

The Apple TV is a player for digital files in much the same way that a VCR is a player for cassette tapes or a DVD player is for optical discs. It’s a small box that you connect to your television that can play every major type of digital entertainment; music files, digital photos, podcasts, video files, TV shows, movies, and even YouTube videos.

Although you can buy digital TV shows, movies, and music for the Apple TV through the iTunes online store, chances are you already have an extensive library of such files collected on your own personal computer (either PC or Mac). The Apple TV is designed to play files from both sources. You can connect it up to the internet to make purchases and downloads, and you can connect it up to your own personal computer as well the computers of family members to play the files stored there.

You can do this by running an Ethernet cable from the Apple TV to your computer or internet router (if you have more than one computer), but the better solution and the one the Apple TV is designed around, is to use a wireless connection through a home Wi-Fi network. This way you can keep your computers in the study or family bedrooms and use the Apple TV in the living room without anyone tripping over cables. For those who do have a Wi-Fi network, you’ll be very happy to know that the Apple TV supports all the major frequencies including 802.11a, b, g, and n.

Unfortunately the Apple TV is designed only for widescreen televisions. Your television doesn’t have to be High Definition, but it has to use either a DVI or HDMI cable, or the component cables (Green, Blue, and Red). Any set that uses the old fashioned yellow, white, and red cables are out of luck.

This is too bad as, just like the VCRs and DVD players of old, you can take the Apple TV from one household to another and use it to play your digital files on a friend’s television. The Apple TV comes with a choice of 40GB (50 hours of video) or 160GB (200 hours of video) of storage and, like an iPod, can be loaded up with files to play anywhere you take it. At a mere 7.7” across and weighing but 2.4 pounds, this is far more likely a task you’ll do than you might first think.

The Apple TV comes with a simple TV remote, the very same small clicker that Apple includes with their notebook computers. All but a mere two buttons and a directional ring, Apple’s remote and on-screen menu system is deliriously easy to use. Rather than put all of the various options and choices as individual buttons on the remote itself, Apple placed them all on the television screen (where they are well lit). You use the directional ring to move from option to option and the two main buttons to either select forward or select back. That’s it. Even the settings menu is rather easy to go through and perform tasks like inserting wep keys for Wi-Fi access or adding iTunes accounts. In fact, it’s so simple in design, there isn’t even a power button. You merely hold down one button for a moment to turn the Apple TV on and hold down the other button for a period of time to turn it off.

The Jukebox graphics, with rotating album covers floating against a black space and projecting a wet floor reflection, are used for every category of digital entertainment are provide a simple and powerful way to navigate through your files. It’s like flipping through CD cases or Album covers, you visually spot the one you want and click it to play. Merely pause in between flipping from one title to the next to have it automatically bring up more details (running times, actors, etc.) to help you choose.

Music Jukebox

The Apple TV supports both analog and optical audio cables for connection to either a set of external speakers or for those built into your television. Either way the sound reproduction matches that of most entertainment computers with support for Dolby Digital 5.1 surround sound. It can play MP3s, AAC, and lossless music files, podcasts, and audiobooks either from its own storage, as free previews from the iTunes store, or streamed from any home computer with an iTunes library. You can add different libraries from different computers. For example you can have the Apple TV connect to and retrieve music from the kitchen computer or use it to switch over and retrieve music from the study computer. Each family member can add their own personal computer as a separate library should they choose.

Digital Photo Album

Once loaded with digital photos, you can display them either as a screensaver or as a slideshow complete with the option to play music in the background. As with the iPhoto on Mac computers, Apple offers the Ken Burns effect and a number of stylish transitions including fades, flips, mosaics, and droplets amongst others.

You can grab photos from an online album, either from a .Mac or Flickr account. In the case of Flickr it’s a shame that you have to use your own account as the online community is a wealth of public photos and the Apple TV could easily assemble a slideshow based on a keyword such as “Japan”, “Robots”, or “Kittens” a feature I’ve seen used before with the eStarling Wi-Fi photo frame.

YouTube Videos

Instead of connecting directly to the YouTube website, Apple TV uses its signature jukebox interface to load up a selection of “best of” videos from the online community. These include both a selection of the latest videos added as well as the top rated and most viewed videos from online users. Where you can expand the selection is by accessing your own YouTube account or by using the search tool. You can also choose to see the other videos offered by the authors included in the “Best Of” collection. Most YouTube videos I watch are sent to me by friends, family, and fans and what’s missing is the option to send those links to the Apple TV for viewing.

TV Shows and Movies

As an extension of the iTunes Store, Apple TV is almost perfect. With iTunes’ one-click purchase system you can easily rent or buy videos, both through your computer or directly for your television through the Apple TV itself. Downloads are quick and the quality is fantastic. While the High Definition titles are not presented with the same high resolution as those offered on Blu-Ray discs, they do run at 1080i (upconverted) and the quality is so clear and detailed that only the pickiest videophiles are bound to notice the difference. As Apple uses the H.264 codec, the videos can easily scale between the small screen of an iPod touch to the large screen of a 42” plasma television without any flaws or need for conversion. This will allow Apple to continually upgrade their video quality as time moves forward and the need requires it.

My only issue is the need to “move” rental files from one device to another. Should you make the mistake of renting a movie through your personal computer rather then the Apple TV directly, you’ll have to wait first the hour for the movie to download and then another 30 minutes for the file to “move” over to the Apple TV. The same goes if you want to then transfer it back or again over to an iPod Touch. The Digital Rights Management involved refuses to allow you to make copies for convenience or even stream the content from one to the other and this is something Apple will need to fix.

Parental controls allow you to password protect the Apple TV against playing videos by rating and audio clips based on “explicit” status. You can set it to hide the option to play YouTube videos or internet photos or at least require a passcode before use.

Your Own Non-Apple Videos

Here is where the Apple TV tends to come apart as it is limited to only using videos loaded into iTunes, and that means only a select range of MPEG4-based formats. Unfortunately, the majority of videos being shared across the internet today are not in Quicktime format, but rather use DivX or Xvid formats. To view these files you’ll need to first have them converted over using third-party software, a time-consuming affair, or give up on watching them at all. I myself download a large number of student short films and scientific videos, along with television shows and movies from foreign markets, so this is a big inconvenience. It’s one that doesn’t exist with Microsoft’s Xbox 360 or Sony’s PlayStation 3 consoles. Both can stream DivX content from your personal computer. For that reason, I find that when I do sit down to watch a digital video on my television, it’s my game systems that I turn to, not the Apple TV.

A Glimpse Of The Future

While Apple TV isn’t quite ready to push Blu-ray aside and become the “next home video format”, it’s very close and that move is certainly in the future. Apple has the support for all the major studios with no clear competitor in sight and the success of all their other operations to propel them. The quality of their High Definition movies will certainly improve and without a physical format to lock them down will make it easy to evolve. The only item keeping me from recommending the Apple TV wholeheartedly is its lack of support for DivX and Xvid formatted videos. The iPod is popular because it can play common MP3 files as well as Apple’s own AAC files. The Apple TV needs to do the same for video.