There are lots of people out there who want to ditch their cable provider, and Apple should take full advantage.
Is it that hard to see? I just don't understand how Apple and other companies don't seem to "get" it yet. These set top boxes will continue to fail, until one of them finally comes along to be a cheaper and better replacement for cable tv. Movies are great and all, and they need that. But with competition like netflix and the rapidly falling prices of BR players, it's clear the movie market alone is one where apple will fail. They NEED to figure out a way to turn apple tv into a TRUE tv, to complete with cable and satellite. Imagine having your entire TV experience on one little box. I small, portable box you can take with you, and have work just like at does at home, while in hotels, or with relatives?
Imagine having the choice of subsciption or ala cart for your TV. (contrary to what most people will think on these forums, the 95% of the REST of the country would FAR prefer ala cart, with full availablity).
Ofcourse you'd also need the ability to rent or own your movies and tv shows.
Right now, Hulu kinda makes this somewhat a reality. Hulu on ATV, in my opinion, makes the ATV the ONLY acceptable cable replacement out there (but definitely, not great).
ATV will never win in the home theatre department. I shouldn't even compete there. If ATV were to succeed, (or any other box), it will have to be a cheaper, freer alternative to cable and sat companies that can easily sit in anyone's living room, and have anyone use. Apple needs to learn a little from Nintendo these days...