Apple TV review: Simple, but limited, streaming for Apple acolytes

All of the content is streamed (rather than downloaded) and you can access your purchased movies and TV shows to rewatch as many times as you'd like. Your movie and TV show purchases can also be streamed or downloaded to other Apple devices, including the iPad, iPhone, iPod Touch, Macs, and PCs running iTunes.

Other streaming services: Improved third-party support
Once you get past the iTunes content, your options are more limited on the Apple TV, although it's getting better. Netflix is the most important, followed by other high-quality sources like Hulu Plus, YouTube, MLB.TV, NBA, NHL, and Vimeo. The podcast section also includes plenty of video content (which a lot of people don't realize), including TED Talks and CNET.

That still leaves several content sources missing, including heavy hitters Amazon Instant, HBO Go Pandora, Spotify, Rdio, plus the dozens of niche video sources that Roku supports. If you don't use those services, you won't be missing anything with the Apple TV, but digital media hounds expect more options in 2013.

The Apple TV is also still limited in its ability to natively play your personal digital media. The basic rule of thumb is that it will play anything that plays in iTunes, but that leaves out a lot of often-downloaded file formats such as MKV and DivX. If you're looking to play that kind of content, you've got two choices. The first is to spend lots of time converting the video into an iTunes-friendly format (with such freeware programs as HandBrake or Format Factory). The second option? Skip the Apple TV and check out competitors like the WD TV Play, which can stream most video formats without the need for conversion.

AirPlay: The Apple TV's killer feature, now with mirroring
The Apple TV's lack of content sources is somewhat made up for by AirPlay. We've covered AirPlay plenty in the past, but it's a killer feature if you own other iOS devices. The idea is you can stream photos, music, and videos straight from another iOS device to the Apple TV. That includes many third-party apps as well -- effectively making them "available" on Apple TV. So while the Apple TV doesn't have a Pandora app, your iPhone does and can stream Pandora to your Apple TV using AirPlay. However, while nearly all media apps support AirPlay for audio, some of the best ones block AirPlay streaming for video, such as Amazon Instant. (However, HBO Go does stream via AirPlay now and a dedicated app is apparently on the the way.) So while AirPlay can substitute for some apps, it's not a panacea.

AirPlay Mirroring, however, gets much closer to panacea territory and solves the question I'm often asked: how do I stream any Web video from a laptop directly to my TV, wirelessly? With an Apple TV and a recent Mac running the new Mountain Lion version of OS X, anything you can see on your computer's screen -- including Flash video and free Hulu content -- you can stream to your TV. That enables you to get around a lot of the Apple TV's content shortcomings; HBO Go, Hulu, and video from major TV networks all worked fine during our tests. It's a flat-out awesome feature and a great tool for cable-cutters.

The catch is that only relatively recent Macs support AirPlay Mirroring: specifically, iMacs (mid-2011 or newer), Mac Minis (mid-2011 or newer), MacBook Airs (mid-2011 or newer), and MacBook Pros (early 2011 or newer). That's certainly a frustrating limitation, especially if you have a Mac that just misses the cutoff. (If you have any older Mac -- or a Windows PC -- and still want mirroring functionality, you can check out third-party applications like AirParrot, which works with the Apple TV, although performance isn't quite as good.)

AirPlay is also great for streaming your personal music collection. It works with any music you have stored on an iOS device and you can also stream your iTunes music collection from a computer. It's one of the easiest ways to listen to your digital music in your living room, although iTunes Match (which I'll get to shortly) makes it one step easier.

iTunes Match: Digital music made simple
Getting your digital music collection to your living room somehow still manages to be a pain in 2013, outside of pricey (but excellent) options like a Sonos player. iTunes Match gets rid of most of the frustrations, letting you store a copy of your digital music in the cloud and stream directly to the Apple TV, iOS devices, and iTunes on a PC. No dealing with hard-drive management or complex network settings.

The downside is the service costs $25 a year, which stings a little considering that's a fee to listen to music you already own. (Google offers its own music storage options for free; Amazon's Cloud Player is also $25 per year.) It can also take some work to set up, but the interface on the Apple TV is a pretty slick way to listen to your digital music once you get it working properly.

Performance: Not enough to upgrade
If you have a second-gen (2010) Apple TV and are wondering whether it's worth upgrading to the latest model with 1080p support, the short answer is no.

I purchased "Hugo" in HD and was able to switch back and forth between the old 720p Apple TV and the new 1080p Apple TV. On a 58-inch 1080p plasma TV, the difference was minimal at best. The opening sequence to "Hugo" should be a perfect torture test for exposing video compression, with plumes of smoke and dark backgrounds. The 1080p Apple TV's picture may have been very slightly sharper and richer, but there wasn't a single moment I could pick out where the 1080p Apple TV's picture was demonstrably better. The image quality from both boxes was excellent; only the pickiest videophiles will be disappointed at typical screen sizes.

Conclusion: A solid, but unexciting streamer
The Apple TV is an easy purchase and well-worth $100 if you're heavily invested in iTunes content and the rest of Apple's ecosystem of content. But if you're not an Apple acolyte, the Roku 3 is the better buy, especially if you'll take advantage of its more extensive content offerings.