AirPlay Licensing Deal Could Be Apple’s Real Living Room Play

Apple (s aapl) is considering offering AirPlay video streaming to third-party device manufacturers via licensing, Bloomberg reports. It’s an idea that could provide a greater presence for Apple in the living room, but also potentially cost the Apple TV its tentative foothold there.

Bloomberg cites “two people familiar with the project” as describing a new plan Apple is considering whereby it would license AirPlay to makers of televisions, receivers and other consumer electronics that allow for video playback. Currently, AirPlay tech is available for licensed use, but only for audio streaming, as in the Denon receiver Geoffrey recently checked out. Adding the ability to stream video would mean users could potentially stream content from their iOS devices or iTunes libraries directly to their TV or home entertainment setup, without the need for an Apple TV or tethered iOS device to act as a receiver.

Were the deal to go through, it could potentially allow Apple to expand its living room presence. Apple so far hasn’t been able to succeed with digital video distribution the way it has with online music sales, and a recent study found it trailing the industry leader Netflix (s nflx) by a wide margin. Part of that gap has to do with how Netflix is available on such a wide selection of devices, including Internet-connected televisions, home gaming consoles, computers, mobile devices and even Apple TV. Licensing AirPlay video streaming would unlock it from the confines of Apple’s own products, allowing it to begin to compete with Netflix in terms of consumer platform choice.

Greater availability of AirPlay devices would also better leverage the impressive iOS user base Apple has managed to accumulate. Right now, AirPlay is really only a value-added feature if you have an entire ecosystem of Apple products. If you only own one iPhone or an iPad, there’s very little that AirPlay brings to the table. Licensing would heighten the value of AirPlay as a selling feature for all iOS devices.

Of course, the trade-off is that consumers would have one less reason to buy Apple TV. Right now, much of the appeal of the device comes from just two of its features. First, it’s a great Netflix client. Second, it works flawlessly and without much effort for users who want to stream video from iOS device to TV. Sales would almost certainly fall if Apple made AirPlay more available from other sources.

But that could be a loss Apple is willing to accept. At last known count, the Apple TV had sold just over a million units in late December. It’s a good number, especially when compared to the sales of its predecessor, but by no means is the Apple TV the sales star that the iPhone or iPad is, and Apple hasn’t seen fit to crow about any other sales milestones for the device since, which isn’t a great sign regarding its fortunes. If the Apple TV dies but in exchange, Apple gains a broader foothold in the living room that it can use as leverage in negotiations with film and television content providers, it might be a worthwhile bargain for the Mac-maker.

What do you think? Would “AirPlay Video-enabled” stickers on TVs and home theatre receivers affect your buying decision? Does the Apple TV have legs without AirPlay exclusivity?