There’s been a lot of words written about AirPlay’s potential. Some have guessed that it will let you stream apps to your TV through the Apple TV, others think it’s how Apple will redefine the television.

I caught a glimpse of the latter last night while messing around with the CityTV.com application, my Apple TV and iOS 4.2 beta 3 on the iPad. It had happened previously, the Airplay button showing up while streaming video from the CityTV app, but within 8 hours of noticing it the first time, it had disappeared entirely. Sadly, when I noticed it the first time, I was laying in bed, messing around at 2 AM. I thought to myself, “I’ll write about this in the morning.” Eight hours later the button had disappeared entirely. But, last night, while getting caught up with Modern Family episodes, the button was back again. This time I dropped everything and tried it out.

The audio was sent to my Apple TV and out of the television speakers immediately. It worked like AirPlay has worked to date, and in every way we would expect it to work. This is going to change everything.

While Google’s out trying to get you to buy Google TVs, Apple’s trying to redefine the space in a way that no one else has done yet. Video on demand, from whatever device you want, while still being able to push things to your television set, should you want it, with a $99.00 Apple TV.

Think about that for a second. If a Television agency has an iOS app that lets you stream their shows, you’ll be able to then stream them to the TV as well. Channels become apps, and your viewing lineup can be on demand, and you can do it directly from the iPad or iPhone. Use the iPad and iPhone as remotes, and the Apple TV as a conduit.

It was a pipe dream before, but now that CityTV.com (in Canada) is exploring the potential of pushing the videos to your TV, it could become a reality. AirPlay might be available to anyone who wants to toss a video stream to your TV from their app.

For those of you who aren’t Canadian, CityTV is a television company in Canada that has the rights to rebroadcast a lot of US content. While we have NBC, CBS, and other American channels, it’s the CityTVs and Globals that have been fighting to keep the Hulu apps out of Canada. But, it seems like CityTV and now Global are doing an end around and bringing their own apps to the App Store, complete with AirPlay technology.

At the time of writing, the AirPlay button has disappeared again.  It’s bizarre, but it keeps appearing and disappearing at random, without having to update your iPad app.

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