There's a continuing shift going on in the entertainment industry of sufficient significance that in a recent interview, Cablevision (NYSE: CVC) CEO James Dolan commented that he could see a day when his company stops offering television service. Consumers are cutting the cord and considering new technologies that are rapidly challenging the old models. That trend had led to the emergence of four distinct segments: cable and satellite, streaming video, TV enhancement, and advanced options. I'll return to Dolan when we examine the industry as a whole, but his remarks offer evidence of the upheaval that's already under way.

In Part 1 of this series, I examined the traditional players in the cable and satellite space. In Part 2, I dove into the streaming video companies and how they're disrupting the marketplace. Today, I'll look at what I call "TV enhancement." While there is perhaps the most significant convergence of the various options in this segment, these are the companies that are aimed at making TV better, not replacing it... yet.

The TV enhancement players
(NASDAQ:AAPL): While we all wait for the Apple smart TV -- the product that promises to change everything -- we must be content with the company's current offering. Apple TV doesn't replace your subscription to either a cable or satellite provider, nor does it eliminate the need for a separate subscription to a streaming video service. The goal of Apple TV is to make the services you already pay for better, easier to use, and enhanced by your ability to also stream content that resides on your home computer to your TV.

It's in this last feature, AirPlay, that Apple TV really differentiates itself and is the reason it may have an edge on its competitors -- Google (NASDAQ:GOOGL) Chromecast and Roku. Of the three, only Apple TV allows you to stream both content from your iTunes library and content that's stored on your Mac computer. Any archived media you've put on your machine -- say, from a DVD -- can be streamed to Apple TV. With a price tag of $99, the additional expense is nominal if this is a feature that matters to you.

Google: The introduction of Chromecast has been met with huge enthusiasm from consumers, creating a multi-week backlog for the device. At just $35, Chromecast offers solid functionality and ease of use. While still in the early stages with many streaming video options not yet available, because anything that can be run in Google's Chrome browser can be cast to the device, services such as Hulu can still be made to function. It seems to be on Google's radar to add more functionality -- both other streaming services and the ability to stream from archived content on your PC, but the timeline remains undefined.

Roku: While the third player in this space is privately held, and therefore not an investment option, a discussion of the space would be incomplete without an honorable mention. Roku suffers from one of the limitations of Chromecast -- it can't stream content that's on your PC -- but it offers the greatest subscription flexibility of the three. In addition to Netflix (NASDAQ: NFLX), Roku offers access to's (NASDAQ: AMZN) Prime service, as well as rentals from Wal-Mart's (NYSE: WMT) Vudu.

But how do you profit?
In this context, I'm first examining Apple and Google in the entertainment space, not for their overall appeal as stocks. For each, a role as a TV enhancement fits nicely into the company's overall media strategy. Apple TV gives users another way to access iTunes and more thoroughly entrenches them in the iOS ecosystem. By very intentionally not challenging content providers and distributors, Apple should be able to forge important relationships that have long-term potential to pay off, if the overall structure of TV shifts. These relationships and partnerships with cable and satellite providers, as well as with streaming video providers, add to the appeal of the company and the stock.

Google is taking a slightly different approach that equally fits into its strategy. Chromecast acts as a TV enhancement but essentially functions next to other options. Google isn't exactly challenging cable and satellite providers, but neither is it leaving them alone. As the importance of YouTube continues to increase, and "Internet TV" becomes more of a possibility, a device like Chromecast is perfectly positioned to make Google and YouTube the cheap and easy way to jump into the market for most consumers. Long-term, Chromecast should be significant for Google.

In terms of these stocks beyond this niche, each is attractive and worth owning. Apple continues to look undervalued at current prices, and if the company can catch its stride again, it should perform. Google continues to roll out new technologies and into new markets, showing that its days of innovation are far from over. As such, I like both names, on both the media story and overall.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of, Apple, Google, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.