Apple TV turns your television into a "smart" TV. You can rent movies or stream your collection from iTunes, stream movies and TV shows from apps like Netflix and Hulu Plus, stream music through Apple Music and Pandora, listen to podcasts, and even use it to replace your traditional cable TV subscription with services like Sling TV. Apple TV 4K has the same fast processor that powers the iPad Pro, which makes it as powerful as most laptop computers. It also has a fast graphics processor with enough power to turn it into a game console. Apple TV is also hooked into the Apple ecosystem, which means it works great alongside your iPhone, iPad, and Mac. You can view your iCloud Photo Library on your TV, including those great "Memories" photo album videos the iPad and iPhone create automatically from your photo albums. You can also use AirPlay to throw your iPhone or iPad screen to your TV, allowing you to interact with any app on your smartphone or tablet using your big screen television.
Apple TV also gives you access to Siri and can become a base station for HomeKit. The remote includes a Siri button, allowing you to control your TV by voice. You can also utilize the Siri-like functionality for requests such as telling you the actors in a specific movie or asking it to display all Matt Damon movies. HomeKit is basically the headquarters for your smart home. If you have smart appliances like a thermostat or lights, you can use HomeKit to control them. You can even use your iPhone away from home to communicate with Apple TV in your home to control your smart devices.
There are currently two different models for sale and one model recently discontinued. And as you can expect, there are some big differences between them.