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Study Says No Future for Video iTunes
eldavojohn writes "Reuters is running a story on a study that claims "Online video sites that sell shows and movies such as Apple Inc.'s iTunes will likely peak this year as more programming is made available on free outlets supported by advertising." Many channels have wised up to offering their content hosted from their own sites for free — with commercials — to cut out iTunes as the middle man. End result? Predictions that services like iTunes-Video have no future."
There's television!
I can't be the only one who'd rather pay a couple of bucks to watch without commercials...
Let me see. I can go to NBC.com and watch a show in horrendously low quality with annoying commercials, or I can spend $1.99 a week to watch the same show in H.234 480p with no commerical interruptions. Oh, and I can collect the seasons and watch them whenever I want.
Seriously, this doesn't make any sense. And can television stations really say that they make more money per viewer with commercials than they do with iTunes downloads? As far as I see, the episodes on NBC.com are carrots intended to get viewers hooked on the shows. The quality is intentionally limited so as to convince new viewers to tune in on television or iTunes.
Javascript + Nintendo DSi = DSiCade
I suggest you read Slashdot
However, IF you can watch the same thing for free, with similar quality, only the irritant of commercials remain. However, this is a big irritant and I think most people would skip them if possible. As long as people are able to skip the commercials somehow, then the free option will prevail, however, the providers will never stand for this.
Buying content will allow people to play said content on portable devices. Commercials fed services will have to be streaming to keep the user from skipping commercials. So, different users will want different kinds of content.
Badgers, we don't need no stinking badgers! - UHF
iTunes seems to be quite a success despite free music downloads and subsidized music in the form of radio. I don't see why videos would be any different.
Why do people insist that the world be black or white; beta or VHS; HD-DVD or BlueRay?
What the author should have said is that iTunes perhaps has yet to find the video market content that targets it's user base. Just because content providers are finding that they get more benefit by not having a middle man for distribution does not mean there is no room in the market place for what iTMS has to offer... or any other content distributor, can you say YouTube or others like it?
While CBS, NBC, BBC et al can find profit in distributing their own content, it is aggregaters that will create 'channels' that users will be willing to subscribe to. Just like broadcasting companies of years gone by, it will be aggregation channels that people end up watching.
Already there are too many web sites with video content and too much content for the average user to keep up with. In the end, due mostly to operator overload, users will end up just watching their 'favorite' channels of video content on the Internet. Just like there are different Internet radio stations because of taste and ease of use, video channels will emerge as the 'new tv' networks. People are often just like sheep wanting someone else to tell them what to watch. This societal effect will make its mark on Internet video content too.
The good news in this story? Content creators are seeing that they don't need a distribution company for the Internet. Perhaps musicians will see this too and wriggle out of their contracts to start putting more music content out there without the RIAA tax.
Support NYCountryLawyer RIAA vs People
It's one thing sitting at your desk and getting to watch a TV show, and syncing it with a mobile device and watching it during your lunch hour at work. If I'm home I'll watch it on TV, but if I dont have time and want to watch it whenever I want from wherever I want then a video ipod sounds nice. So there will be a market for it. Plus I'd rather pay a couple bucks for on-demand ad free content then free and usable only via the web with ads.
My time is valuable to me. My friends value their time as well. Tivo's value is not just time shifting, but also cutting out crap. If I have to pay Apple a premium to do this for me and watch only a few shows because of the cost, to me that's better than watching crapisode after crapisode put only solely for the purpose of having something to insert commercials into. And if I feed the demand for something which competes against AdverCrapIsodes(r) it's a bonus.
In my little world, this guy is off target.
People pay to get their time & choice back.
You are checking your backups, aren't you?
I'm not sure they've taken every aspect into account. While 'free' sounds good, I'm pretty sure people don't want to hunt all around different sites, all with different viewing/codec requirements, all with different site logins and other logisitcal hoops, just to find something they might want to watch.
On the contrary, I believe sites that will survive which can collect the most shows/movies from all the content providers in one place, all with short previews, all encoded reliabily the same. While the 'Net allows for wild west style secluded towns for each studio, it doesn't have staying power. People tend to prefer a centralized distributor they can count on.
iTune's biggest issue IMHO is that they need more studios to supply content in order to make them a one-stop shop. The studios need to get past this walled garden idea.
{ - Generic Guy - }
First of all, how many fucking idiots in the world are there that write studies and articles like this? EVERYTHING IS NOT BINARY! THERE DOES NOT ALWAYS HAVE TO BE ONE WINNER AND ONE LOSER! FUCK!!!!!
The Internet has not replaced TV. TV did not replace radio or the movies. Movies and radio did not replace stage shows. Smartphones have not replaced PDAs. Etc etc etc. Can't ONE FUCKING JOURNALIST accept the fact that some things will just stay around?!? Sheesh.
Now, on to the actual premise of TFA: I love that ABC and others are making their content available online. HOWEVER, I do NOT like that I've got to fire up a browser and watch shows streaming. I *want* to be able to download shows and watch them with no de[[[buffering]]]lays, and watch them over and over, and skip around with no delay, and be able to watch it some day in the future when ABC quits hosting the file, etc etc etc. I don't like buying video from iTunes--the fact that it can NEVER be watched without a) a computer, b) an AppleTV, or c) an iPod pretty much kills it for me--but I like watching shows in a browser on my so-so Internet connection even less.
Long story short: this will NOT be the end of iTunes. Hint to fucktard "journalist"/"researcher" #42571: TiVos and videotapes ALSO render iTunes obsolete--but it's still around. Get a fucking clue. Douchebag.
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Starting four years ago, I had a Dish network subscription plus a TiVo. I haven't seen a TV commercial since, except for the rare occasions I was doing something and couldn't get to the fast forward button. Two months ago, I realized:
1. I really don't watch too much other than movies and a couple of TV shows that are available on iTunes. I definitely never watched anything when it was actually being broadcast -- usually several days later.
2. The total monthly cost of these things is more than my motorcycle payment.
3. I could get a Netflix subscription, buy the entire seasons of the shows on iTunes, give up nothing, and save a few hundred bucks a year.
So I cancelled the satellite, unplugged the TiVo, and haven't really missed them since (except when my girlfriend is over and wants to watch something; all that's hooked up to the TV now is a DVD player and the XBOX 360.)
I call shenanigans on this study.
"There is no night so forlorn, no mood so bleak, that it cannot be infused with pleasure by tender meat..." - R.W. Apple
Like many viewers I can't watch regular tv anymore. Too many commercials. At ABC.com I can watch 43 minutes of Lost with 3 separate 30 second commercial breaks for free and at a pretty good resolution. 30 seconds is short enough that I generally don't leave during the breaks (good for the advertisers) and a total of 90 seconds of commercials is a minimal distraction from the show. I occasionally buy 24 from iTunes because it's not available for free online (legally) and the quality doesn't seem any better.
What the networks have been failing to grasp (and many here have mentioned) is that there is not going to be just one method of distribution. The spate of technology has empowered the viewer to watch on their own terms, and the content creators would be making a drastic mistake to bet on one technology edging out the other. Some people will want to watch it on the AppleTV, and some people will be happy to download it with their media PCs while others will hang in there with their Tivo. Many more will elect to watch it on their iPods or tiny cell phone screens while sitting on a train to work (or hopefully, not while driving to work).
Appointment TV is dead; the networks and broadcasters need to wake up to the fact that everyone showing up in front of their televisions at a set time to watch Idol is becoming as arcane and antiquated as the family life portrayed in 1950's family sitcoms. They need to realize that in order to capture every eyeball, they'll have to distribute it on cable, on the download sites and services for products like AppleTV, on their own web sites, on cellular networks and every other place where they can find eyeballs. To ignore this will simply result in less dollars for them because they are not making their shows available to the largest number of people.
Has anyone realized that apple doesn't make much of a profit from the content offered on it's itunes store? If apple is offering all this content simply to push the sales of ipods, macs (and now appletvs) where there IS a lot of profit, why shouldn't apple start offering free video downloads that are ad-supported, with additional drm such that you can't fast-forward while a commercial is on screen? or maybe just make you watch a short ad (not even necessarily embedded in the video file) before you can watch a show...this would be dynamic targeted advertising, but would require an always-on connection, just a possibility. Bottom line... Who says apple can't provide free downloads? If they have the download infrastructure already in place, wouldn't it actually BENEFIT content providers to just offload video to apple? That way they wouldn't need to spend resources developing their own distribution systems.
- Convenience. I don't want to hunt around to find the content I'm looking for, deal with different codecs and quality issues, and try to get it working on my Mac (my attempts thus far to view things like the NCAA basketball tournament games, or portions of The Masters, have been wildly unsuccessful.)
- Viewing Experience. Nobody wants to watch these on their computer. Apple already has the AppleTV, or even Mac Mini as good settop box options.
- Familiarity. The existing iTMS user base is huge, we already have accounts there and are exposed to the video choices, making it easy to take the leap into video.
- Integration. There is value in having the option to view the content on my laptop, iPod, as well as my TV -- without jumping through hoops and transcoding. This will be even more important as the next generation of iPods, with iPhone interface and widescreens, become available. having the video on a portable device becomes even more useful / usable.
I'm not saying iTMS is the pinnacle of multimedia.. but it's the best thing going right now. I am hoping that free/legal options become more common in the future. But, I'm thinking something along the lines of MythTV, except easy to set up and use. Record HDTV programs for free with an antenna, convert them to a good format for use on a variety of devices, and integrate with a nice settop box for TV playback. MythTV can do this today, if you're willing to spend the time/effort and acquire the knowledge necessary. This is definitely an area ripe for a startup.. but it needs to be one that is willing to live without exploiting all the lock-ins that everyone else attempts with this sort of thing.
A while ago, I compared the cost of my local cable provider to the cost of iTunes. I figured that the most comparable level of service to iTunes was the one that includes a DVR and a few of the premium channels, which I think cost about $60 per month. Then I looked up on the iTunes Store the shows my family actually watches, and calculated how much each show would cost per month (obviously, I needed to do some conversions, since most shows are sold by the season rather than by the month). I omitted all shows that are in reruns, since I decided that if I were to drop my cable service, I would be more likely get such shows on DVD (either buy them or rent them e.g. via Netflix).
Some of the shows we watch aren't offered on iTunes (including MythBusters!!!), but when I calculated how much we'd spend if all the shows we watch were offered, I found that the worst-case scenario was still less than half the cost of the comparable cable service. Furthermore, iTunes offers a variety of advantages (no commercials, and we can watch purchased shows whenever we want) that no cable service provides and can't easily be translated to a dollar value.
My opinion, therefore, is that video through iTunes and similar services, while not as well-developed as video through cable or satellite, has the potential to be a significant competitor to traditional cable or satellite services.
Remember how direct mail orders killed the retail business?
Companies could cut the middle-man and allow customers to buy from them directly, as long as they were aware of the company, and had their mail address, and were willing to fill up a mail order form and a check and send it to them.
Right...
There is a value proposition in a centralized marketplace for this content - exposure their user base, facilitate impulse buys, all sorts of nice things which include most of the reasons malls still exist.
Providing the content on their own website has a lot of advantages too - not the least that perhaps people might have a reason to go to nbc.com.
But the big difference is that they have more leverage to use against the middle-man on negotiations. "Look, it's not like you are our only choice. If we don't like the deal, we'll just take our content home and play by ourselves.".
This is less in line with "online video stores have no future", and more in line with "CEOs of online video stores may have to stop comparing the children of content-producer executives to ugly-bulldogs-after-a-car-accident".
Freedom is the freedom to say 2+2=4, everything else follows...
This "study" was conducted by the same Forrester Research that said the iPod Photo would go nowhere, the same Forrester Research which claimed iTunes sales were "collapsing" then had to scramble to do damage control when their estimates were based on a very misleading data source.
Part of their problem is they can't seem to see five minutes into the future at the larger strategy Apple is deploying with devices such as AppleTV. What the MIT computer science-educated, but consumer technology-ignorant analysts at Forrester seem to want is for Apple to:
a) Follow the same abysmal (read: atrociously unsexy) corporate branding strategy as everyone else... i.e. iPods should be APPLE IPODS (imagine a big flashing neon sign).
b) Focus more energy on getting consumers to accept the 1970's definition of computing (which, incidentally, is paramount to Forrester's bread and butter).
What Apple does that seems to have Forrester analysts' panties in a bunch is they focus on understanding how consumers interact with technology, and then define solutions that fit that usage. Consequently, Apple does not fit Forrester's mold. They deploy a device like AppleTV and all Forrester can see is Apple trying to compete with cable/dish. They cannot see the larger multimedia strategy at play here, of which AppleTV is only a "feeler" product. Even if AppleTV fails, its lessons are going to be harvested by Apple product people to shape the next generation. Since Steve Jobs' return, Apple seldom experiences a tragic loss in the market because they take whatever they learned and shape future products with the improvements that were needed. If AppleTV succeeds, we'll see an extrapolation of more of its features. If it doesn't, we'll see devices based off AppleTV that possess what it is that AppleTV lacks.
This difference in focal length of Apple's vision, and Forrester's vision, is also what sets Apple apart from all its competitors. They're just as myopic as Forrester... which works out perfectly since there's money to be made by restating the patently obvious. It's certainly a lot easier than having vision.
Your suggestion, that the whole TV advertising economy can be based on an assumption that people are actually watching commercials, when they really aren't, is simply absurd.
They'd do better if they'd change their price point.
A whole season of a show from itunes is on par with DVD box sets. Except theres no packaging, much less sales overhead, no physical media, low video quality and obtrusive DRM.
Movies are priced similarly - on par with a DVD.
Wheres the advantage? If I like it enough to pay for it I'll spring for the dvd. Its a better deal.