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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
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
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
Actually, iTunes shows are not without commercials. Many of the shows have commercials embedded in the movie file. What they are is without commercial interruptions. Commercials are placed on the tail end of the video where you can choose to watch them or shut off the playback. This is vastly superior to the DVD solution of, "you MUST watch these commercials every time you turn on this DVD."
I don't know about anyone else, but I actually like seeing occasional advertisements. Especially things like movie trailers and new show promotions. My problem is that I don't like being forced to watch them repetitively. iTunes gives you the best of both worlds in that respect, and in a way that is unlikely to offend the die-hard anti-commericalists. (Dare I say it? Anti-commercial Nazis?)
Javascript + Nintendo DSi = DSiCade
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?
Was just looking at a list of the top 10 spenders on advertising. 4 of them are media companies (Time-Warner, Disney, GE (NBC), and News Corp) and 3 are telco's (ATT, Verizon, Sprint). If all of their products are going to be free, who will be left to buy ads?
Have you seen the videos on NBC.com? The difference between the NBC.com videos and iTunes videos is like night and day. I'm probably one of the least picky people about my video quality, but even I think that NBC.com looks significantly worse than your average CRT television. It reminds me of watching television with rabbit ears, only worse.
Javascript + Nintendo DSi = DSiCade
I think it's pretty obvious that downloaded shows make a lot of sense at the moment. So do DVDs of shows - it's convenient and you can use them offline.
Imagine a future, though, where wireless broadband is cheap and ubiquitous. Subscription websites generally do poorly and people are willing to sit through advertising in order to get something they want for free. If I can tab to another web site during commercials, I probably don't care that things are delayed for a couple minutes.
Eventually, the issue will be about time. Some people's time is valuable enough that they'll purchase the DVD or download the series. For the masses, the commercial approach is fine for them. Personally, I think it's good to have choices.
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
There was a time in our history when the world-as-you-knew-it was the same one that your parents knew, and would be the same one that your children would know. The division of social classes, their economic wants, their means of fulfilling those wants, their cultural values, etc., did not change over one, two, or even three generations. In that environment, the concept of the "economic man," and the whole business of making predictions based on the science of economics, had some genuine effectiveness to it.
In these times, all the above listed factors change every decade. Not only do we know very little about what world our children will face, we know very little about what our own values, needs, and means will be in the next ten years. Because of this rapid pace of change, by the time any sort of economic model has enough data upon which to base predictions, all the data no longer apply.
Therefore, as far as I am concerned, all such analysis are little more than crystal-ball review.
The risk-takers are the ones who shape our world from one decade to the next, and the unknowns are just too high to say with confidence which risks are worth taking. There are no safe investments, but the betting window never closes.
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.
As an example on this, let's take myself.
I love watching LOST, but I am awful about actually sitting down and watching it when it is on TV. I always miss it.
Back during Season 2, I was still catching up. I really wanted to watch the episodes that I missed. I had missed a lot of them. So, I figured $2 is worth the price of an episode. I went to iTunes, and I bought about 12 episodes of Season 2 to catch up to where I needed to be. It was really cool, the quality was good, and I was pretty happy with it.
Fast forward to now.
I still miss LOST regularly, but I don't buy it from iTunes anymore. I go to www.abc.com, and I watch it online. I can watch it in full screen, and I just have to sit through a 30 second commercial a few times per episode. I consider that a free trade, considering that if I was watching it on TV, I'd have to sit through FIVE MINUTES worth of commercials several times per episode.
The only issue I have with the ABC content is that sometimes the streaming isn't quite fast enough, and the video feed can get locked up. I don't have to deal with that on iTunes. Also, you can only go back 4 episodes. So, if I missed an entire season, I couldn't get it on ABC.com. However, I would imagine that ABC has something in the works to rectify this situation.
In summary, I'd rather watch a few commercials than pay $2 for an episode if I am given the choice.
UNLESS
I want to burn the episode to DVD to watch later. THEN I want a high quality digital copy with no commercials, and I'd pay $2 for it. Unfortunately, iTunes doesn't allow you to burn video to DVD, so I can't win on that front at all. If Apple can get rid of the DRM requirement on their downloaded videos, to let you burn them to DVD, I can see a market for them. Otherwise, eventually the free content will win.
You know... My first internet connection was on two leased line 9600 bps modems. We had a Siemens server running SINIX and a couple graphical workstations running Collage. My first post-web home connection was my trusty 14400 US Robotics I already used for BBSs. I still have it and it still works.
Of course, it was before the web.
In ten years, my home internet connection became five hundred times fatter. If we disconsider clever compression techniques that could be invented in the meantime, we can imagine that a 10-fold increase would be required for HD movies to be feasible.
Just seeing how fast broadband was adopted here in Brazil (first at 256Kbps and these days in the Mbps-range) accompanied by a sharp drop in prices, I can't imagine not having a link fat enough for HD content delivery in 5 years.
People tend to forget that whoever offers video subsidized by commercials will do whatever they can to prevent you from skipping them.
I think that the videos you will be able to purchase on iTunes will still cater to the normal Apple audience: those who can pay a little more for a whole lot more convenience.
http://www.dieblinkenlights.com
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.
If we're to go by their thinking, then consumers will have no problem having to figure out which studio or agency owns the rights to their show, find their video site online, and watch. Hmm, who owns the "Spider-man" cartoons again? Oh wait, what about the A-Team?
The middle-man has been successful all of these years because it makes things easier. Consumers don't have to dig through yellow pages, address books, search engines, etc to figure out where to find a product. Like with iTunes, it's all there in 1 place and easy to find. If you want a better deal (or something Free) then look harder, but I doubt iTunes would go away. At most, they've have to change lower their prices.
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.
Yeah, and one thing Apple brings to the table: centralization of the content. It'd be a pain in the butt if I had to wade through 2 dozen different website, all with different layouts, and possibly different file formats, to watch the shows I want.
With Apple, I open iTunes, search, buy what I want, and play it.
Of course, I really do wish that Apple would port the application and service to Linux. I've actually got a Mac, a Linux box, and a Windows machine (and several others scattered about) at home, and I'd like to be able to access my media from whichever I'm using at the time.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
TV is dying because Cable is so damned expensive if I want anything more than the bare minimum. It is especially expensive for me because I don't want to use them for internet and phone. They've pushed to far with the bundling. To get your money's worth, you need to go all or nothing. So I chose nothing.
I can take out/skip the commercials. That is no problem anymore. A TiVo or similar woudl actually be more convenient than downloading. It is just so much cheaper to just manually download the 5 or so weekly shows that we watch, Netflix the movies (ondemand had a terrible selection last time I checked), and get the HD PBS over the air.
Of course, when I say "download," I mean bittorrent. So I guess I'm cheating a little bit.
-matthew
"THERE IS NO JUSTICE, THERE IS ONLY ME." -Death