Why Apple can't do to video what it did to music

[StarshipTrooper]

Why Apple can't do to video what it did to music

By James L. McQuivey, News.com

Published on ZDNet News: Dec 5, 2007 10:06:00 AM

From Hollywood to New York City, media executives have spent the last two years fretting that Steve Jobs could wreak havoc on the video distribution business the same way he upended the music industry.

The hand-wringing can end; the Apple juggernaut won't be able to do to video what it did to music.

Flashback to October 2005: Apple's music store was plowing through previous barriers of consumer behavior and industry politics to build the only successful online music store. So successful, in fact, that in the present, iTunes sells about 20 percent of all music sold in the United States. It came as little surprise when iTunes created the video iPod and announced it would go after the video market in a big way.

Now, two years later, the bad news for Apple is that the company's media distribution strategy is not going to work in video like it did in music. MP3 players, including the iPod, are valuable from the day you buy them because your entire CD collection provides immediate content to fill the device. The video hardware business is different. Unfortunately for consumers, the movie industry won't let you rip DVDs to iTunes, and therefore any one of the many devices Apple has recently added video to, including the iPhone, iPod Touch (essentially an iPhone for people with Verizon calling plans), iPod Nano video, and Apple TV. This means you can spend $299, as is the case with the Apple TV, and still not be able to transfer any of your existing video library to the device, forcing you to buy video from iTunes.

This might not be so terrible if all the videos you wanted to watch were on iTunes. But even after all the major movie studios agreed to participate with Wal-Mart Store's online download store in early 2007, most of them have still not agreed to sell new releases through iTunes--either from fear of building an Apple monster, or because of exclusive commitments to other partners in paid TV or elsewhere. That's why, despite the back catalog of movies that Paramount, MGM, and Lionsgate feature there, the result is a stunning lack of movie content for purchase.

To make matters worse, the one bright spot iTunes had going for it--the TV show download business--is stalling. NBC announced this fall it would withdraw its content from the iTunes store when its current agreement expires at the end of this year. Content that NBC Universal CEO Jerry Zucker has claimed on the record accounted for 40 percent of the iTunes video store's sales, while only bringing NBC an anemic $16 million in revenue.

Not to mention that the value of an expensive video device is dramatically lessened since there are now easier ways to watch the TV shows you want, when you want to watch them. By the end of 2007, Forrester Research estimates that 26 percent of homes will have a DVR, and the 52 percent of the population with a broadband Internet connection can watch TV shows for free from every major network. NBC Direct will even let its fans download shows for offline--read: airplane--viewing.

All of this adds up to one conclusion: don't let the Mac geeks posting angry blogs against NBC fool you. Any supposed backlash against NBC will not materialize since NBC has made its content available, for free, on NBC.com and has plans to do so on six other major portal sites through Hulu.com, as well as via NBC Direct download and over cable VOD. Without NBC's content, iTunes is only 60 percent of a store.

There are additional obvious things Apple can do, like changing from a download-to-own model to a pay-per-view movie model, a strategy that Hollywood has embraced and that also solves long-term storage problems for consumers. However, the real innovation comes if and when Apple funnels more Web video--both professional and user-generated--into iTunes. Envision ubiquitous "download this to iTunes/iPod" links that go beyond those few Web videos formatted as video podcasts.

Of course, the only way to download Web video without getting sued is to let Web video providers embed ads in the video streams that iTunes will capture. Have no doubt, the 6 million U.S. households with video-enabled iPods would be welcome target customers for top video sites' advertising ambitions. And this would allow iTunes to grab a piece of what my marketing colleagues at Forrester predict will be a $7.2 billion online video ad market by 2012.

But even while cashing in on ad opportunities, Apple shouldn't lose sight of the fact that the purpose of all of these improvements is to make all of its high-price, high-margin video devices become worth their price tags to another few million customers.

Media executives on both coasts can continue to arrange their deck chairs since there is no Apple iceberg visible ahead. Yes, there are still pirates in these waters, but the bigger long-term problem is complacency. They shouldn't let a lessening Apple threat cause them to slow the pace of innovation. As we know from fickle audiences in the past, if you do not serve them, they will wander--to competing content, certainly, but also to competing consumption models.

http://news.zdnet.com/2010-9588_22-6221547.html

[Commander Taggart]

Interesting.

Of course, it's not too difficult to get the video content you want on your iWhatever.

[Devlyn16]

The key, as they said, lies in that peopel became accustomed to being able to rip cds to their PCs, but due to copy protection they never found it easy or convieniant to rip video to their PCs

[Metryq]

"easy or convieniant to rip video to their PCs"

Handbrake and MakeMKV. Then there's the irony of everyone getting excited about both HD and small-screened portable devices.

[Devlyn16]

"easy or convieniant to rip video to their PCs"

Handbrake and MakeMKV. Then there's the irony of everyone getting excited about both HD and small-screened portable devices.

Yep easy & convienient! Try ripping DVDs on a a machine sporting an Athlon 1800 processor, and then encode it for your PSP/PS3/Blackberry/Android ETC.

then for the Hearing Impared try dealing with captions & subtitles.

yeah, simplicity:rolleyes:

[fletch2]

Sorry but I don't buy it. For one thing one of the few "legit" ways to get a digital version of a film for your i-device DOES use iTunes. I'm talking about the digital copies offered with some Bluray disks. If you use them, you download the film from Apple, not from the studio. Yes iTunes lets you rip your own CDs but that only bootstraps the process of building a digital music collection. When I first got an iPod I transferred maybe 70% of my CD collection into my iTunes library but it was very rare that I took a whole CD full, I tended to take only the tracks I liked off of albums and sometimes that was as little as two songs. The last two CD's I bought were both albums unavailable on iTunes, generally these days I buy only the tracks I want rather than full albums.

The big difference between video and audio is to do with the way that producers package things. In the music biz there are often a lot of filler tracks on an album that you pay for to get the tracks you really want, in that case buying track by track makes perfect sense, audio is something you can listen to on the go and so being able to purchase a track or two on the go has benefits. By contrast video tends to offer either films, which you would want the whole of or boxed sets of TV shows. If you like the series enough to want to buy it on disc then the chances are you will be buying the whole package anyway. Also, unlike music producers the video guys are smart enough to usually give you more than just a movie. I have bought DVDs purely because of the bundled special features and deleted scenes.

A day is coming when folks will buy movies and TV shows from an iTunes style store, but that will only happen when they can store the equivalent of a roomful of DVD's easily. It looks as if Apple is working on a cloud based solution where your collection remains on their servers and you just authorize a device to play it (or host a copy for things like flying.) It isnt hard to envisage that in a few years browsing your video collection will be done on the screen of your TV, with the option to play from the cloud or port to iPad.

[Metryq]

Fletch2, the only technical note I would add is that "digital copies" are stored locally, on the Blu-ray or DVD disc containing the player-formatted movie. You go on-line and type in a serial number (included with the disc) only for the purpose of activating the digital copy and authorizing the hardware to play it. I have not yet made the jump to Blu-ray (I own two discs, but not a player), and all the digital copies I've seen thus far have been in WMV format — off limits to a Mac user. I can play WMV via Telestream's "Flip4Mac" plugin, although that cannot handle encrypted WMV.

The big reason I did not jump on the Blu-ray bandwagon is because I feel it is too little, too late. I'm a video engineer, so I know how to assess an image. And I agree with those who say there is very little difference between the Blu-ray and DVD versions of a movie on a big screen. This is due to the fact that many movies are still shot on film, and the transfer process degrades the image in certain ways.

Speed Racer was shot entirely with digital cameras and featured mostly virtual sets. The first seven minutes of the film was released on-line as a teaser trailer. The clip was 1280x544, essentially the "smaller" of the two HDTV standards used in broadcast and home video. (Full HD is 1920x1080.) I must have watched that clip several dozen times in anticipation of the movie, so the look and details were etched in my memory. The first cinema where I saw the full feature displayed an "analog" copy — from actual film. Naturally it had been transferred for backward compatibility with older cinemas. My jaw dropped when I saw the noise artifacts and contrast difference. Movies shot with film look better from film, and movies shot with digital cameras look better on a digital display (whether it be your home theater set-up, or a digital projector in a cinema). When optical printers were pushed to the wayside in favor of digital compositing, the line was blurred — even movies shot on film and displayed from film were not entirely analog anymore.* As more movies are shot with digital cameras, a format like Blu-ray will make sense. By then it won't matter as the infrastructure to deliver file-based movies will be in place and optical media will seem quaint, and sometimes a nuisance.

The Star Trek TV series was forward-looking with those little memory cards that looked like floppies, even though they always called them "tapes." Space: 1999 was similarly prescient with its PDA/smartphone-like commlocks and file based data system. For example, Victor might walk into Koenig's office and say, "John, look at this," while beeping his commlock at the conference area video screen. Was the displayed image stored in the commlock? No, Alpha's data-net knew that Victor Bergman (via his commlock ID) was requesting file number x on the local screen he pointed at. Admittedly, the "big iron" sized computer is now outdated, but the service is coming on-line only now.

Sci-fi: prescient about some things, way off the mark on others. And we take it all for granted by the time it happens, but the ideas had to come from somewhere. (Consider that industrial designers, like Syd Mead, are often tagged for movie pre-production work.)

*—And sometimes it shows. Lost in Space was shot on film and used a lot of digital effects and compositing. Take a look at the scene where Maj. West feeds the Blarp one of his rations. There must have been some problem during one of the A/D or D/A transfers, or perhaps while "matching the blacks" because the shots are dithered like an old GIF image. It didn't help that everyone was dressed in black and the scenes were dark. Electronic imaging uses contrast curves known as gamma to make the most efficient use of limited data bandwidth. The result (in the digital realm) is often blocky artifacts in darker areas. GIMP found use in professional post production houses for many reasons, one of which is that it supported higher bit color spaces than Photoshop at the time.

[AJMarks]

I think we're all overlookig the biggest problem. TV today sucks! Doesn't matter what media you put it on, it will still suck.

[Devlyn16]

Hmmm Now I'm curious about Legal Physcial Libraires of media (music vs. video) people owned when the transfer from physical to digital occurs.

While I suspect people on this board are more likley to have amassed a large video library I have to wonder how compares to the "average joe".

Personally the Legal Music Library (Vinal, Cassete & CD) I amassed DWARFS my Collection of Video(VHS, DVD, & Blu-ray). Keep in mind My Music collection has seen the addition of less than 12 CDs since 1997ish. Where I'd say a +65 % of my video collection was acumulated post 1997. My CDs have been ripped and boxed away, Vinyl is stored on a shelf in my office. Cassetes, and VHS are all but gone. DVDs and Blu-ray shre shelf space with our PS2/PSP/PS3/DSi video games

In my Experiance the people I know who were born pre-1982 tend to have accumulated large physical libraries of music with significantly smaller Physical video libraries. [Side note: those who I know who are the "exceptions to the rule" were always people who did not have cable/sattelite tv]

I'm also curiosu about how we react having been rasied to "own muisc" but "rent Video"

In short I wonder Does a large exisiting physical library help or hinder a person's migration to a digital Library and have we "Blockbustered" ourselves out of Owning video.

[fletch2]

I have a lot of DVDs, many of which are things that I once owned on VHS and replaced. I also have things I have never got around to viewing (things bought while abroad that looked interesting, gifts that sort of thing.) Now I have an iPad I can see some of that material being transfered to iTunes to allow me to catch up on it as I travel. I have bought some episodes of series from iTunes and I have taken advantage of "free" episodes when offered (a good move by the companies IMHO Faox goy 5 box set sales and regular time shift viewing of Bones by gifting some season openers.)

[fletch2]

Fletch2, the only technical note I would add is that "digital copies" are stored locally, on the Blu-ray or DVD disc containing the player-formatted movie. You go on-line and type in a serial number (included with the disc) only for the purpose of activating the digital copy and authorizing the hardware to play it. I have not yet made the jump to Blu-ray (I own two discs, but not a player), and all the digital copies I've seen thus far have been in WMV format — off limits to a Mac user. I can play WMV via Telestream's "Flip4Mac" plugin, although that cannot handle encrypted WMV.

Not true for Mac users. Put your digital copy into a Mac and it opens Itunes and prompts you for your licence code as a "coupon" then downloads it from Apple's servers. I did this with 3 bluray bundled "digital copies" just last week from Fox, Warner and Paramount and they all did the same thing.

[Metryq]

Well, son of a gun! Thanks, Fletch2. I tend to rely on Handbrake and MakeMKV, but I'll have to give it a try.