Apple video iPod+iTunes could create mass audience for video on the go, despite studios’ misgivings

“When Steve Jobs unveiled the much-anticipated video iPod in San Jose on Oct. 12, it was immediately clear that Apple Computer’s latest gizmo will not transform movies the way the iPod and iTunes have revolutionized music. At least not right away,” Peter Burrows writes for BusinessWeek. “There were no movie moguls on hand to help Jobs unveil an online store for full-length features. Selling movie downloads is a lot more complicated than selling singles and albums. Studio bosses continue to fret about piracy, and they are loath to give up a distribution model that allows them to release the same movie over and over in different formats.

“That’s not to say Apple hasn’t again stolen a march on its rivals. Along with the video iPod, the company unveiled a slimmer iMac with a remote control that allows people to use the new computer as a home entertainment appliance. And the Disney deal could lead other TV studios to offer content for $1.99. ‘Only Apple could have brought this together,’ says Van Baker, an analyst with Gartner Inc.,” Burrows writes. “Still, the day when movies will be downloaded to iPods likely remains far off.”

“Jobs is well aware of the hurdles, which explains why the new iPod is a baby step to get a foothold without spooking the studios. But he may be betting that Hollywood will soon be ready to cut a deal. Disney’s willingness to let Apple sell its TV shows is a sign that compromise may be in the air,” Burrows writes.

Full article here.

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18 Comments

  1. The Apple Digital Rights Management (DRM) puzzle comes into focus and it didn’t take an Intel powered box with a DRM chip inside to do it. You’ll be able to download video content to your computer and save it. You’ll also be able to move content to a video iPod to make the content portable. The iPod is the transport media instead of CD or DVD. Simple. Makes content easy to use and access. It’s also easy to create content for the system yourself using QuickTime Pro and all the other free production tools included with a Mac (iMovie, Garageband). This is going to be big for Apple and sell a lot of the new models.

  2. Macs King has a good point, I’m just downloading ‘Boundin’ from iTMS and it’s going on my iPod ‘also with video capabilities’ when it arrives (ordered it today). Also loads of my skateboard films (admittedly downloaded from P2P) will be going on, and if I can buy Sin City for £8.99 in the format they are currently offering I will buy that as well as others if they become available. Classics such as One Flew Over The Cuckoo’s nest and Full Metal Jacket would be cool as well. m4v files too, protected ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  3. This guy is an idiot. Those baby steps will appear to be huge footprints once we get far enough beyond this announcement and see what Jobs & Co. again have transformed. The iPod/iTunes dynasty wasn’t created in one day (nor was Rome). As I recall, no music industry executives too the stage at either the iPod, the iTunes, or iTunes Music Store unveilings. At least he got Iger to say a few kind words. Iger by the way, is trying to dig Disney out of the whole Eisner left them in so, partnering with Apple was probably a “must” rather than “we’ll think about it” at this point. All the better for Apple.

    What gets me about this whole thing, is everyone wants to see where Jobs is going to “take us.” Well, he may have a few things figured out, but what he’s best at is not predicting and betting on the future, rather innovating and reacting to the future you the consumer want. A really unique but not magical quality in a market driven consumer economy. I’m the first to salute the guy’s genius, but even more impressed with his poise and stamina to pooh-pooh and befuddle amateurish analysts.

  4. The author of this article seems to be trolling MDN for material.

    I hate to sound like one of those ‘knew-it-all-before-him’ posters, but I wrote a lot of this yesterday:

    http://macdailynews.com/index.php/weblog/comments/7205/

    Macs King says: “The Apple Digital Rights Management (DRM) puzzle comes into focus and it didn’t take an Intel powered box with a DRM chip inside to do it. You’ll be able to download video content to your computer and save it. You’ll also be able to move content to a video iPod to make the content portable. The iPod is the transport media instead of CD or DVD. Simple. Makes content easy to use and access.”

    I agree with the last part, but not the first. You’re right about the iPod – in fact I’ve been arguing that this whole BluRay vs HD-DVD debate is pointless on the basis of ‘technological superiority’, because in fact devices like iPod (though probably flash based versions) are going to be the way we collect, store, and play our media within 5 years or so. Read only optical disks and players will be legacy systems by then, so the smarter move is to go the cheapest route (HD-DVD), not the most advanced/expensive one (BluRay). Mark my words, even if the BluRay group was the sole standard, they’ll only just recoup their investment with the future bearing down on them. If both formats insist on fighting it out, financially BluRay will be an even bigger loser since it will be splitting a market on the verge of extinction. iPod is a big honking road sign, showing the path we are alll on. Even so, HD-DVD can make money in both environments, thanks to being only a tenth of the investment cost.

    But Intel’s DRM is still key to the End Game. There’s a couple reasons we only have below standard definition TV shows and videos right now. The main one is that, if the software DRM of Fairplay is hacked (and it will be) you won’t have DVD quality versions of “Lost” flying around on BitTorrent. And movies? Forget it – no studio will be willing to release their stuff, especially in High Def, until a hardware DRM scheme is in place. In conjunction with Fairplay; even better.

    That’s why we’re getting Macintels in June 06 and never going back. They won’t be better computers – even multimedia computers – as compared to possible PPC offerings (the new iMac G5 should put that myth to rest, finally). However, with Intel’s TPM chips, they ARE the enabling device – the thing that will go as far as possible in putting Hollywood’s piracy fears to rest – allowing for Jobs’ brave new video world.

    “It’s also easy to create content for the system yourself using QuickTime Pro and all the other free production tools included with a Mac (iMovie, Garageband). This is going to be big for Apple and sell a lot of the new models.”

    Yeah, I can’t wait to see what the future brings on this front. I’m very torn regarding the loss of PPC just for the sake of being ‘locked down’ for A/V purposes. I can see the potential good, as well as the bad, and I’m not convinced the tradeoffs will be worth it. But when it comes to the power that these thinsg you mention bring to the average Joe/Jane, we’re in for a time of real consumer driven paradigm shifts in may ways.

    Maybe that will be enough to keep the onerous aspects of hardware DRM at bay, but I think we’re all going to have to keep out heads on a swivel regardless. It could be a Brave New World, or we could wind up losing some important freedoms of choice – it’s up to us.
    ” width=”19″ height=”19″ alt=”cool smile” style=”border:0;” />

  5. HiDef = 1920 x 1080i (or 720p)
    PAL (EU) TV = 720 x 625i (576 visible)
    NTSC (USA) TV = 720 x 525i (480 visible)
    iTunes video = 320 x 240

    i = interlaced (every odd line refreshed each frame)
    p = progressive scan (whole screen refreshed each frame)

    To figure the file size before compression then multiply the above dimensions x 30 frames per second x length of video in seconds x 3 channels (RG&B) ÷ 2 for interlaced (i) video ÷ 8 bits per byte ÷ 1024 bytes per KB ÷ 1024 KBs per MB÷ 1024 MBs per GB.

    30 minutes of uncompressed video are:
    Hi Def 720p = 26 GB
    Hi Def 1080i = 19.5 GB
    PAL TV = 4 GB
    NTSC TV = 3.5 GB
    iTunes = 741 MB

    Consider a movie at 2 hours length is about 4 times that size. Thus the big hoo-hah over the next generation of DVDs (Blue-Ray 50 GB capacity vs HD-DVD 30 gb capacity).

    Now MPEG-4 compression can reduce the above file sizes by 50-60%. But even compressed these video files will fill up a hard drive very quickly. Keep in mind the the 500 GB hard drive option in the new iMac (which is the largest single hard drive available for any computer today) will still fill quickly with just a small handful of video downloads.

    That’s why there are only 5 shows available for download. Apple needs to explore the market, pray for larger hard drives, and get the broadband infrastructure in place for higher quality downloads to rule the roost.

    Consider that most broadband in this country is controlled by the cable companies. What incentive to they have for running a video capable pipe to your house?

    Now Odyssey67, you’re correct in 5 years it will be a different story, but today that isn’t the case.

  6. Well, the studios better embrace some for of legal digital download system for their movies soon – piracy on the web is a growing problem for them, and one that will get a lot worse very quickly if they sit on their hands …

  7. Tommy Boy makes an excellent point regarding file sizes, etc.

    When I first saw some demo H.264 video a few months ago, I was convinced that it would be the “missing link” for delivering good-quality video over the Internet, thinking in terms of legal downloads and a viable alternative to purchasing DVD’s. And it may yet be, but judging from the video downloads from iTMS right now, it’s not.

    I happily ponied up the two dollars to download an episode of Desperate Housewives last night, expecting quality similar to that in those early H.264 videos. Needless to say, I didn’t realize the video was delivered at 320×240.

    It looks fine in a smallish window and I’m sure it’s great on an iPod. But much has been made of the TV-output capabilities of the new iPod, and frankly, considering the current level of quality, I’m not convinced of that feature’s value. That episode I purchased last night is watchable, but not great, full-screen on my 12″ PowerBook… but it’s positively miserable when I run the ‘Book to my 42″ plasma screen. I think I’d rather watch a well-used VHS recording on the plasma than that downloaded video.

    I’m optimistic about the future, but it’s not here just yet.

  8. Adam,

    I’ll bet the “external monitor” output would look much better if you output to a standard television (NTSC resolution) or if you set your Powerbooks’ resolution lower (640×480?). The less that the 320×240 file needs to expand to be able to fill a screen, the better. Also, it’s probably stretching disproportionally to fill your plasma – which also messes with the image quality.

  9. If any company can overcome the hurdles involved in making movies downloadable, it’s Apple…

    Well they don’t actually want to do that..

    Time to download a full length movie.. er.. 2 hours? Who knows…

    Hmm.. at that rate, could you just stream.. watch it as you’re downloading, ala QT? Hmm.

    Oh well.. For now… the line will be ‘broadband can’t handle Movie DLs.. just short DL’s and shows….

  10. Tommy Boy:

    I’m not disagreeing with you at all regarding the reasons you give for Apple keeping the resolution sizes low. In fact, if you click on the link to my other post from yesterday, you’ll see that I layed out pretty much the same argument (minus the size calculations – good onya there).

    As for those file sizes and the next gen disk battle, you and I do seem to disagree. Assuming the highest quality resolution you cite, compressed video sizes (104GB for 2hr movie = approx. 42-52GB) would clearly push to breaking even the most extreme of HD-DVD’s demonstrated limits (45GB triple layer). However, BluRay isn’t in much better shape, as it’s dual layer disks at 50GBs are also under the max size. And there is NO version of BluRay that has demonstrated going above that – theoreticals aside, all talk of 100 to 200GB versions aren’t even past the lab stage, if that.

    So, the first couple of years both versions will actually be inadequate for anything more than a barebones movie on one disk. IF BluRay manages to get triple and quad layered disks out it will buy the optical format some useful time. But I don’t see that happening for at least another year AFTER next year’s initial launch (so 2007-08), and by then – I believe – the ‘end times’ for optical disk’s pre-eminence will already be at hand. So, in a real sense the question is how much should be spent propping up a format that we can already reasonably assume is Dead Man Walking? I think ‘less is more’, in this case.

    I realize that 5 years is 5 years, but remember that were not talking about a lightswitch transition – more of a process; one that’s already underway. Looking for optical disks to be on top for that entire timeframe, I think, is looking for too much. iPods and their brethren will have taken over by then.

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