Analysts: Amazon’s ‘Unbox’ to be ‘Unsuccessful’ vs. Apple

“Amazon’s Unbox movie downloading service launched last night. Sadly, I think it is going to go nowhere. Why? Because it’s not a service designed to meet the needs of real users; instead, it’s all about protecting the studios and accepting Microsoft’s very limited view of consumer rights in the digital world,” Carl Howe writes for Blackfriars’ Marketing.

Why so negative? Because Amazon’s Unbox service provides:

• No living room experience.
• No guarantee of a good portable experience.
• No support for anything other than Amazon’s Media Player on a hefty Windows XP computer.
• No discount for all these restrictions.

“I predict you are going to see a very different service from Steve Jobs next week, and consumers will get to vote with their wallets for which version they prefer. But Jobs at least understands that any movie download service has to create a rich, valuable experience for the consumer, and not just be a way for studios to pocket more money for less work. And until someone else in the digital media business starts to understand that balance, Apple will continue to rule paid digital downloads,” Howe writes.

Full article here.

Michael Gartenberg writes for JupiterResearch, “It’s an interesting move but the real issue is where will you watch these things? There’s no way to burn content to DVD for playback and unless you have a media center PC or some inclination to hook up your TV to your PC, it’s a pretty much PC only experience. While Amazon does support some devices for WMV playback, the site had the following warning notice.”

Supported Devices

The devices in the list below have been tested with the Unbox Video Player. If your device is Plays for Sure compliant it may work, but we cannot guarantee performance on untested devices.

Creative Zen Vision: M
Creative Zen Vision
Toshiba Gigabeat S
Archos AV 500
Archos AV 700
iRiver PMC (Portable Media Center)

Gartenberg writes, “Not exactly a ringing endorsement, Plays for (Almost) Sure strikes again. We’ve said it before and we’ll say it again. The iTunes music store succeeded because of the iPod, not the other way around. iPods drove people to the store. Without a compelling device story (and it’s not clear YET whether Zune will play protected music or video from Plays for Sure services) it’s hard to see this as a real threat to Apple.. for now. Pricing isn’t likely to drive folks to use this so for now it’s mostly a mobility story without a super interesting mobile device to use it with.”

Full article here.

Related articles:
Cringely: Apple, Amazon, and what Steve Jobs has up his sleeve for next Tuesday – September 08, 2006
Amazon.com launches ‘Amazon Unbox’ DVD-quality video download service with TV shows and movies – September 07, 2006

45 Comments

  1. bond co. stooge: It’s actually a tribute to a Mac discussion thread troll on macobserver.com years ago when I hung out there. It’s name was Voltar and the anti-Mac spew was quite entertaining similar to MDN’s Sputnik but more vitriolic and venomous. It was funny stuff! So, I lurked for awhile and then joined the fray as Ampar because . . .(drumroll) . . .

    “One should not fear the volts, it’s the AMPS!

    The shocking truth.

    – Ampar

  2. Hmmmmm, I went to the site and read the latest post by Michael. “Posts by Michael Gartenberg (bio)—Amazon Unbox – Well that didn’t work at all | September 8, 2006 03:49 PM”

    “I figured I’d try to download a vide or two for my flight to SF next week. First step, finding some content. Excellent,…..I click troubleshoot. It tells me it’s checking stuff like DRM. Everything checks out. Message pops up. You have used all licenses for this file. If you want to watch it on this PC, you need to purchase it again.”

    I tried getting a song from a site with MS audio DRM. The same thing happened. It takes money or credit, downloads song, and then . . . . nothing. “You have used all licenses for this file. If you want to listen to it on this PC, you need to purchase it again.”

    MS. Much Sh*t, Breaks for sure.

    Never again, ever.
    N.

  3. “One should not fear the volts, it’s the AMPS!”

    Guess you had to be there. ” width=”19″ height=”19″ alt=”raspberry” style=”border:0;” />

    Brainy, you must be thinking of Ohmpar.

    (Jeez, that was weak. It’s Friday, and I’ve been herding cats–I mean teaching kindergarten–all day. Sue me.)

  4. “I agree, it’d be great for the consumer, but unfortunately, there is no money to be made in this model for anyone. Enormous server and maintenance costs for Apple with no real reason to drive people to buy Apple hardware…”

    Not necessarily, RC. If for your $3-$4 rental you get to keep a thumbnail movie (OK, a fairly big thumbnail) – Fairplay DRMed for exclusive iPod use – then Apple keeps its hardware incentive very much alive. And I’m sure that keeping a few Apple server farms up and running demands a LOT less in overheads that keeping a large network of BlockBuster video stores on its feet.

    And for Apple (unlike Microsoft) the consumer is ALWAYS king!

  5. Not necessarily, RC. If for your $3-$4 rental you get to keep a thumbnail movie (OK, a fairly big thumbnail) – Fairplay DRMed for exclusive iPod use – then Apple keeps its hardware incentive very much alive.

    ————–

    Yes, but there is not even a remote possiblitiy of the Hollywood studios agreeing to allow their movies to be sold for $3-$4 in any format. Even 320*240 sized iPod only format which would still take hours to download and cost Apple a bundle.

  6. Twenty Benson, there is currently one movie for sale at the iTMS,( Disney’s high school musical) and it sells for $9.99 as an iPod sized file. I agree with RC, there’s no way we’ll get movies for three or four bucks.

    As much as I’d like an online rentaal store, I don’t think this is where Apple is headed.

    DVD sales are a 17 billion dollar a year industry, this is what Apple is going after.

  7. Given Michael Gartenberg’s comments on Unbox over at jupiterresearch.com, and knowing that he is NDAed into this Apple stuff, and noting how he’s so eager to sign up people for conference next Tues after Showtime, I’d say it’s almost a certainty that Apple is connecting iTunes on Mac or PC to the TV in some fashion.

    I’m not so certain that Apple will sell LCD/plasma TVs as Cringely and Howe think, but I’d lean that way given the lack of updates to the Cinema Display, and the new 24″ iMac.

    And a new video iPod is a given. But will it be full and touch screen? Maybe, given Gartenberg’s enthusiasm.

    The nano update may be delayed a week or two because it’s not related to Showtime, unless it too is full and touch screen. But I’d think Apple doesn’t want Sandisk shipping for long before it gets its new nano out.

  8. Trevor, Video is very very different from Audio. If Apple don’t build a movie service around an inexpensive core rental model it will not be successful. Their project is how to incentivise this model to shift Apple hardware. Perhaps an iMovie store will be built along the lines of a traffic light system – RED = 2-day HD rental ($3-4), AMBER = LD (iPod) buy ($10), and GREEN = HD buy ($15) with the second two being options following on the first initial purchase.

    Of course, the video Airport will be an essential piece of this model too.

  9. I’m not convinced about the LCD/Plasma TVs, either.

    One of the reasons has to do with a comment made by Jobs years ago about Apple entering markets where it can do “something special.” What “special thing” can Apple do with TVs? Short of sticking an Apple logo on a TV, not much.

    Personally, I think the Airport Express video and the iPod video is the best bet in the hardware department for Apple to make money selling movies.

  10. ” … but I long for the days when Triumph and his dog wit posted regularly.”

    Listen … de only point this article makes is that Amazon and its “Unbox” will be about as useful as tits on a bull. Seriously, they should just call this service “Unsuccessful” or and be done with it. Or maybe “Unused” would be more appropriate.

    Come to think of it, I found some use for tits on a bull once, but it was late and Snoop Dog was involved, so … it’s a long story.

  11. “As long as the suits in Hollywood use their Draconian DRM to prevent me from watching the movie I want on any device I want, all these services will fail.”

    Poor Jeff. I can just imagine him sitting there, alone in his chair, saying the same thing about the iTMS. “It’s gonna fail!”.
    Man, I’m telling ya, Apple’s “Draconian DRM” scheme sure made a loser out of the iTunes store, didn’t it?
    Give it a rest, already.

  12. Seems that the key to Tuesday is what is going to make Apple’s verion better than Amazon… there may be 2 answers – ability to play through your TV/Home Cinema and/or new video iPod. With playing it through your TV…

    WILL IT BE A UNIVERSAL PRODUCT THAT WINDOWS USERS CAN USE?

    The pros for this is that it can directly compete with Amazon and will attract the majority of iTunes customers.

    The pros for making it MAC ONLY is that it will be yet another reason for people to make the switch.

    So… can apple take the risk or will they need to appeal to Windows users to maintain the lead in the video download market?

    I’m still not a great believer in portable movie watching but it seems there’s a market for it. I watch movies using a HD projector on a 100″ screen… 5″ doesn’t really do it for me!

  13. Carl Howe (first article) says: “No discount for all these restrictions. With … restrictions and by reducing the need for … a disk, a case, and supporting materials, you’d think that consumers would be seeing hefty discounts over buying a DVD… Think again. When I shopped for a DVD of “The Matrix” it cost cost $9.88. When I shopped for the same movie on Unbox, it cost … exactly the same. And the DVD I can play in my living room or on any computer in my house, rip to a file that will play on my Video iPod, and even sell to someone else when I’m done with it.”

    Michael Gartenberg (second article) says: On Sept 7 “… the real issue is where will you watch these things? There’s no way to burn content to DVD for playback and unless you have a media center PC or some inclination to hook up your TV to your PC, it’s a pretty much PC only experience…”; and on Sept 8 “I figured I’d try to download a vide or two for my flight to SF next week… an old Star Trek episode… Message pops up. You have used all licenses for this file. If you want to watch it on this PC, you need to purchase it again. OK. We’re done… Time to un-install this thing and hope it didn’t screw up my PC in the process. $1.99 wiser. I’ll say it again, we understand DRM is necessary to make the content available but it must be DRM that works and NEVER locks a customer out of their content…”

    These two quotes, especially the latter, illustrate what astute people have said from the beginning; that over DRM’ing this venture will kill it in it’s crib. I’ve aslo been saying that Apple, with prices reportedly being just as high as Amazon’s, MUST attack this from the angle of making their downloaded file ubiquitous. A ‘master file’, from which various files can be transfered (or wirelessly streamed) to any & alll devices Apple makes. They need to leverage their hardware advantage to the hilt.

    With prices for DVDs so low, and the ability to rip the so easy, it makes no sense at all to pay equivilent prices for digitized (and thus cheap for the producers) video files, UNLESS you can securely move them around to approved devices without hassle. Want a version for your iPod? No problem – here’s a sub std def file for you. How about your computer? There you go – a version that plays at whatever definition your laptop/desktop can handle (PPC Macs will probably have some artifical restriction here, as they have no TPM chip). And a full-blown 1080p version will go to – hopefully – the soon-to-be-announced Apple vMac HDTV with HDMI wireless connectivity … all for the same $14.99. You pay ONCE, own it, and as long as it’s going to an Apple device (maybe even an Apple Phone??), iMovie or iTunes will crunch it appropriately on the fly & you’re on your way.

    I’m especially hoping Gartenberg’s experience indicates why Jobs got froze out by all the studios except Disney. I hope he’s rolling out something like what I just described, has wised-up regarding how foul these studios & their DRM ideas have always been, and is willing to show them how it’s done regardless of the total content disadvantage. As soon as Apple’s slight menu starts outselling Amazon’s smorgasbord, simply b/c you can actually enjoy ‘the meal’ with Apple, it’s a good bet the studios will come to Jobs and do his bidding.

    I also hope against hope that this kind of success in turn will convince Jobs NOT to over-rely on the Intel TPMs in the future. As Howe said, reasonable prices for what you get is the best DRM there is. I’ll even hope-against-hope that realization has already sunk in – maybe then we’ll get a DVR/server combo, or even the PPC machines NOT treated as red-headed stepchildren. But that may be pushing it – besides DRM, Jobs is still trying to get as many people as possible to buy new computers too.

    Still – with these commentators reporting Amazon’s problems honestly, I have much greater hope now that Jobs has seen the writing on the wall & Apple will pull out something truly phenomenal next week.
    ” width=”19″ height=”19″ alt=”cool grin” style=”border:0;” />

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