Analyst: Apple TV could hurt DVD sales and rentals

Apple Store“The average US home now has more televisions than people, according to Nielsen, with 2.8 sets compared with 2.5 people,” Aline van Duyn reports for The Financial Times.

“Connecting the 110m US households that watch television with the hundreds of channels that they increasingly demand is a hugely profitable business for cable and satellite operators, such as Comcast Corp, Time Warner Cable and DirecTV,” van Duyn reports.

van Duyn reports, “However, there is a question whether the imminent introduction of Apple TV – potentially the most user-friendly device yet to allow people to set up a wireless connection between their television and computers and watch video content stored on their hard drives – could undermine the business of cable and satellite operators.”

“‘It [Apple TV] isn’t the first attempt at solving the ‘last 10 foot problem’ of connecting the PC to the TV but in light of Apple’s track record with music it is likely to be regarded as the most credible,’ says Douglas Shapiro, analyst at Bank of America,” van Duyn reports.

van Duyn reports, “The Apple TV does not offer unlimited access to video on the internet but instead mainly allows users to watch content stored on Apple’s iTunes online music and video service. As a result, Mr Shapiro says it is a ‘supplement to traditional pay-TV: it isn’t a threat to cable or satellite within a reasonable investment time horizon.’ The real loser of a successful Apple TV launch could be DVD sales and rentals. ‘Efforts to connect the PC to the TV, particularly Apple’s, could eat into the home video rental or DVD sales pie,’ says Mr Shapiro.”

Full article here.

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26 Comments

  1. My old computer networking text had a line to the effect “Never underestimate the bandwidth of a truck full of computer tapes, driving down the highway.”

    Updating that for today, that might be “Never underestimate the bandwidth of a delivery from NetFlix.” (BlockBuster, etc.)

    While my Time Warner Cable Internet brags about 10 mbits/sec, I only get that with their speed test site. Too many other switches in the line between me and all the servers out there. Call me paranoid, but it is in the cable comapnies interest to throttle Internet video delivery from other companies.

    So while Internet delivery of video holds promise, don’t count out physical media in the short and medium term.

  2. Apple TV could hurt DVD sales and rentals

    What?

    I’m sorry, Netflix rules for the lowest rental rates. One could easily watch a movie a day for around $20 a month.

    Then there is the bargin basket at Walmart where DVD’s go for under $6.

    Of course a lot of DVD stores are now selling trade-ins at less than new prices.

    iTunes movies are a rather expensive option and they CLOG THE SHEIT OUT OF YOUR HARD DRIVE.

    Since one has to burn a copy of their movie anyway for backup, might as well buy the DVD.

  3. The cool part is you can count on Apple in the long run making this another money making platform for the company.

    It will do very well to start.

    A year from now it will be in every dentist office, collage campus, dormroom, connected to everyone tv

    go apple

    change the world again

    thank you

  4. So, those of us who buy DVDs, most loaded with extras(particularly the two-disc SE versions), are going to forgo buying a “real” copy of a movie to take our chances with a downloaded copy left on a hard drive, or take an extra step to burn our download to disc, all for $14.99 or whatever.

    At least for the moment, the sound and the video don’t compare to even SD DVDs, much less HD discs. That may change, but the download time will be much longer.

    I agree with a couple of posters yesterday-I love Apple, and I like the bridge that Apple TV represents, but it will be a relatively niche market, until movie rentals on iTunes appear, and even then it should have little effect on BUYERS of DVDs, for the reasons listed above.

  5. I don’t think Apple TV is a threat to existing media outlets as such and I don’t think its supposed to be. I think that it is a first step in tying our digital lives together. If people are looking for it to replace their DVD player or cable box then they’re going to be disappointed. The people who will get the most out of it will be those people who make their own content, who make home movies, who take photos etc. It will supplement iTunes and possibly even increase its use and video sales will be helped but I don’t think it’s the be all and end all of the device. It’s a solid, easy solution which will hopefully gain acceptance with the public and open the door for more advanced products and integration of products.

  6. “Apple TV could hurt DVD sales and rentals”

    LOL!
    Living outside of the U.S. one gets DVDs in either the original language (English) and the local language (spanish,italian, german). So one can watch in either language. Can a download from Apple over that?
    Plus one gets lots of other extras with many DVDs.

    Niche product for Apple tech heads.

  7. My question and maybe someone here can answer it.

    Can you burn your movies and television shows to a DVD or other Archive source? How do you protect your investment as you can with purchased music?

    If I can’t back up my video I not likely to buy many.

  8. Just me, but I think that iTunes and Apple TV are the perfect compliment to regular DVD and TV.

    I get most of my TV from DVD or broadcast, but if I am having a party or friends over, I can punch up iTunes, download my movie / tv, have the party and see the show when we are ready, pausing as needed and then,who cares. trash it.

    Yea its 15$. So what! the chips cost more than that. See, its a disposible world and if I really want to save it, no sweat. MY OPTION !!!!

    New words for technology. . . . . MY OPTION..

    JMHO

    ne

  9. @ Wally Wallet and his ilk–

    Remember when automobiles introduced windshields? I’m certain you don’t, because it was so long ago. At the time, it was fairly unimportant, but by today’s standards, revolutionary and necessary in any number of ways. You use it constantly, take it for granted as if it’s designed by nature, and likely only notice it if you have a complaint.

    Apple is starting something here. Starting. They have implemented the whole widget– content to device– beginning to end. The full model is less than a week old, yet you’d complain about it? Give this some time. It will shortly change everything you do with media.

    I think it’s great that you love your DVDs. In 50 years, will you love them so much? Chances are, you’ll have embraced a new tech if you’re still around. Chances are that at that time, you’ll also have no vision of where that tech began.

    MDN “world” as in Yeah, whatever.

  10. How large are the Apple movie downloads on average?
    I expect you can back them up to DVD as a data file.
    So far I haven’t seen anything in the movies Apple offers that would cause me to part with 10 bucks yet, not even Barbarella.

  11. it would be cool if purchasing a movie on iTunes gave you the right to stream it/download & trash it whenever you’re logged into your account… then movies wouldn’t fill up your hard drive. This would also allow them to upgrade the video quality and you’d have the ability to stream it in it’s higher resolution.

    They could also add rentals in this way… you can steam/download a movie for a week, or until you want to get another one.

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