Research Study: iTunes Video Failing To Duplicate Music Success

[MacRumors]

Forrester Research, Inc has released a new research study that is critical of Apple's iTunes video attempts, and states there is room for competition in the industry.

The iTunes video experiment of selling TV shows for $1.99 and movies for upwards of $9.99 — although a great service to the 4% of online adults who regularly buy video on iTunes — is not a mainstream model. Importantly, it won’t translate into what Apple really wants: increased demand for sophisticated hardware like the iPod touch and Apple TV.

Forrester conducted an online survey of 5,379 US and Canadian individuals aged 18 to 88. Forrester believes that only 4% of the online population buys iTunes videos, in contrast to a total of 19% iTunes store consumer population. Forrester acknowledges that while those 4% are satisfied with their service, the iTunes video store will remain a curiosity rather than a game-changer.

One of the pitfalls mentioned is that there are currently easier ways to get [free] TV shows, including consumer DVR's and services like NBC Direct. Furthermore, Forrester calls out Apple's lack of a catalogue of hit movies. One result of Apple's video misfortunes is that although awareness of the AppleTV is at 45%, the purchase intent is only at 3%.

In an open letter to Apple, Forrester suggests it's time to change their video game plan, including winning NBC back (background), adding a movie rental model (rumored), funneling more web content into iTunes, and supporting an advertising model for TV shows.

Article Link

[twoodcc]

maybe now they'll start offering HD video, so i can start buying

[Squonk]

I want HD content and movie rentals on the music store. And for TV I want HD or BR and surround sound support. Thank you.

[SPQR]

The choice of Movies on iTunes is pretty poor. Reminds me of years ago when our local store had a couple of shelves full of VHS video's for hire. The owner didn't think there was much of a market - and then Blockbuster arrived near by.

[shoffmueller]

and iTunes music is successfull because people buy music, not rent. Opposite consumer preference for each product.

[davidtoronto]

Last time I saw, we Canadians didn't have access to any feature films on iTunes. Maybe if that changed, the statistics would improve.

[SthrnCmfrtr]

iTunes won't present a serious alternative to piracy until they can lower the prices and raise the quality. Unfortunately, that's not really up to Apple.

Every sensible person is aware that, regardless of ethics, a black market will appear if pleasant options do not exist. With the black market firmly in place, especially one as efficient and relatively risk-free as BitTorrent, is this news really surprising?

The content providers and creators are still stuck on a concept of preserving their historic profit margins, even though it's clear to most of us that they'll have to compete with the (free) black market just to survive.

[Avatar74]

Here we go again. The same moron analysts (mind you, not ALL analysts are morons... I'm an analyst ) who said the iPod would go "nowhere", and then on scant third party data claimed iTunes sales were collapsing, are tooting their horn yet again about iTunes Video.

Well, it certainly didn't die back when I posted this rebuttal on Slashdot to their earlier misgivings that they are simply repeating ad nauseum.

While the Forrester article has the appearance of news, it's just more hot air to further discredit the internet as a source of newsworthy information.

The strategy Apple is deploying is going to take some time to seep into the public consciousness, something Forrester doesn't grasp. iPods were not a success overnight... they were around for three years before they really took off... and it was that "doomed" iTunes Music Store that, once it found its footing, contributed to the success of the technological convergence model Apple is building upon. The same model of technological convergence that involves various pieces of the puzzle.

The truth is, video sales have been stellar for Apple more than they have for any other online outlet. If anyone can make it work by sheer will, Apple has that ability. Note that I am not claiming what WILL happen in the future... I just think Forrester has a history of being a harbinger of nonsensical "research" and unsubstantiated conclusions.

[SthrnCmfrtr]

Originally Posted by shoffmueller

and iTunes music is successfull because people buy music, not rent. Opposite consumer preference for each product.

A penetrating observation. Amazing to me that multi-billion dollar corporations can't seem to grasp what every young family already knows instinctively.

[Orup70]

For an interesting comment on the report by Daniel Eran Dilger at RoghlyDrafted Magazine:

http://www.roughlydrafted.com/2007/1...-itunes-again/

There seems to be some errors and mistakes in the report...

/ Påhl

[Luveno]

Originally Posted by Macrumors

Forrester conducted an online survey of 5,379 US and Canadian individuals aged 18 to 88. Forrester believes that only 4% of the online population buys iTunes videos, in contrast to a total of 19% iTunes store consumer population. Forrester acknowledges that while those 4% are satisfied with their service, the iTunes video store will remain a curiosity rather than a game-changer.

US *and* Canadian individuals? We're still not able to purchase video in canada, beyond pixar short films, and music videos. I ordered an AppleTV at launch, because I thought Apple would finally start selling video in Canada. How wrong I was. Here I am, nearly a year later, and my AppleTV is still under utilized because I can't buy video to play on it. If video were available in Canada, I would easily spend $50-$100 a month on tv/movies.

[apollo8fan]

Video quality and resolution are important to me. This 640 pixel wide crap is for the birds.

[Loge]

Originally Posted by Macrumors

and supporting an advertising model for TV shows.

yes, that's what people want - more adverts!

Oh, and $279 to read the article, I think I'll pass.

[ccunning]

If they ever offer HD TV shows at reasonable prices, I will drop my cable subscription.

If they ever offer a "rental" model for movies I will drop Netflix.

If they offer HD movies for purchase, I'll start buying movies again and stop worrying about the high def disc format wars.

[Consultant]

Um, this "research company" almost never have good Apple related report.

They are just trying to grab headlines with negative news.

Last week they said "iTunes needs NBC back", when in reality iTuns is what made NBC's shows popular.

[ifjake]

i'd use iTunes for movie rentals, because there's no way to get the movie onto external media for playback, only just as a backup, and i don't have near the space to begin buying movies and actually holding on to them. and at that point if i'm just holding on to movies while the rental is good, they might as well be DVD quality at least. HD would take too long to download.

[Iroganai]

I hate Ads in TV shows. I once tried to watch The Office on the new NBC website, and the excessive ads sucked. Why do we have to see ads on PCs/Macs ? I'd gladly pay some money instead of forced to watch ads.

[reckless_0001]

Originally Posted by davidtoronto

Last time I saw, we Canadians didn't have access to any feature films on iTunes. Maybe if that changed, the statistics would improve.

That's exactly what I thought when I read that. "Why interview Canada? We don't have videos in iTunes. If we did, I'd buy em like cah-razy!".

[Avatar74]

Originally Posted by Orup70

For an interesting comment on the report by Daniel Eran Dilger at RoghlyDrafted Magazine:

http://www.roughlydrafted.com/2007/1...-itunes-again/

There seems to be some errors and mistakes in the report...

/ Påhl

While I'm not convinced of roughlydrafted's sense of journalistic integrity (they get info wrong too) they do make some very good points about McQuivey which I've made previously on Slashdot... see my above post.

[super_kev]

The TV needs to have HD and 5.1 surround support, and then I'll pick it up. Most people have setups like that these days, so there's no reason why the TV shouldn't have it.

[merge]

Quite simply...
People want to own music.
People want to rent movies.

Maybe not everyone... but in general. Those 2 rules apply very well.

Make an TV with DVR, sell it dirt cheap, and sell a subscription based rental services and apple would do to movies what they did to music.

[Peace]

Originally Posted by Loge

yes, that's what people want - more adverts!

Oh, and $279 to read the article, I think I'll pass.

That's exactly what the industry wants.

Originally Posted by Consultant

Um, this "research company" almost never have good Apple related report.

They are just trying to grab headlines with negative news.

Last week they said "iTunes needs NBC back", when in reality iTuns is what made NBC's shows popular.

iTunes does need NBC back and Jobs better give in.

Originally Posted by Iroganai

I hate Ads in TV shows. I once tried to watch The Office on the new NBC website, and the excessive ads sucked. Why do we have to see ads on PCs/Macs ? I'd gladly pay some money instead of forced to watch ads.

Everybody hates ads except the advertising industry and the studios that pay them money.
I've been testing Hulu.com for a while now and it works rather well utilizing flash,java and the H.264 codec. NBC has actually done a good job.

[Dicx]

My Apple TV has been gathering dust the past few months, unless something changes it will continue to do that.

[emotion]

From a UK perspective the price ($ almost equals £ ?!) is a massive put off.

Most people here have DVRs now anyway. Apple need to get into that. However, they won't because it is contrary to their business model.

Edit: Remember it's people's own CDs that filled iPods and made that device popular (at least initially). If Apple could do the same for DVDs and had DVR functionality in AppleTV then they'd be selling lots of AppleTVs (and maybe even more Mac Minis as home servers for this content). Off the back of that they then have the foothold to sell stuff on the store.

[Stella]

Its not suprising since Video is only available in two countries - the UK and u.s.

Also, it doesn't help that NBC content has gone...