iTunes Movies and iTV are in trouble.

[thadgarrison]

The iTunes Movies and iTV have already failed, here's why:

iTunes Movies

1.) DVDs only cost $2 more. Why would a consumer pay just a couple of dollars less for a low-res movie that they could buy a physical DVD? Just so they don't have to go to the store? I don't think so. Unlike music - the movie offerings of iTunes are not priced for impulsive buying. There will be a glut of purchasing because it is a NEW feature, after that there will be a steep falloff.

2.) You can share a DVD, you can't share an iTunes movie. Unlike music - you can't burn a movie disc from iTunes to give to a friend. From an average consumer standpoint - this isn't owning movies at all - this is paying to borrow them.

3.) People only buy movies they want to collect. The rest of the time they rent. You can rent a DVD for $4.00. Apple has left out the one great convenience iTunes could have offered - instance access to rentals. Now that is something most people would love to do from home.


iTV

1.) No TV recording - Apple is relying solely on the idea that people will buy TV shows from iTunes to play on this expensive toy. That is purely absurd. The average consumer sees TV as free - they aren't going to pay for what they can record with a VCR or DVR.

2.) People have DVD players. A salesperson would be very hard pressed to explain to Joe Consumer why he should drop $300 for a machine that will play movies but only if he pays for them online and downloads them. There is no benefit, for anyone. What is iTV giving us that Netflix and TV aren't?

3.) There is no added convenience. The iTV will, in fact, become yet another machine in the living room that the consumer has to learn and take care of. Living room brain-space is precious and unless you are replacing a previous machine or two (and doing it better) you aren't going to get a chunk of that brain.

4.) High-def. The next year will see rapid price drops and greater consumer adoption. People WILL be able to tell the difference between 640x480 video and 720x480 upscaled by their inexpensive DVD player to 1080p.


So, how can Apple succeed?

1.) Rentals, rentals, rentals. $4.00, 2 days expiration right from iTunes.

2.) Make a Tivo-killer interface for watching and recording using iTV. Blast Tivo out of the water.

3.) Use the iTV to sell rentals. Pair them together the way you paired music and the iPod. People don't want to rent music, true, but people DO want to rent movies.

4.) Netflix will be on your heels with a set-top downloadable rental system this year...beat them to it and do it better.

5.) Build a burner into iTV -- let people make a limited number of copies of movies they BUY on watchable DVDs.

6.) HD baby! Apple, you've been touting that HD is the new black - so this is your chance. Blu-Ray and HD-DVD are dead out of the gate because of the format war. Buckets of gold will come to whomever can deliver HD content digitally and conveniently into the living room.

Good luck, I'm cautiously rooting for you.
- thad

 

[nickelbackmac]

It's called "iTV". I think... I'm not sure... but I think Apple may be planning DirecTV/Dish Network/Voom/ Any cable service compatibility. Just some way you could put your TV subscription on it. Otherwise it'd be named "iMedia" or something like that. The name iMedia may suck, but it was on the top of my head.

 

[Oryan]

6.) HD baby! Apple, you've been touting that HD is the new black - so this is your chance. Blu-Ray and HD-DVD are dead out of the gate because of the format war. Buckets of gold will come to whomever can deliver HD content digitally and conveniently into the living room.

Although I'd like to agree, I think you're wrong. The content providers won't give into digital HD because there's much more money to be made from selling Blu-Ray/HD-DVD. There will be a lot of pressure coming both from digital distribution companies (like Apple), but also from those who have huge investments in a particular format.

 

[DavidLeblond]

*yawn* yeah, yeah you know more than a multi billion dollar company. Don't we all.

I, myself, predicted the downfall of paying $2 a TV episode and $.99 a song. I was wrong. Quite wrong.

The movies and the iTV will sell like hotcakes. I doubt I'll buy either though.

 

[srf4real]

Your points are very valid. I won't spend the money unless I feel like I am downsizing my electronic hardware collection. Make my HD dvr cable box and my HD dvd player/recorder unneccessary, and I will rent tv and movies from Apple instead of my cable company. It should make life easier, not more complicated.

 

[balamw]

The content providers won't give into digital HD because there's much more money to be made from selling Blu-Ray/HD-DVD.

Why do you think that? Digital distribution means no manufacturing, distribution or inventory costs, and since you have already mastered the content in HD, it's just a simple format shift.

B

 

[Bibulous]

I agree they need a $5 rental with an option to buy it for $5 more after you watched it.

I purchased a movie yesterday, waited just over 5 hours for the download, then watched it. Now I have a 1.2GB file of a movie I didn't like very much. Might just delete it rather then store it on my computer. Overall not a processes I can see myself repeating very often.

 

[livingfortoday]

In regards to your movies points... aren't those the exact same points people were bringing up when Apple introduced the iTunes music store and the iPod? I can buy a CD new for $10, share it, rip it in higher quality, resell it... why pay $9.99 for the MP3's? And yet they've sold over a billion songs. A billion!

This really is no different. People will pay for the convenience of not having to run out to the movie store, and for being able to easily play their movies on their iPods, TV's, computers, whatever.

 

[p0intblank]

Your points are valid, but I am one who is very interested in the iTV. I can see myself maybe purchasing a movie or two per month and always keeping it on my hard drive. I really like the idea Apple is going with and I'll be supporting them by purchasing an iTV when it's released next year. And plus, it all comes down to conveniece. I would love to connect a Mac mini (Core Duo) to my HDTV, but $299 iTV looks much more appealing.

It's obviously not for everyone and that's okay. But like I said, I'll be getting one as soon as it's released.

 

[spicyapple]

$9.99 and $14.99 is too much to spend for a digital movie you have to download and archive yourself, plus with heavy DRM restrictions that require a $299 dongle so you can watch it on your TV.

I much rather pay a little bit more to own a DVD that I can later resell if I don't like it. There's a lot to be said for a physical commodity you can sell and trade (it's like gold, hehe).

And for really the lowest price to watch movie rentals, my local DVD rental store offers specials, eg. 7 movies for a week for $14.99 (not new releases) and I'm happy even if they aren't the latest releases.

I hope Apple succeeds but unless they try cracking the high definition market, I won't be buying into it just yet.

 

[balamw]

$9.99 and $14.99 is too much to spend for a digital movie you have to download and archive yourself, plus with heavy DRM restrictions that require a $299 dongle so you can watch it on your TV.

Doesn't sound very different than BluRay or HD-DVD, you need to buy an expensive piece of hardware and end up buying $25 media that is encoded with lots of DRM and other restrictions.

I used to do the same with DVDs buy and then resell, but the bottom has dropped out from the SD DVD market. In many cases you can buy formerly popular movies used for $1-$2+s/h on Amazon Marketplace.

B

 

[thadgarrison]

In regards to your movies points... aren't those the exact same points people were bringing up when Apple introduced the iTunes music store and the iPod? I can buy a CD new for $10, share it, rip it in higher quality, resell it... why pay $9.99 for the MP3's? And yet they've sold over a billion songs. A billion!

This really is no different. People will pay for the convenience of not having to run out to the movie store, and for being able to easily play their movies on their iPods, TV's, computers, whatever.

I disagree. I think the success of iTunes is three fold:

1.) The iPod was a huge success and iTunes was the perfect compliment to it.
2.) People could buy single tracks from an album instead of wasting money on the whole thing to only get one or two good songs.
3.) Portable music had been in demand for a long, long time before the iPod, so Apple was just reinventing an existing format that already had an audience.

With movies, Apple doesn't have killer hardware that is best-of-breed in it's niche and there is no huge demand for movie portability (if any at all, outside of the geek world).

With movies, there is no equivalent of buying a portion of the product for a fraction of the cost in order to get only the parts you want. I can't think of any movie where I would say, "Gee, I love chapter 8-9, I'll just grab those off of iTunes." You want the whole thing or you don't.

At a hefty $10-$14, if I want the whole thing I will buy it at the store and walk away with a physical product, higher resolution and better sound.

The music analogy doesn't work - because iTunes offers many interesting and useful alternatives to buying a physical CD. Their movie offerings are plain, pale in comparison to the features of a DVD, and are of no benefit to the consumer.

Hence the need for rental, and the appeal of HD if they can get away with it. Rental would probably be enough in and of itself to make this a huge hit for Apple. Why?

1.) Renting movies is a convenience that has been in place for a long time.
2.) You can get a movie without having to leave your house or waiting two days for it to come in the mail. Potentially, Apple could offer a huge selection of films that your local store wouldn't carry.
3.) You aren't paying to own, so you don't care if the movie sucks - you might not even care if it is a bit low-res.

-thad

 

[thadgarrison]

Doesn't sound very different than BluRay or HD-DVD, you need to buy an expensive piece of hardware and end up buying $25 media that is encoded with lots of DRM and other restrictions.

I used to do the same with DVDs buy and then resell, but the bottom has dropped out from the SD DVD market. In many cases you can buy formerly popular movies used for $1-$2+s/h on Amazon Marketplace.

B

Of course, with Blu-Ray and HD-DVD you are getting a physical product, special features like on DVDs and a much, much higher resolution picture.

But, the price of hardware and the confusion in formats have already doomed Blu-Ray and HD-DVD. On the other hand, HD movie downloads are ripe for the picking. Apple?

 

[thadgarrison]

*yawn* yeah, yeah you know more than a multi billion dollar company. Don't we all.

I, myself, predicted the downfall of paying $2 a TV episode and $.99 a song. I was wrong. Quite wrong.

The movies and the iTV will sell like hotcakes. I doubt I'll buy either though.

There is a world of difference between the demand for single song and single TV episode downloads and purchasing an entire movie. With songs and TV shows downloading a part of the whole is sensible and priced inside of the impulse-buy market. At $10-$14 - downloading a movie is expensive and offers no benefit over renting or buying a DVD, in fact it has several drawbacks.

iTV will sell like hotcakes if Apple makes it appealing. Remember, Apple hasn't always had hits like the iPod, they've had plenty of flops (even within the rabid Mac community).

-thad