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http://itp.nyu.edu/~tjo230/itv/platform.pdf

For my project, I have chosen to examine Apple's ecosystem of downloadable media, including the famed iPod, the new (considerably less successful) Apple TV, and iTunes software. First, I will walk through Apple's consumer offerings and explain the different platforms and available content. Then, I will analyze these findings and make predictions about the future of Apple in the video market.

APPLE'S MUSIC SUCCESS - After arriving on the market in 2001, within a few years the iPod was an undeniable success - the word 'iPod' has more or less become synonymous with 'MP3 player.' Shortly after, Apple released iTunes software compatible with both Macs and PCs, which (along with the built-in iTunes store) provides an easy interface for users to purchase music (99 songs each) and play the songs either on their computer or sync to their iPod. The ease of use factor in this process established iPod+iTunes as a major leader in the music market.

APPLE TAKES ON VIDEO - On September 12, 2005, Apple made the leap into the video market with the 5th generation iPod - the first with video capabilities. The current iPod models were released in September of this year. The original iPod - now referred to as the 'iPod Classic' - offers more harddrive space than ever (models come in 80 or 160 GB - 100 or 200 hours of video - and feature a 2.5 inch color display with 7 hours of battery life). Moreover, the new nano (available in 4 and 8 GB models) now offers video capabilities on its tiny 2-inch color display. Then, finally, we have the iPhone, released on June 29 of this year and featuring an 8GB flash drive, a 3.5 inch color display, and 7 hours of battery life. One of the home 'icons' is YOUTUBE, and offers an easy, user-friendly way of watching YouTube videos online. The fourth addition to the iPod family (iPod Touch, available in 8 and 16 GB models) shares a look similar to the iPhone. Both devices offer WiFi internet access and allow users to download music directly from the iTunes store. It is a safe bet to assume that video offerings will be coming soon.

PURCHASING VIDEO THROUGH THE ITUNES STORE - Video for iPod devices (and the iPhone) can be downloaded through the iTunes store. TV shows are available for $1.99 and movies for $9.99 each ($14.99 for new releases). All videos, of course, include FairPlay DRM and are unable to be viewed through viewers other than iPod and iTunes without a fair amount of work.

APPLE TV - The last member of the iPod+iTunes video ecosystem that deserves mention (despite its somewhat lackluster performance in sales) is Apple TV. The Apple TV was announced on September 12, 2006 - the same day movies became available on iTunes. Of the Apple TV (codenamed iTV at the time), Steve Jobs introduced it: "Pretty much whatever kind of setup you've got, iTV fits in. Now, you can get great content online. It's playing now on a computer near you. You can play it on an iPod near you and it is coming to a TV near you." Apple TV can be used in two ways: Users may sync their Apple TVs with iTunes, wirelessly from any Mac or PC in the house, and store the content on Apple TV's 160 GB hard drive. Alternatively, they can stream content directly on Apple TV from up to five computers, and five TVs can link to the same iTunes library. Content can include TV shows, movies, music, YouTube shorts, podcasts, and photos. Supported video file formats include H.264 video codec and MPEG-4.

ANALYSIS

In her presentation to our class, Dina Kaplan (of Blip TV) separated online video content into three categories: 1. Viral 2. Friends + Family 3. TV Shows/Movies

I will use Kaplan's model to analyze Apple's offerings in each of these areas.

1. Apple TV, iPhone and the iPod touch offer direct streaming from YouTube. Users can quickly and easily (through the friendly interface) fetch YouTube "snacks" on any of these devices.

2. The beauty of Apple TV - and all of Apple's products, frankly - involves the integration aspects. Not only can TV shows, movies, and YouTube snacks be delivered on iPhones, iPods, and AppleTV; users may also use iMovie to export movies in formats specific to each of these devices.

3. For users that wish to watch a TV show or movie "on the go" (on a train, subway, car ride, etc.), the iPods and iPhone offer great solutions. Transferring videos from iTunes to the iPod is simple through Apple's easy interface. For users that wish to watch a TV show or movie at home on their television, Apple TV offers a great solution - transferring videos from iTunes to Apple TV is also fairly simple. Indeed, overall it seems the next major shift in media will be the integration of and crossover between internet TV and regular TV - Apple has the right idea. The problem here has to do with the lack of content available through the iTunes Store. A quick tour through the iTunes Store reveals the lack of content. Indeed, the top movies right now are "The Invisible," "Wild Hogs," "Crash," and "The Princess Bride" - hardly mainstream popular movies. The only major source of movie content is Disney - a company on which Apple CEO Steve Jobs sits on the board.

Conversely, the music store offers a much more extensive set of offerings. But even aside from that, one article (sited below) insightfully points out that the music revolution (the shift from CDs to MP3 players) was largely fueled by the instant popularity of Napster; it was easy to put pirated music on to the iPod. Conversely, pirated video (from BitTorrent, from example) often comes in AVI files which are incompatible with Apple TV. For content, without an extensive conversion process, users must obtain their content through the iTunes Store.

Most recently (on August 31 of this year), NBC Universal - the #1 provider of content on iTunes - announced it would not be continuing its content with iTunes, which could prove incredibly problematic for Apple's role in the video revolution.

Yahoo! blogger Ben Patterson insightfully identifies five ways Apple could save Apple TV: 1. Bring iTunes Store to Apple TV 2. HD movies + TV shows 3. Make a deal with NBC 4. Movie rentals 5. DRM-free videos

Apple beautifully positioned itself, through iTunes + iPod, to become the leader of digital music. Now, it dominates 76% of online digital music sales and is the third biggest seller of music behind Wal-Mart and Best Buy. However, with a lack of extensive content, it seems Apple will miss its opportunity to do the same with video unless some changes are made.

SOURCES http://www.apple.com http://www.theregister.co.uk/2007/06/20/youtube_iphone_appletv/ http://www.wired.com/gadgets/mac/commentary/cultofmac/2007/10/cultofmac_1017 http://www.nytimes.com/2007/08/31/technology/31NBC.html?ei=5088&en=dec07117d54e611a&ex=1346212800&adxnnl=1&partner=rssnyt&emc=rss&adxnnlx=1192993228-bzpk5yfilj2xingZtRAw4g http://www.tuaw.com/2007/09/26/new-nbc-shows-are-in-itunes-store/ http://tech.yahoo.com/blogs/patterson/7006/five-ways-to-save-apple-tv