The market bidded up Apple's stock today, hoping that Steve Jobs will perform magic, saying those anticipated words "we're launching the iTunes movie store" in his upcoming September 12 keynote. I remain unconvinced that the movie downloading business will become Apple's next cashcow. But I'm only one little InvestorGeek up against the entire market. So I searched for some similar sentiments (to make me feel better). I wasn't dissappointed by Mark Cuban, who shared similar concerns about the viability of such an operation on his blog, BlogMaverick.Why should anyone listen to Mark's rants? If you look at the man's track record, besides being a self-made billionaire, Mark has been on the forefront of many digital content distribution ventures. From his days at Broadcast.com, to his current involvement in HDNet. To this day, he keeps his pulse on the industry's evolution. And the smartest thing he does on his critiques is to approach it from a user's perspective.
Mark gives his best impression of Curly Washburn (from City Slickers) by telling us "the 1 thing" that the iTunes movie store cheerleaders are missing. It boils down to convenience. Movie downloading sucks up bandwidth and you can't conceivably download more than 1 movie at a time. You might have to tie up your PC and internet connection for a whole night to complete the download. I won't even mention the possible Net Neutrality implications. Oops, my internet connection went down! (You know what I mean!)
The Few Things That Mark Was Missing
Mark was being nice by generalizing "the one thing". I'll add my 2 cents to the mix. Music download is successful because of convenience. Admit it or not, most people already have a collection of digital music (legal or illegal) since the late 1990s that they wished could follow them everywhere. Whether you're working out, walking from destination to destination, or taking a road trip, digital music is more convenient than carrying a bunch of tapes or CDs and having to change them. Can you imagine doing those same activities but watching movies downloaded to your iPod? I don't believe your passengers on that roadtrip would think watching a movie on an iPod screen is a great idea. It's easier to install a DVD player and pop in a DVD.
Care to know my own user experience? I own a 60 gig video iPod, but I honestly dread watching videos on it! Video eats up the iPod's battery life, and the screens are apallingly small. I don't know anybody who watches videos regularly on their video iPod, do you? Granted that Apple promises to fix the power issue and increase the screensize on the next gen iPod (Will it be announced on September 12 too?). Yet, it all boils down to convenience. In our instant gratification culture, it's tolerable to wait a few minutes for an audio download, but can you patiently wait for that movie to finish?
Quality becomes another issue. To keep the file sizes down, there is significant compression for both audio and video downloads. However, audio quality is not as discernable as video. Ever tried watching a video made for iPod on a regular screen? or a big screen? There's a reason why people buy the biggest TV screens that they can find, while they're satisfied with a small Bose system for music, or a good pair of headphones for mobile listeners.
Apple Helping Out Microsoft?
There are many hurdles to overcome before movie downloads can be ingrained into popular culture. The PC must first find its niche in the living room. This validates Microsoft Vista's Media Center strategy. Will Microsoft's Zune fare any better? Set top box technologies have performed admirably but who wants companies like Tivo making a firmware update, potentially rendering their movies unwatchable? My old VCR can eat tapes, but at least its not dictated by the content vendor. Which leads to my next point about Digital Rights Management (DRM). Will the content providers co-operate or will it be RIAA 2.0 all over again?
This has been a very technical post, feels like those years studying Computer Science at Waterloo did not go to waste! I'll keep monitoring Apple's latest developments. Just because you build it, doesn't mean they will come. Ask all those failed Web 2.0 companies! September 12th will certainly be interesting. Let's hear from the Apple fanboys or anybody who feels that the movie downloading business can become successful. Why do you think so? Maybe I'm the one missing something!
Vince Chan is an InvestorGeek, and blogs about investment / financial media at Investorial.com.
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Reader Comments (Page 1 of 1)
9-05-2006 @ 10:43PM
jgreenwald said...
Your post assumes that Apple is planning to build its movie service for the iPod. I'm not so sure that's where this is headed.
Steve Jobs is no dummy. Whatever he has up his sleeve will probably surprise us all.
9-05-2006 @ 10:56PM
Vince Chan said...
Good point J!
Is Apple buildling its own set top box? I guess we'll have to wait till Sept 12th.
I don't own a Mac myself, but how would you see a iTunes movie store being used if it's not leveraging iPod?
Though it still doesn't answer the criticism about the commercial viability of movie downloading in general.
P.S. Steve often rolls up his sleeves during keynotes, nothing underneath there that I saw... kidding!
9-06-2006 @ 2:28AM
chris said...
I would be surprised if Apple announced a movie store yet! I think they would need to have found a technology that allows for the rapid download of data to do it.
When TV shows in iTunes were launched you could get the feeling that it was chosen over movies due to their smaller size. However it meant that Apple is in the video content market so it is easier to see the impact of what new technologies are. This means they SHOULD be better placed to move quickly into the sale of movies when the appropriate infrastructure or delivery technologies are available.
Macs have received poor press for many years about their speed. I doubt Apple would deliberately put themselves into a position where a paying customer can legitimately say it is "too slow". Apple understands the User Experience enough to know that even if technically justified, a long slow movie down load is not a good user experience!
Just my thoughts.
C.
9-06-2006 @ 1:11AM
Vince Chan said...
Sorry guys, I promise to go to bed after this.
Just found these links that might prove useful in our discussion!
From Gizmodo (unforunately not from our sister site Engadget): iTunes Movie store movie list revealed!
http://www.gizmodo.com/gadgets/home-entertainment/itunes-movie-store-movie-list-revealed-the-house-that-mickey-built-198526.php
Personally, I'm not impressed with the selection. See my question about content providers co-operating.
9-06-2006 @ 12:51PM
Gary E. Sattler said...
It's the next wave gang. Welcome it or be swept away.
Streaming video to a wireless "PC" hanging on your wall in 4' x 5' hi def is coming... and NO dish.
Just you try to stop it!
People will still want their discs, no doubt about that. The discs will have 16 movies on them and they'll slip into a slot on the side of you wall viewer and pump enough boundless quad stereo into your wireless bose sound system that you could blow your windows out... without distortion!
Remember Ray Bradbury? HE was writing about this stuff before Pacman ate his first Donkey Kong on a pong screen.
See ya at the movies!!!
...but only if I invite you over.
Gary E. Sattler
Oh yeah, you know those blackberries? Lose 'em guys...
...soon to be old tech.
9-06-2006 @ 7:53PM
Earl Phillips said...
If Apple developed a streaming device to send the movie to a big screen from a PC like airport express does with music to a sound system it might be a cool deal.
9-06-2006 @ 2:05PM
John Sweeny said...
I agree that for the most part mobile audio and mobile video are mutually exclusive concepts and cannot travel down the same basic paths of development. Ever shrinking mobile audio is ideal. Ever shrinking mobile video is not. Perhaps this will lead to the rebirth of video eyewear. The original video "glasses" failed because there was no real mobile content to go with them. Combine the shrinking form factor of digital storage with wearable video that projects a large HD image and voila.
9-06-2006 @ 11:21PM
Jacob Varghese said...
I actually wouldn't mind scheduling movies to be downloaded while i'm not using my computer - while i'm at work, or in the middle of the night. Who cares if it takes 6-8 hours to download if it doesn't interfere with your use.