Apple, NBC and Video
CNET’s got the scoop on the latest Forrester report that says that Apple lost the battle with NBC and should back down and do whatever it can to get NBC back on iTunes. Unfortunately I don’t really want to shell out the $279 to get the report, so I’ll just go by what CNET says and what they say in the executive summary on that report.
The gist of it is that NBC’s content was 30% (or maybe 40%) of the iTMS’s video sales and Apple is thus the loser in this battle. NBC won’t suffer because they’re going to be giving away their content for free so people won’t be mad at them for pulling their content off the iTMS. All of which is obviously true - it’s clearly a blow to Apple’s video share to lose them. It seems to me though that they miss the point. There is no online video market, 30% of nothing is not causing anyone any pain. The battle is to make the market and that’s where Apple needs to make the stand, worrying about market share for no reason isn’t the answer.
The reason the iPod made the MP3 market was because there was pent up demand to have a device that could carry around all your music conveniently with an easy to use interface and management system. Right now, iTunes is probably a decent management system for videos just like it is for music but there is no satisfying solution for watching those videos. Watching it on an iPod or iPhone is ok, but it isn’t really a gigantic draw for most people. Watching it on the computer is fairly unsatisfying as a mainstream experience, people are buying their flat screen tv’s and dammit they should be able to watch them there. Right now that’s not a great process - certainly it is not the super dead simple process that setting up an iPod is.
That’s the real battle. They need to beef up Apple TV (and front row as an extension of that, I’d guess) to make it ridiculously easy to get all this content on your TV. Much easier and better than it is now. That probably means it needs to add in DVR (and cable cards) and accept more video formats so it’s easy to get your own content on there. Or something, I don’t know what they need but a real market needs to exist before it makes sense to start quibbling about a few downloads here and there.
What Apple needs to do is ignore NBC and focus on making the device that everyone didn’t even know they needed. Giving NBC the freedom to raise video prices isn’t going to help anyone. If Apple can make the device that is the gateway to digital video (as the iPod was to digital music) then just like with music, NBC will have no choice but to play ball. While I’m not saying that Apple is the only company capable of making such a thing happen, Apple’s motivations are much more aligned with the customers than the TV/Movie industries.
A lot more work needs to go into this - not least because broadband penetration in the states is so crappy. Downloading video good enough to watch on TV is a much bigger deal than downloading a few megs worth of MP3’s. Giving up the power now at the beginning seems like a bad idea to me, Apple doesn’t need the money so what does it gain by caving to NBC?
