Digital Distribution v. Digital Consumption

So the world is coming to grips with digital distribution - it’s easier for companies than distributing physical products, like cd’s, dvd’s or books and for many people it’s getting easier also. Broadband penetration in the States is low compared to other places, but there’s still a hell of a lot of people that have access to good bandwidth.

Companies are grappling with the best way to put their digital wares in front of people. Apple got the ball rolling with the iTunes music store and is arguably the only significantly successful vendor of digital goods. Amazon is getting in to the mix - they are really great as a general store, making purchases easy and getting people to buy more than they otherwise might not have. They screwed the pooch with UnBox, although they’re still hoping with that one, what with the TiVo integration. Their MP3 store is worthy - I’ve already used it when I otherwise might have bought off the iTMS. And their eBooks store, while still in it’s infancy is looking like a strong contender.

As good as the distribution and the sales experience may be, nothing is going to take off until people can consume that content where and how they want it. Before the iPod the MP3 player industry was moribund, nobody could figure out how to do it. Apple came along and they made a sexy device that was dead simple to use and to sync with your computer. It was not a task anymore to get your music from your computer onto the player - it just worked, iTunes made it easy for anyone with no computer skillz to rip their cds or buy new music and have it magically show up on the player. An industry was born.

Another industry that I believe is just being started is ePublishing, Jobs annoying quote that people don’t read anymore, notwithstanding. Amazon has the distribution part down already - there’s a lot of content and more seemingly every day. The key thing they’ve done is tied everything together with the Kindle. It may not be the prettiest package, but it’s an ok one and one that I suspect will see significant improvement in the second generation.

People don’t want to read long form content on their computers nor do (most people) want to read it on a tiny phone (even iPhone) screen. They want to read it on something that’s about the size of a book - not too narrow and not too wide - something juuust right. The resolution should be good and it should be easy on the eyes for long periods of staring - that means a passive screen to me. Amazon’s taken care of the distribution making it super, super simple and super easy to buy your book and start reading immediately. Downloading free preview chapters? That’s genius - it will take the guesswork out of whether or not you want to read a book - and combined with instant gratification, you get to the end of that first free chapter and one click later you’ve bought and downloaded the book and are moving on without missing a beat. Its sold out status since it was first offered, continuing dominance of the Amazon bestseller list, rave reviews from actual owners and brisk trade on Ebay all point to a pent up demand for this industry.

The next one to go? Video. Right now there is no industry - Apple and everyone are trying to figure it out. The problem? There’s been no dead simple way to get this content onto your TV. Face it, that’s where people want to watch stuff - not on their computer and not on their iPhone, you get a movie and you want to watch it on your big ol’ tv sitting on your big ol comfy couch. TiVo and Amazon are trying to get into this mix, but TiVo isn’t a mass consumer product, it’s too niche. Apple TV 2, on the other hand, I think is the beginning. Here’s a little device that’s cheap and easy to install. It will sync with your existing computer’s library of music and video (over iTunes) but doesn’t require a computer.

Apple’s forged deals with all the major movie houses to get new movies - 30 days after DVD release (for now) and promise 1,000 movies by the end of february. So renting movies is going to be as easy as video on demand with a much larger library. You can rent in HD or not depending on your mood and the library will only grow. I think that Apple just made the video market and is beginning its dominance of that market - iPod style. It won’t grow as quickly as the digital music market did, but it’s coming. I think that long term the Apple TV announcement was the killer portion of this Macworld.

Digital media isn’t just about software and bandwidth - it’s hardware, too. Few companies are getting that - they need to let people consume those bits how and where they want it. Hopefully, we’ll see some more vibrant competition on that front as these markets are born and mature.

Jan 18th, 2008 · Comments RSS · · · · · Tags: amazon · apple