iTunes video sales double as Apple preps new content partners

Posted:
in iPod + iTunes + AppleTV edited January 2014
Despite the lack of a large video library, Apple's iTunes video sales have more than doubled since the company announced its 1 millionth video sale, according to one analyst.



The iPod maker is also reportedly planning a major update to its video services, including the addition of several new content partners, for a high-profile launch that could come as early as January.



In a research note released to clients earlier this morning, American Technology Research analyst Shaw Wu said his proprietary checks with industry sources indicate that iTunes video sales from music videos, ABCTV shows and Pixar short films continue to come in ahead of expectations.



"Apple disclosed that it sold 1 million videos on October 31, 2005," said Wu. "We are picking up indications that sales have more than doubled since then and that this strength is attracting attention from other content providers including NBC, CBS, and Fox eager to participate in this new market opportunity."



The analyst said he would not be surprised to see Apple announce new content partners over the next few quarters, perhaps as early as Steve Jobs' keynote at Macworld Expo during the second week of January.



In recent weeks, independent sources have begun to spread rumors that Apple is gearing up to add a slew of new video content to its service early next year. Rumors that Apple is working on a broadband video service have also been re-ignited and appear to coincide with similar reports that surfaced following Apple's hiring of Julia Miller in March.



Miller came to Apple from Microsoft, where she was responsible for the worldwide marketing and sales programs for Xbox Live, the world's first subscription-based broadband-only online gaming service. After coming to Apple, sources say Miller's position included the exploration of a video subscription service, either for a portable video player or a settop device.



"While it is still early, we believe Apple is in a decent position to build as strong of a position in digital video infrastructure as it has in MP3 players," Wu said. "Like music, we do not believe Apple will compete for profit in content as a reseller/marketer, instead giving the majority of the profit back to the content providers."



Instead, the analyst believes signing up more content partners will help the company drive more growth from its easy-to-use and tightly integrated hardware and software systems.
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Comments

  • Reply 1 of 66
    melgrossmelgross Posts: 33,510member
    Yup, this goes back to what we were saying in the previous article.



    I'm always talking this point to those on Ars who think that Apple is a loser in the video content wars.
  • Reply 2 of 66
    I've only bought one video to see what it was like. I'm hoping they start offering a larger resolution.



    Edit: Of course I only have 1 or 2 gigs left on my iBook half of my drive (30Gig) is iTunes. Apple's digital lifestyle is demanding bigger drives! arrgh
  • Reply 3 of 66
    screedscreed Posts: 1,077member
    No worries there. Apparently, according to the ThinkSecret article, the content providers insist that their content never touch the users' hard drives. \



    Nice if you have >=5 Mbps broadband.



    The rest of the planet however...
  • Reply 4 of 66
    melgrossmelgross Posts: 33,510member
    Quote:

    Originally posted by sCreeD

    No worries there. Apparently, according to the ThinkSecret article, the content providers insist that their content never touch the users' hard drives. \



    Nice if you have >=5 Mbps broadband.



    The rest of the planet however...




    And that's why I think that Apple's way of doing things will do much better than the other services that are coming on line now.



    Those are not much better than pay for view DVR's.
  • Reply 5 of 66
    I've really been enjoying the iTunes videos. With class from 6:00-9:20 on Wednesday nights, its the only way I get to watch Lost.
  • Reply 6 of 66
    Quote:

    Originally posted by melgross

    And that's why I think that Apple's way of doing things will do much better than the other services that are coming on line now.



    Those are not much better than pay for view DVR's.




    Ok, I'm confused now, the content has to "touch" the hard drive. Or else it won't work on the iPod.
  • Reply 7 of 66
    solsunsolsun Posts: 763member
    I think this article today from Think Secret explains how Apple will own the living room. It also appears they've solved DRM/piracy issues as well.





    Road to Expo: Apple's new media experience coming soon

    By Ryan Katz, Senior Editor



    December 2, 2005 - Apple is planning to unveil a robust new content distribution system in January at Macworld Expo alongside its revamped media-savvy Mac mini, Think Secret has learned. The new content system and related media deals, which will include feature-length content, expanded televisions offerings, and more, will further cement Apple's increasing lead in digital media delivery.







    In an effort to appease media companies wary of the security of digital rights management technology, Apple's new technology will deliver content such that it never actually resides on the user's hard drive. Content purchased will be automatically made available on a user's iDisk, which Front Row 2.0 will tap into. When the user wishes to play the content, robust caching technology Apple previously received a patent for will serve it to the users computer as fast as their Internet connection can handle. The system will also likely support downloading the video content to supported iPods but at no time will it ever actually be stored on a computer's hard drive.



    This method, which will be every bit as simple and straightforward for consumers as the iTunes Music Store is now, poses a number of advantages over Apple's current pay-once-download-once system, including saving users' hard drive space and essentially providing a secure back-up of everything purchased. iTunes Music Store customers at present are charged 99 cents every time they download a song, regardless of whether they already bought it, and must back-up purchases themselves. A customer who experiences data loss and loses purchased songs is effectively out of luck as far as Apple is concerned.



    Some questions remain about the particulars of the system that sources have been unable to clarify, including how customers without a .Mac account will be handled and how Apple will market the system to laptop-toting road warriors. It also remains to be seen whether the iDisk tie-in will only apply to some content. Apple's current video offerings are downloaded directly to a computer's hard drive, for example. Additionally, it's unknown whether the content system will be marketed as a Mac mini-only feature, which is unlikely but possible if it is dependent upon technologies in that system, or whether it will be available to Mac and Windows users as a whole.



    Alongside this announcement Apple will also be rolling out a number of new partnerships with various content providers. Those Apple has not signed at the time of launch, one source speculated, will likely want to jump on the bandwagon soon afterwards, not unlike the vast number of additional record labels that were added to the iTunes Music Store soon after its inception.



    Once source explained that when Apple rolled out its video-capable iPod in October, limited content?five TV shows, a few shorts, and music videos?was seen by executives as an acceptable amount to offer customers and watchers alike a glimpse of what was to come. WIth the roll-out of the new Mac mini, which sources continue to maintain will be bigger than anyone can imagine, Apple will blow the doors off legal video content delivery.



    Many analysts agree both on the need for a service and Apple's ability to deliver one.



    "I think there is clearly a need for someone to facilitate the digital distribution of content. When I'm looking at the TV and home entertainment sector it's very clear that all of this content is available illegally and too easily," Richard Greenfield, an independent media analyst told Think Secret. "There needs to be legal high quality ways to access content online, especially as your making more and more methods of transporting content around."



    Greenfield added that with residential bandwidth speeds approaching if not exceeding 5-10Mbps in an increasing number of areas, online, on-demand video content will make more and more sense for consumers.



    "The content creators need to give people legal, high-quality alternatives, or they are simply going to turn to piracy. This sounds like, on the surface, a viable answer to this issue for all concerned," he said.



    Concerning the reborn Mac mini and Apple's media ambitions, Nitin Gupta, a technology consultant with the Yankee Group stressed the importance of widespread content.



    "Initially, I'm concerned about the content and how much content Apple will be able to get," Gupta said. "How the rights work around digital distribution will play a big role. What content can Apple get that others don't already have exclusive use rights to movie channels for three, four, up to eight years?



    "What will be the draw is access to great content they can't get elsewhere. Yes, this needs to includes movies and a lot more television shows, but it needs to include exclusive content. If it doesn't and it includes niche programming, like independent films, it's going to have limited appeal."



    Analysts have heard rumblings that Apple is close to striking deals with NBC, CBS, and Paramount Pictures.



    "It jives to a certain extent with what I'm expecting Apple to be able to do when Intel-based Macs arrive," said Rob Chira, computer hardware analyst at Fulcrum Global Partners. "I've always thought this Intel/Apple relationship was going to be much more than just chips in PCs. I think they're playing off of each others strengths and I wouldn't be surprised to see at least some part of this home entertainment/video content distribution model include some other technologies from Intel's Viiv project."



    Viiv is the name of media center technologies Intel is developing ahead of the release of Microsoft Windows Vista, the major Windows upgrade formerly known as Longhorn and slated for delivery next year. Viiv PCs will include hardware specifically designed to optimize media management and playback, and will all ship with a special remote control from Intel along with the Media Center Edition of Windows Vista.



    "I'm sure Apple doesn't want to do another version of the Windows Media Center PC," Chira said. "They want to one-up it, or ten-up it, as the case may be."
  • Reply 8 of 66
    melgrossmelgross Posts: 33,510member
    Quote:

    Originally posted by DeaPeaJay

    Ok, I'm confused now, the content has to "touch" the hard drive. Or else it won't work on the iPod.



    What he meant by "touch" was that it can't be put onto your HD, only reside in the DVR.



    If you can't put it onto your HD, then you can't scale and format it to work on your iPod. Quicktime Pro, and other programs allow you to "output to iPod", but only if the file is in the computer.
  • Reply 9 of 66
    screedscreed Posts: 1,077member
    With current videos, it's resides on your Mac and gets synced with your iPod.



    The alternative would be if you want to load a video to your iPod it would have to be downloaded from Apple headquarters (or a caching server elsewhere) every time. Again, doable if you have the bandwidth.



    But that's a 320x240 video. If Apple's TiVo-killer is true then we're talking about HD quality (and size) content.



    ...but then the streaming function of Quicktime is fairly good...

    ...and yet that would be a marked departure of Apple's push for customers to own their music.
  • Reply 10 of 66
    hmurchisonhmurchison Posts: 12,419member
    What's Apple offering that I won't have the ability to get on VoD?
  • Reply 11 of 66
    melgrossmelgross Posts: 33,510member
    Quote:

    Originally posted by solsun



    In an effort to appease media companies wary of the security of digital rights management technology, Apple's new technology will deliver content such that it never actually resides on the user's hard drive. Content purchased will be automatically made available on a user's iDisk, which Front Row 2.0 will tap into. When the user wishes to play the content, robust caching technology Apple previously received a patent for will serve it to the users computer as fast as their Internet connection can handle. The system will also likely support downloading the video content to supported iPods but at no time will it ever actually be stored on a computer's hard drive.



    This method, which will be every bit as simple and straightforward for consumers as the iTunes Music Store is now, poses a number of advantages over Apple's current pay-once-download-once system, including saving users' hard drive space and essentially providing a secure back-up of everything purchased. iTunes Music Store customers at present are charged 99 cents every time they download a song, regardless of whether they already bought it, and must back-up purchases themselves. A customer who experiences data loss and loses purchased songs is effectively out of luck as far as Apple is concerned.



    Some questions remain about the particulars of the system that sources have been unable to clarify, including how customers without a .Mac account will be handled and how Apple will market the system to laptop-toting road warriors. It also remains to be seen whether the iDisk tie-in will only apply to some content. Apple's current video offerings are downloaded directly to a computer's hard drive, for example. Additionally, it's unknown whether the content system will be marketed as a Mac mini-only feature, which is unlikely but possible if it is dependent upon technologies in that system, or whether it will be available to Mac and Windows users as a whole.



    I think that this idea has too many problems for it to be viable right now.



    If this content is going onto the iPod, it's still a seperate file, the way it is now.



    This doesn't sound Apple-like at all.
  • Reply 12 of 66
    cosmonutcosmonut Posts: 4,872member
    Hmm. If I pay for something like music or videos, I want access to them even when I'm not connected to the net or my iDisk.
  • Reply 13 of 66
    I'm guessing what might actually happen is that it WILL reside on your hard drive, but not exactly. The way the iDisk works in Tiger is that is has an encrypted local copy, to speed up syncing. They will probably make it so those Video/Music folders cannot be edited in ANY way. This would make the most sense to me. Streaming high-bandwidth video/music everytime you want to watch or listen, makes no sense...too expensive in bandwidth and unuser friendly (anti-apple). It will probably act similar to subscription based services from Napster etc. except that you don't have to pay monthly fees, you just have to sync your ipod once a month or your videos will become unwatchable...iTunes music DRM will most likely not change, other than having the ability to download your songs anytime you want from your iDisk...that would be nice. They need to add more value to the iDisk, right now it sux, unless you use every feature.
  • Reply 14 of 66
    rokrok Posts: 3,519member
    Quote:

    Originally posted by CosmoNut

    Hmm. If I pay for something like music or videos, I want access to them even when I'm not connected to the net or my iDisk.



    exactly. if you have to have access to your iDisk storage, and the storage requires a .mac membership fee every year, then we're talking about double-dipping costs (charge for the membership, then charge again for the media, and, in the end, you never actually have it in your hands). but this just does not sound like something steve would think would fly. i mean, you don't have to have a .mac membership to purchase off the itunes music store, just an apple subscribed ID. and if they really are selling the paltry amount of video content hand-over-fist ALREADY, why tinker with something that works? who knows, though? this may be the only way the other major companies would come on board, but i guess we'll just have to wait and see.



    i would at LEAST like the ability to archive directly to a dvd through idvd or something if i want, though, and have the disk space and bandwidth to spare.



    *just as an aside, do you think there will ever be another ceo crazy enough to turn down potentially enormous amounts of money to go with his/her vision like steve does? i mean, the 90's were littered with apple ceo's that steered the ship based solely upon flavor-of-the-day ideas, and never having that "vision thing" and the cojones to stick with said-vision, despite everyone saying not to. that's not to say steve's always right (e.g. missing the boat on seeing the importance of recordable CD's, the cube's form over function and price, etc.), but he's done way more things right that, at the outset, we all thought he was stark raving mad. anyway, i'm just sayin'...
  • Reply 15 of 66
    Quote:

    Originally posted by rok

    exactly. if you have to have access to your iDisk storage, and the storage requires a .mac membership fee every year, then we're talking about double-dipping costs (charge for the membership, then charge again for the media, and, in the end, you never actually have it in your hands).



    Yeah...if true it is a subscription service. Nothing less. Which is all well and fine. Maybe that works out better.



    We still have much to learn. Like, well, you know, whether this is even true.



  • Reply 16 of 66
    solsunsolsun Posts: 763member
    No I don't think the file will ever reside on the hard drive at all...



    "...Content purchased will be automatically made available on a user's iDisk, which Front Row 2.0 will tap into. When the user wishes to play the content, robust caching technology Apple previously received a patent for will serve it to the users computer as fast as their Internet connection can handle. The system will also likely support downloading the video content to supported iPods but at no time will it ever actually be stored on a computer's hard drive."





    Sounds to me like a new faster caching system? As far as backing up the media to DVD, well, I don't think so... As it is right now, video purchased from iTunes can't be burned to DVD so nothing is changing in that regard.. Of course there are always ways around DRM, but this sounds like a pretty viable solution. You can put it on your iPod or watch it anythime you want via FrontRow, but you will never get the physical file in a way which it can be copied...



    How is it different than Video on demand? Well, if Jobs can eventually bring all the major studios on board this could begin competing with Blockbuster and Hollywood Video. Who is gonna want to go drive and rent a movie when you can get any movie old or new instantly streamed to any tv in your house. Better yet, you can take it with you on your iPod!
  • Reply 17 of 66
    Quote:

    Originally posted by solsun

    As it is right now, video purchased from iTunes can't be backed up



    Say again?



    I know you cannot burn to DVD (as a DVD...video)...but it seems to me that "bits are bits"...and backing up should work.



    Am I wrong on this?
  • Reply 18 of 66
    a_greera_greer Posts: 4,594member
    Call me when:

    A: the quality doesnt stink

    B: I can copy the shows to VCD or multiple shows to DVD or SVCD for archival and playback on (gasp) non-apple hardware/software
  • Reply 19 of 66
    Quote:

    Originally posted by Chris Cuilla

    Say again?



    I know you cannot burn to DVD (as a DVD...video)...but it seems to me that "bits are bits"...and backing up should work.



    Am I wrong on this?




    pretty sure I just fomatted my HD the other nigth after backing up my entire iTunes library to DVDs...they seem to be working just fine...
  • Reply 20 of 66
    solsunsolsun Posts: 763member
    Quote:

    Originally posted by Chris Cuilla

    Say again?



    I know you cannot burn to DVD (as a DVD...video)...but it seems to me that "bits are bits"...and backing up should work.



    Am I wrong on this?




    you posted before while I was editing my post. I meant can't be burned!
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