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Digital Media Advisor March 2006 |
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“The Video iPod Revolution” Will the Video iPod be the next
consumer device to take on TV? iTunes 4 million Video iPods flew out of stores at Christmas time and thus started the great race for content exploitation on iTunes. At the beginning of December 2005 Apple had sold 3 million video downloads reaching 8 million downloads by January 2006. There is no debate that Apple has done a great job of meeting the demands of consumer’s appetite for purchasing content and viewing it on their new Video iPod devices. With only 50 titles available on the iTunes site, can content owners provide enough content to meet the growing sales of video iPods? Plutus Enterprises estimates that by 2009 annual sales of Video iPods will reach 150 million units globally. By 2009 iTunes will serve up over 480 Million video downloads annually generating $955 Million revenue for the Apple distribution platform. This level of digital video distribution will net content owners $667 million in 2009.
Apple
will need to expand the volume of content provided on iTunes, and with
competition looming from the likes of Google, Amazon, AOL and Yahoo, content
owners will be heavily enticed to promote and exploit their content in the
new Digital Video formats. But what
do content owners have to go through to get their content on iTunes? The iTunes concept sounds simple, but it
is not as easy as encoding your digital assets and throwing it up onto the
iTunes website and collecting a fee for the download. Getting Content on iTunes Currently Apple is only working with the Major studios in delivering content to consumers. If you are an independent or a small distributor, you will have to wait until the platform expands to include content from not only the majors, but small and medium size distributors. But before rushing to get your content on iTunes, you must understand the “Gotchas” to Digital Video Distribution. These “Gotchas” are explained in detail and are available at the Plutus website:
With only 50 titles available for download it is easy
for consumers to sift through the library, but as the site expands, it will
become ever more important to properly promote and exploit titles so as they
are not lost in the shuffle. The
iTunes site does bring a tremendous amount of traffic and therefore is a
viable long-term player in the emerging Digital Video Market. At 1.99, Apple has found the sweet spot to
which consumers are willing to pay for Digital Video content legally. But some people are balking at the
overall cost of content as seen with $54.99 price tag for Season 1 of the
Munster. Examining the customer
reviews on iTunes you will see that some people prefer purchasing the $39.99
DVD from Amazon opting to save $15.00 and get something they can watch on a
big screen. The question is are
consumers willing to spend so much to purchase their favorite content in all
viable digital formats? |
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Alienation of Existing
Channels
Emerging Competitors Seeing the impact of this explosive medium, new players
are emerging to compete with Apple.
These competitors include Google with the expectation that Amazon,
Yahoo, AOL and Microsoft will jump into the foray. Currently Google offers the same competitive content that
iTunes offers with similar pricing.
But unlike Apple, Google is reaching out to any content owner to upload
their content onto the Google Video site.
The catch is that only a handful of entities are able to charge a
price for their content. Google’s
pitch is that content owners can get exposure by uploading their content and
give it away for free. But as a new
entrant in the consumer market, has Google figured out the various issues
that arise from processing millions of orders, not to mention the customer
service issues that arise? For the But as new competitors enter the market, what will each player pitch as their Unique Value Proposition? For years Amazon has worked on providing superior customer service and buying experience matched by no other online retailer, Ebay has emerged as the company that can draw a mammoth amount of traffic to its marketplace, and Google provides the best search experience. What will each Digital Video Service Provider offer to succeed in this emerging market? Success will be established by providing superior experience, value, community building, and easy content search around the content, In future Digital Media Advisor publications, we will explore the
uncharted territory of Digital Distribution and impact of Participations and
Residuals if iPod downloads are considered to fall in the industry definition
of video. The $1
Billion Plus financial impact to the Studios. Coming soon! |
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About Plutus
Enterprises Plutus Enterprises is a leading provider of
consulting services to Global 1000 clients. Since its inception in 1991, the
company has successfully embodied its cornerstone philosophy of building
long-term client relationships through dutiful service and the delivery of
quantifiable results. By combining deep expertise in both business processes
and applied technology, Plutus consultants deliver high-value business
application solutions across a variety of industries. To find out more about
the company, please visit www.plutus.com.
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Contact Information Gerald Abrahamian |
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ÓPlutus
Enterprises - 2006 |
Los Angeles, CA |
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With
every download on iTunes, there is a possible loss in sales in the other
distribution formats, such as DVD’s.
most
part, Google has been a B-to-B player with limited transaction based
interaction with the end consumers in commerce.