Apple iTV to reap what Amazon, TiVo and Wal-mart sow

Adam Turner
Friday, 09 February 2007 05:06

Opinion and Analysis

The marriage of television and the internet has been consummated with a slew of new TV and movie download deals, but Apple's iTV is poised to ride on in reap the benefits.

As it did with the wildly successful iPod, Apple has sat back and let others create the market. Now Steve Jobs will walk out on stage Moses-style with an iTV under each arm and declare online video is now "easier than ever before". It won't matter if it's not the best solution on the market, it won't matter if it's infested with draconian DRM. Unless Jobs pulls out a gun and shots himself in the foot right there on stage, the iTV will sweep away the competition. Thanks to the video iPod, Apple who currently has three quarters of the US video download market.

This time around the existing players will put up a much stronger fight that the iPod's competition, but few will survive the Apple onslaught. Despite they media hype, video over the internet is not a Mums and Dads mainstream phenomenon yet. It's poised to happen, which is when Apple likes to make its move.

Content is king when it comes to any kind of entertainment system, which is why recent announcements from the likes of 
Amazon/TiVo, Wal-mart and BitTorrent focus on the number of movie houses and television networks they've signed up. You can bet Apple will announce some impressive content deals when the iTV launches, but the key is digital rights management. Apple can get away with it's iPod/iTunes closed shop because it dominates the market, but will this approach work with video? Will the iTV and iTunes have the same symbiotic relationship? Will Jobs bet the farm on the hope Apple can sweep away the competition and establish its video DRM as the de facto standard? It's a big risk but I think Apple's arrogant enough to do it.

Most iPod owners don't seem to care about not being able to play music from Windows-based music download stores because they can always rip their existing CD collection to compliment what they download from iTunes. iTV owners won't have this luxury - unless there are some dramatic revisions of copyright law in the next few months it will still be illegal in most countries to rip a DVD to you hard drive the way you do a CD. So for iTV users it could be iTunes or nothing, with Jobs betting on the fact iTunes offers enough to keep them happy.

Actually it's not quite iTunes or nothing. Just as the iPod plays DRM-free MP3s, you can bet the iTV will play DRM-free video files such as DivX. So if other online video stores offered their video files DRM-free - just as Jobs is calling on the music industry to do - then iTV owners will have an even bigger market to choose from. This isn't going to happen. Pirate DivX files downloaded from P2P applications are also DRM-free, but I couldn't see file-sharers jumping on the iTV band wagon or vice versa.

So lets look at the iTV/iTunes' competitors... CONTINUED