It's doomed, doomed, doomed!

by Oliver Breidenbach

Ha, that got your attention...

Cool stuff from Apple again. The movie thing bugs me a bit, though. It is quite expensive, don't you think?

Since you can't just burn a DVD, you need this iTV thing to watch the movies on your TV. So, compare the costs of watching movies in addition to your TV set:

DVD:
DVD-Player: $50
DVD: $15
Convenience Level: High (just pop in your DVD)

iTunes:
Mac (or PC): $1300
High Speed Internet: (enter your cost here)
AirPort Express: $129
iTV: $300
Movie: $15
Convenience Level: Medium (Wait for download, know how to set up stuff, keep backups, buy more harddisks to store additional movies...)

Even if you assume that you already have the infrastructure in place, it still is a substancially larger investment and a whole lot more "work".

Compare that to the economics of songs from the iTunes Store. If you have a PC, the album is $9.99 plus about $1 for a CD-R. Downloading songs is relatively quick even with medium bandwidth and burning to CD is a breeze. Once on CD, you can take it anywhere and you have a built-in backup. The cost/value proposition seems to be all right, even if you compare it to buying a physical product at Virgin.

If you store your movies on an iPod, it is about $3 per movie of storage. But if you loose your iPod or if it dies, you have no backup. So you need additional means of backing up.

I am sure that I can manage the technicalities of using the iTunes Store to get movies but I know more people who will be out of their depths.

So this can only be a first step targeted at early adopters. Movie companies will need to offer more to make downloads a long term success with happy customers.

Another thing to note: CoverFlow was actually aquired from a small developer, so Apple did the right thing this time. And it shows why Core Animation is such a big deal.

29 Comments

Simon Hibbs
2006-09-13 01:58:40
I think you're missing the convenience aspect of iTV. I may be wrong about this, but I think you can do everything from the iTV remote.


Sit down at the couch, select movie from iTunes using the remote, open pack of popcorn, start watching.


No need to go anywhere near your computer (as long as it's switched on). One-click purchasing. The film starts playing about a minute after you select it. It's basicaly XBox 360's Live Arcade for films.


Simon Hibbs

KenPen
2006-09-13 02:12:51
Oliver, you don't quite get it. To draw another analogy, Mac $1300, .Mac account $100, internet connection $15 vs. pencil $.10, paper $.01, envelope $.05, stamp $.39. By you own reasoning, email is never going to be a way to communicate when a cheaper and for the most part more convenient system exists. It's all about the way we want to consume entertainment. Every "iPod killer" that has failed has claimed that they were less expensive and more convenient (had more features.) Yet here we are with 70%+ market share (US). I think that Apple believes (and I agree) that iTV is the "tipping point" for the way we consume video in the way iPod revolutionized how we consume music. BTW, listening to music on an iPod is a terrible cost/value proposition compared with buying a CD, yet Apple and many others have built an economically healthy ecosystem around it.
Oliver Breidenbach
2006-09-13 03:00:00
Hey, cool, 2 comments already. I wanted to spark controversy and I got it.


Ken, more feature is not equal to more convenient. Come on, look at Microsoft Word.


Yes, iTV is convenient. But only if you don't care about keeping your movies. If you do, you need to provide about 3GB of storage and backup per movie in your movie collection. Add that to the $10-15 for the movie itself (minus DVD-Extras, want to bet that those will soon be on sale for an additional $5? and sub-dvd quality) and you pay a hefty premium for the "convenience" of not having to pop in a DVD.


Yes, it is a cool product and I want to have it. But it is not for the masses. Therefore, it will take some time for iTunes to become an equally relevant player in the movie space as it is in the music space. And I think the movie companies are still quite a bit off the target in regard to what consumers want.

Oliver Breidenbach
2006-09-13 03:02:07
BTW, listening to music on an iPod is a terrible cost/value proposition compared with buying a CD


My point is that it isn't. Music uses much less space to the effect that it does not place a heavy burden on your housekeeping skills. Plus you can burn it to CDs and put it on the shelf for easy storage and backup. And those CDs can be used without heavy equipment.

Christian Plessl
2006-09-13 04:43:59
While I agree with most of your post, it seems to me, that you have neglected one crucial point in your discussion. A main advantage of the iTunes store is that the songs or videos are immediately available after purchase. My main reason for using the iTMS is not that it is cheaper, but that I can get the music instantaneous. Otherwise I would have to go to a shop, or order the CD via a webshop. I consider this the prime advantage of an online music/video store.
Kyle Johnson
2006-09-13 04:45:11
Hmmm. I don't think you *need* both the iTV and the Airport Express. The language I've been seeing leads me to believe that the iTV will do music, photos, and movies. So the price comparison is a little off.


There is no doubt that if you own nothing you are better of buying a DVD player and DVDs. But if you already own a computer (which is Apple's target market), this is a fairly inexpensive way to get your stuff onto your TV with pretty good quality.


That said, I probably won't use it. If a DVD is a little more expensive (and often their cheaper), I'd rather get it because it will be full DVD quality, include extras, and allow me to rip it and play it on other devices.

Jeff Self
2006-09-13 06:29:09
How's this for convenience? You plug in your iTV. You pop your popcorn, sit down in the den to watch that movie you just downloaded from iTunes. Go through the iTV menu to find your movies. Oops. You logged out of your Mac. Now you need to run upstairs, log in to your Mac, open up iTunes, since streaming is done by Bonjour, instead of a real streaming server, and then run back downstairs and start the process all over. Now, your iTV can find your movies and start streaming it. Except that the sound quality is nowhere near as good as a DVD. And occasionally, it pauses, or even loses the connection, as I've noticed from my streaming experiences with iTunes now. And to top it off, your popcorn has gotten cold.


The fatal flaw in all this is Bonjour, in my opinion. I don't wan't to have to be always logged on to my system with iTunes or iPhoto always open in order to stream my content.


Does anyone know if iTV will work with QuickTime Streaming Server?

Jim
2006-09-13 07:32:03
"The economics of songs from the iTunes store..." is a function of what Apple is paying for the music.


By the same method, the economics of movies, etc., from the iTunes store are a function of what Apple is paying for them.


So, you can't necessarily blame Apple for what things cost.

Arun R
2006-09-13 07:54:43
How dumber can your analysis go? Have you ever filed for bankrupcy? The box that has been announced is not for the grandma who has never had a mac or pc or a DVD player at home. It is for those who already have either a mac or a pc. If you never had any of those 3 things just go buy a DVD player. Any bestbuy sales man will lose sales to tell you that. So the cost is only US$299. Nothing more. Obviously you are not a geek. Geeks do not mind doing more work to get something to work. You are just another couch potato with petty time on hand to write this article. Am I right? Man... I cannot believe your home economics is so bad.
LJ Gould
2006-09-13 08:01:45
Let's face it, hard-drives are big, and even though iTunes doesn't support it (yet), it's not that hard to bypass CSS and copy a DVD to your Mac and compress it via h.264. You'll have other options than just the movies that you've bought from iTunes.


If Apple can get permission to allow DRM'd copies of DVDs to be ripped in iTunes (big if!) they'll have an amazing hit on their hands, if they don't there'll be a 3rd party product to do it anyway.


So now your 30 or 40 movies are available at the push of the button, instead of on these silly discs that are easy to lose and have to be found and inserted. The quality will be lower than a dvd, but who cares? While many people like the bragging rights of having a great TV, many more still have older models, and my guess is that most people (~80%) won't notice or care enough to mind.


Oliver Breidenbach
2006-09-13 08:01:50
"The economics of songs from the iTunes store..." is a function of what Apple is paying for the music.


You might want to check up on the meaning of the word "economics".

Oliver Breidenbach
2006-09-13 08:03:42
You are just another couch potato with petty time on hand to write this article. Am I right?


No.

Parity
2006-09-13 08:13:54
Well, I certainly think, for movies, that DVDs offer a much better value. DVDs are not expensive, they have better picture quality, extras, perhaps a DTS track, and are easier to watch on a TV. So, I don't get movie downloads either, unless they were much less expensive than the $10-15 Apple is asking.


iTV, however, interests me in that I've been trying to hook up Macs to my TV for a while. And this seems like a nifty way to use a TV in my living room to get photos/music/etc from my iMac. I could care less that it doesn't record, that's what the various leased DVR boxes are for anyway. And, while I think iTunes movies are silly, 640x480 TV episodes for $2 a pop - that's pretty good. Especially when you only want a particular episode or two.


I with the iTV was less than $300, but it sounds like a product that intrigues me. Better than having yet another Mac next to the TV to do the similar things. I'm not sure there is any much cheaper way even to use a TV (without DVI) as a monitor for a Mac.

Oliver Breidenbach
2006-09-13 08:17:00
I wonder how many of you people have actually bought a movie on iTunes yet?


I have. It is an altogether not unpleasant experience. The quality seems all right, no nasty copyright warnings that can not be fast-forwarded. Reasonable download times. Why they can't just use the QuickTime Player for Playback remains their secret. Strangely enough, the downloaded movie wonj't show up in Front Row...

Oliver Breidenbach
2006-09-13 08:18:17
Strangely enough, the downloaded movie won't show up in Front Row...


Ah, too quick. There is a Front Row Update 1.3...

paul
2006-09-13 08:21:54
If you're going to include "wait for download" on the iTV side, you need to include "Drive to Best Buy" or "Wait for FedEx" on the DVD side.


Lets not forget environmental concerns... save all that packaging, save the pollution generated in delivering the DVD... just download it.

william
2006-09-13 08:29:35
Your comparison isn't very good. First of all, the DVD didn't just appear on your coffee table, you either had to order it and wait a day or two or you had to go out and buy it. Compared to , it isn't very convenient. On the iTunes side, most of us already had the computer and the internet (and the wireless network), so the additional expense is the iTV and the cost of the movie. The nice thing about a DVD is that you can rip the thing and you've got your backup.
Paul Vasquez
2006-09-13 08:39:06
Another point you are missing is the ability to present slideshows and home movies (made with iMovie) on your big screen. Right now, everyone has to pile around the computer to watch them. It would be much nicer to sit on the couch.


Also, I predict that (in the future) with wireless keyborads and mice, you will be using the 50" TV in your living room as your computer's monitor. You will then (truly) be able to run your movies, music, and other goodies all from one source.

rick
2006-09-13 08:56:48
But iTunes becomes a distribution platform for content that would not otherwiese be comercially viable - niche market distribution.


HD/BR DVD will save video stores and netflix. The quality and convenience will only be available on this media. But what if I heard about last weeks episode of Gray's anatomy? What are my options? If I have tivo I am probably OK but look at the monthly cost of that. With iTV, I can purchase it for 2 bucks. Or if I agree to watch commercials, maybe I can eventually get it for free.



2006-09-13 08:58:29
> "you need this iTV thing to watch the movies on your TV"


Not if your Mac is plugged into a TV already.


I'd query your evaluation of the convenience. If you already own the DVD, yup, that's convenient. If you don't, you've got to take a trip to the store. Once you're set up with your iTV, you purchase right there from the couch, as other commenters have mentioned.


I'm also not entirely convinced that burning to a CD and keeping it on the shelf is any more convenient than copying a file to an external hard drive. I take your point about CDs working in external players, but you'll get a lot more shelf space per gigabyte with external hard drives.


I also don't see why you need an Airport Express for iTV to work. I'm sure it'd communicate directly with your Mac.

Jim
2006-09-13 09:33:29
To make the cost comparison of DVDs to iTunes/iTV, you threw in the whole cost of the PC and internet connection. To compare costs between CDs and iTunes music, you casually blew off the cost of the PC and internet connection. This makes your comparison very misleading. If you're not going to count the cost of the PC and internet connection when it comes to music, you shouldn't count it when it comes to movies.
jbelkin
2006-09-13 09:35:17
More choices are good. It may not be for you but all choice is good.


If you have 48 hours, it's hard to beat Netflix. A few clicks of the mouse and you have a DVD to watch. Or in that same 48 hours you can buy a DVD from Amazon without ever leaving your house. All good. No, all great. With your own DVD, you can rip it (2-7 hours depending on speed of your Mac) and then transfer over to ipod.


But what if you're in the office and your boss wants you to fly across the country later that afternoon for a meeting tomorrow morning ... For $25, you can download 2 movies to watch on the flight in about an hour. About the same price as breakfast in most major US cities - not a great breakfast but forgettable breakfasts? How often do you take out $100 bucks at the ATM and two hours later, notice you only $40 bucks left and you look around - wondering how exactly you spent $60 bucks with hardly anything to show for?


For a good reason or not, we don't always make the same economic buying decision - how many times have we bought the same CD/LP in our lives? If our room-mate or old GF walks off with a CD, how much effort do we go to get it back? Or is it just a disposable thing we can just re-buy?


Every buying decision is influenced by many factors including time (you can get a Coke for $.75 if you leave Disneyland and spend 90 minutes walking out of the park and across the parking lot - do you?)


A DL movie at $10-$15 bucks is not the cheapest deal or always the best deal but on the other hand, there's no extraneous thing to look for to play the movie - your friend can't borrow it without borrowing you whole ipod and so forth ... EVERYTHING has its advantages and disadvantages and even for the EXACT SAME person, not everything is an advantage 100% of the time ...

steveH
2006-09-13 10:59:57
Oliver, just a nit:


If you lose your iPod, you don't lose the content, unless you've done something horrible to your computer from which you passed said content from the iTunes store to the now-gone iPod.

Arun R
2006-09-13 13:56:40
Hi Mr. Oliver Breidenbach,


I know you are just having fun with those who peek into O'Reillynet. I am sorry about calling you a couchpotato, bankrupcy blah blah etc. I normally do not write such things to someone I know nothing about. I am sure you are just a fan of Mac as I am and the thing remains that your assessment is just misleading and will cause anyone who thinks of investing in a mac to backtrack. I think itv is a pretty good bet by Apple to tell everyone 'let us see how a mac will perform as an entertainment center and let us compare it with mediacenter pcs'. I am sure initially it is going to have a bit of take off trouble but surely it will attract more mac users and safer computers and networks. That's it buddy. Take care...

Zac
2006-09-13 15:17:37
I agree that the iTunes Movie Store is not quite there. It is awfully close in my opinion though, and closer than the TV shows were when they launched, and yet they still managed to sell one million a day (I never bought one). This is the beginning of something very big I think, something that I will be overjoyed to partake in, although perhaps not quite yet. $10 - $15 is not a bad price, and the resolution is pretty good. The iTV is also pretty well thought out, although not perfect. I think if they come up with some sort of rental scheme ($2 - $5 for one playback or unlimited in 24 hours or something) and beef up all the services in question they will have one hell of a set up on their hands.


To sum up, this is not something I am going to buy into immediately (although it very nearly is), but I think it could potentially become something amazing very quickly.

Innerdaemon
2006-09-13 16:07:03
Oliver - I think you are missing real value propsition here. iTV+iTMS is very similar to the iPod+iTMS equation. The vast majority (or as much as current data seems to indicate) suggests that most users prefer to use music ripped from their collection to listen on their iPod. I believe the same analogy holds true here - for most people this is way of transitioning their DVD library and watch on their TV - something that has been missing with existing DVR/set-top box solutions.


The natural transition will be for TVs to include iTV functionality so they can find movies that you have ripped and some that you purchased on your machine. As far as the cost equation goes, you have probably already have wifi, a PC (or hopefully a Mac), and willing to spring for an iTV - which makes it the same economics as the iPod.

Mac Scott
2006-09-13 17:59:56
I'm not sure I quite follow your argument.  I own an iPod and a Mac laptop.  Why do I have to buy iTV to watch the movies I download on iTunes?  I can play on my TV from either of the two devices I already have.  Since I didn't purchase these items solely to use with iTunes, and would have in fact purchased them without any movie playing properties, that reduces your calculation to:


Movie $15


Really, why do you need an Airport Express AND an iTV?  Why do you need either?  Viewed in this light, the iTV is merely a $300 convenience.  I assume you and everyone reading this already has a computer, and some access to the internet.  You set up a straw man by presupposing that anyone wanting to buy a movie from iTunes has to spend a couple thousand dollars to do it. 


Watch, I'll play the same game:


iTunes:
Mac (or PC): $1300
High Speed Internet: (enter your cost here)
AirPort Express: $129
iTV: $300
Movie: $15



DVD:
DVD-Player: $50
DVD: $15
Car to drive to Blockbuster:  $12,000


I'm sorry man, I am not spending $12,065 dollars to rent a movie!  How does Blockbuster expect to stay in business?


Seriously, for those people who don't already have a computer, or internet access, I'm sure that there are many other compelling reasons to get them rather than simply watching "Pirates of the Carribean"


Arun R
2006-09-14 05:08:36
Kudos, Mac Scott.
Martin Hill
2006-09-15 18:17:55
Oliver, your concerns over storing and backing up iTunes movies have a number of easy answers. iTunes Store movies are around 1.25GB in size and can be burnt to DVD-R as data meaning you can backup around 6 movies per blank double-layer disk.


On a double-layer BD-R disc you'll be able to back up 40 movies. I've just bought another 500GB external firewire hard disk for my media centre iMac G5 which can store 400 movies.


Just use the new Back-up iTunes Library to disc function in iTunes 7 and even grandma can choose full or incremental backups of just her purchased music and movies or her entire library.


Once Leopard is released, Time Machine will automate the back-up process for her entire computer including all her media and I don't think you can honestly say Time Machine is something non-geeks won't be able to grasp?


On the iTV issue, I think you are also missing the point that many people are buying Mac Minis and the like to act as home media centres directly connected to their big screen TVs. I personally use an iMac G5 on our coffee table in our lounge hooked up to a data projector and would have no use for the iTV.


-Mart