Steamrolling the steamroller

by Giles Turnbull

As predicted, Google today announced an online video retail service that will soon start selling TV and movie material directly over the web.

This is not the kind of news Steve Jobs wanted to hear, but he must surely have been expecting such a thing. Now he needs to activate some kind of plan to fight back.

The problem is this: Apple owns digital music, as near as dammit, thanks to worldwide popularity of iPods and the success of iTunes on Windows as well as OS X. Everyone has been predicting a similar move into video for some time now, but it took longer than some people hoped for the video-enabled iPod to appear. And even now, with a video iPod and video in iTunes, the content selection available is limited. Apple does not, by any stretch of the imagination, own digital video.

And all the major internet companies have been closing in on the same goal. Microsoft, Yahoo! and Google want to own digital video too, and this time they are not nearly as far behind as they were when Apple first introduced the iPod and the iTunes Music Store. This time, they know exactly what to offer. And they have many more users and customers than Apple.

A large part of Apple's success with music was the iPod, and while the video iPod is a neat little device, my personal view is that for most people, portable video is not what matters. It's neat, yes, but it's not the most popular thing people want to do with video content. They'd much rather watch it on a large screen.

So it follows that this time round, the iPod does not represent the kind of trump card that it did in the music battle.

Faced against the might of Google, Yahoo! and Microsoft, Apple looks like small fry indeed in this looming battle for online video content.

Unless... unless perhaps it can unveil some great new hardware that gives it the same edge that the iPod gave it. Something that screams to consumers: "Buy me! I'm so cool!"

Let's hope Steve and his team have been planning Tuesday's keynote with this in mind. The ball's in their court, and they need to hit an ace.


2006-01-07 18:52:35
ipod video
Before I received my ipod video for Christmas I would have agreed with you about the importance (or lack of) of video on the ipod. But, now that I've had my ipod for a couple of weeks, I've spent more on downloading TV episodes than music. I didn't expect that, but I'm really enjoying watching the new Night Stalker and Lost. Normally I don't have a lot of time for TV, but my bus ride is about an hour each way, so the ipod is perfect for that. The only problem now is that the video selection is fairly sparse. I'd love to see a bunch of old TV shows make it to itunes. It will be interesting to see how well the ipod video is selling. Maybe my situation is unique, maybe not.
2006-01-07 19:12:24
Purchasing old TV shows is OK, but...
What I'd really like to have is a iPod with built-in iSight and WiFi. I think it would be very cool to video chat using an iPod, as well as capture and share video.
2006-01-08 00:34:36
As much as I love...
...Apple and iTunes, where I live in the world (Middle East) we cannot buy anything from the iTMS, so it's no good to us. I guess we won't be able to spend our money on video at Google either: "Google Video Store will be available throughout the world, however purchasing premium content in the Google Video Store will only be available in the U.S."

And there are questions about what we could put on an iPod:
"iPod and Sony Playstation Portable users will also be able to download and watch any non-copy-protected content from Google Video, and even get it specially optimized for playback on their devices."

As savvy at knowing markets and trends as Apple (Jobs) seems to be, I'd be very surprised if they didn't have something rather big to announce shortly (perhaps not the coming week though).

2006-01-08 02:15:13
No one answer?
The thing that seems obvious is that the content companies are being a little more savvy this time, playing the tech companies off against each other.

I just hope that they don't try to get revenge on Apple / form an alliance to cut off Apple's growth. That would be stupid - but most of them still don't 'get' computers (see Sony response on the rootkit issue).
2006-01-08 03:32:25
Portable video
All Apple need to sew up this market is a portable 14" lcd video tablet, with Airport extreme built in, which can stream video from their soon to be released media centre TV. If you can carry a little tablet (which also has internet access) around the house with you and prop it up wherever you like or watch it on your lap, there's no need to have bulky televisions distributed around the house, and even for web surfing you wouldn't have much need of a laptop. It's the sort of targeted niche that tablets would excel in - not replacing a laptop but performing another function.

Allow it to download from their media store, control the media centre, perhaps put good quality flat speakers in the back (not the rubbish they have presently in their laptops), and MS or Google would have a hard time competing.

First thing they need to do though is to up the resolution on their video downloads, which aren't suitable for anything other than ipods.

2006-01-08 09:34:43
Apple *is* the big shark
I know we Mac users have a long history of being the little guy, and I think because of that we reflexively think of ourselves as the "little guy". But let's face it: as far as online content distribution is concerned, Apple has a monopoly as surely as Microsoft has on Operating Systems. After all this time, there really is nothing that competes effectively with Microsoft in the Operating System space. The only thing anyone can do is point hopefully at trends which may or may not pan out. In the meantime, Microsoft continues to get huge revenues day after day, month after month, year after year.

The same thing applies to Apple in online video and music distribution. Google really has nothing to compare to the size and quality of the ITMS, and that is unlikely to change anytime soon. The unlikely best that Google can hope for is to create a user experience equivalent to that of Apple's, and then they still have to contend with the fact that Apple is already entrenched in that space. And it seems extremely unlikely to me that Google has anyone capable of bringing any real gravitas to a meeting with Hollywood lawyers, whereas Jobs also happens to run one of the most successful and well-known digital studios in existence.

I just don't understand why everyone keeps acting like Chicken Little every time Apple gets some competition. It was the same when Microsoft announced Longhorn, when Napster relaunched, when Yahoo started selling music, when approx. 1 million iPod knockoffs appeared, when the PSP was launched, etc. ad nauseum. Apple can hold their own. They can compete pretty effectively. Seems to me that if you want to worry about someone, worry about Google wasting resources on a project they can't recover revenue on.

2006-01-09 03:57:57
Apple *is* the big shark
I don't agree that "Apple is already entrenched in that space" when it comes to digital *video*. Apple is entrenched in the digital *music* space, yes, but not in video yet - no-one can make that claim yet. That's why I think the moves by the other players are so important. Everything is up for grabs and there's no knowing who will be in the best position to recover (sufficiently profitable) revenue in the long term.