Apple Dominates the Movie Download Business

It should come as no surprise that Apple knows what the consumer wants and knows how to deliver it. Before the iPod, mp3 players and other portable devices were hard to operate or too bulky. Apple streamlined the process and made the download process idiot-proof. It started with music and that expertise has expanded into the video download world. "Apple's iTunes accounted for 64.5 percent of all the money spent in 2010 on electronic sell through (EIS) and Internet video on demand (IVOD) despite facing increased competitive pressure from Microsoft's Zune (Xbox), Amazon, Sony's Playstation, and Wal-Mart." Two thirds of all movie downloads were through the Apple iTune store. Impressive. In fact, that percentage is down. "In 2009, iTunes held 74.4 market share, and its share fell 9 percent last year, according to iSuppli. The good news is that the overall market grew by more than 60 percent." And by all accounts the size of this business will only continue to grow.

And where are the cable operators in the mix? Sure VOD offers rental opportunities but what about a download to own option. What if I like what I rent and I want to keep it. Cable could incent with a discount attached to the on demand rental. They could enable the purchase and take a share of the revenue. Liked Harry Potter, push the button to get a download to your account. It seems like a missed opportunity given the dollars going toward the digital business, and yet cable operators keep watching this content being sold through other distributors, like Apple.

And Apple continues to own the music download business too. Their ability to be content feeders to iPads, iPods, iPhones, Macs, and other devices cements the Apple brand as the aggregator of all content. So what is next; how about digital subscriptions of newspapers and magazines. Content and distribution working together to give the consumer what they demand. Certainly, competition will continue to push Apple to work harder to maintain its lead. Its share may drop a bit but as they continue to innovate, the growth of the business will more than offset. And as long they can continue to adapt to the changing demands of the consumer, Apple will continue to lead the change.

Should Apple Buy Sirius or Perhaps Direct TV?

Its early in the year and the talk is of acquisitions. With AOL buying the Huffington Post and Apple flush with cash, I wonder if it is time for Apple to make a purchase. The linked article describing Sirius's new website and link to iTunes makes me wonder, should this relationship be even more connected? Should Apple buy Sirius? Is it time for Apple to own a distribution platform?

A Sirius purchase would give Apple a mobile connection and perhaps lead to a stronger connection. And adding a Sirius subscription not only to the car but also to iPhones and iPods would be a consumer benefit. Could Sirius also drive video through its subscription, Apple would gain even more of a platform share.

But if not Sirius, the other platform that would seem to make sense for them could be Direct TV. Both in its reach and content delivery, it could add another dimension to Apple TV. The challenge of satellite, for both Sirius and Direct TV is the one way nature of the signal. Designing a solution to correct that issue would be another game changer in the entertainment and communication landscape. And I have no doubt that the folks at Apple are up to the task.

What is the Internet, Anyway

Great video from the Today Show with Katie Couric and Bryant Gumbel. Boy have we come a long way since 1994.

Apple's Lemming 1984 Ad Keeps Coming True

Apple's Super Bowl commercial, modeled after 1984 and showing lemmings all in a line marching to their death is all coming true, and ironically it is due to Apple. With each new release of product, consumers are waiting in line for hours for their turn. Today, that line is for the Verizon version of the iPhone. "After less than one day Verizon sold out of its online pre-order stock of iPhones. When the phone goes on sale in stores in a week, we fully expect to see people lined up for blocks." And this need to follow the pack and wait in line with the hope of receiving a phone is a little too much. You can't wait a few more weeks for things to settle down. Afraid you might miss something. I simply find this need to wait in a line amusing and a little sad. Of course, it is all good business for both Apple and Verizon. With inventory selling out, the demand over supply mentality only builds more want. All I can say is chill. A couple more weeks to wait won't kill anyone and you will probably get better service getting your iPhone authorized.

Cord Cutters Rejoice, Hulu Adding More Content

For those tired of their cable bills and eager for more web content, more is coming your way. Viacom and Hulu have partnered again to allow Viacom content to be viewed across the web. "Content under the agreement to be added to the Hulu Plus $7.99 monthly subscription service will come from Viacom media networks including Comedy Central, MTV, BET, VH1, Spike TV and TV Land." In addition to the subscription portal, Viacom will be providing content into the free space as well. For those with kids though, the exception is its Nickelodean content including Dora, Spongebob and other shows. It has been about a year since Viacom pulled its content off Hulu so this new agreement is good news for those consumers waiting patiently for the return of shows like The Daily Show and The Colbert Report.

And with the Comcast NBC deal signed, Comcast retains an ownership stake in Hulu but not a voice in its strategic direction. A lost sub to a Hulu subscription is certainly not a zero sum game. Still as Hulu continues to grow, NBC and its new owner Comcast will find some benefits of this arrangement. And Comcast continues to push itself through TV Everywhere and its own mobile content. The more content Comcast enables on computers and smartphones, like the recently announced Turner deal, the more Comcast remains connected to its consumers' needs.

XFinity TV App Now Offers On Demand

Quick, update your iPad and iPhone XFinity App, with new on demand deals struck, Comcast is making video content available on your mobile device. "The free app initially offers several hundred titles to customers, with access contingent on their cable TV tier. Full episodes include HBO's Boardwalk Empire, Showtime's Weeds and TNT's The Closer. According to Comcast, the streaming feature is available over any Wi-Fi connection." The most recent mobile video deals are with Time Warner networks including HBO, TBS, and TNT. And while on demand access is one step closer to TV Anywhere, missing still is accessibility to linear content.

Take for example today's unrest in Egypt. Having a linear feed of CNN on your mobile device means access to current news and information. And extra eyeballs should also mean higher ad revenue. It is the next step to true TV Everywhere and Anywhere.

Till then, it is nice to enjoy more video content on the go. This updated App is a strong step forward. But please, lets not stop.

Netflix May Be Worried

I love competition. Competition makes everyone work harder. Competition pushes innovation. And it keeps the economy humming. And hopefully, it keeps prices to the consumer at reasonable levels. As digital media becomes the product of the future, it pushes companies to reinvent themselves in this space.

Netflix has done it, converting from a mail house of DVDs to a streaming media mecca. And at the same time raised the competitive eyebrows of cable. But just as quickly as Netflix is chasing cable, Amazon may be chasing Netflix, based on a rumor circulating around. What is Amazon's true competitive play. The article also speculates a purchase if Redbox as well as distribution deals with premium providers.

And where does Apple want to be in this competitive arena. How does Apple TV partner or compete with this cord cutting rivals? "Netflix may be vulnerable, according to Michael Pachter, an analyst with WedBush Securities. 'It's a giant opportunity, and Amazon and Apple are the only two guys that have all the elements necessary to effectively compete: access to content, big balance sheets, good technology to deliver content, and some installed customer base they can easily market to.'" I couldn't agree more.

Hey Brother, Can You Spare A Charge

One of my favorite Twilight Zone episodes had a character finally getting what he wanted, to be left alone to read his books. As he bends over to grab one, his glasses fall and smash. He was left with all he could read, but without the ability to see. And so goes the nature of the mobile device. Left untethered, we have the capability to phone others, read, listen to iTunes, watch videos, tweet, and surf. But what do we do when the power runs out.

This is my dilemma with buying one device to do it all. Knowing my un-smart phone can make and receive calls, I don't want to risk draining it on other uses. Letting a second device manage the other non-essential tasks provides some relief that an important call won't be missed. It also means carrying 2 devices. Buying one device, say an iPhone or Android to do it all concerns me. What if the phone loses power after surfing and yet I still need to receive an important call. Do I rush into the nearest Starbucks for a charge and a latte? Am I charging my phone every time I am near an outlet just to be certain I have power during the day? How can I both use this mobile wonder that connects me without losing a complete charge to connect me?

Will we find ourselves begging for a charge wherever we go. Searching for an outlet at every meal. Or is it time for companies to make that quantum leap of sustained battery use. Today I am charging my iPod every night and that is for a device that doesn't make a phone call. It is that concern that keeps me from trusting one smartphone to do it all.

Interactive Content, Take Two - ABC Tries Again

A big argument, when watching sports on TV has been the amount of clutter filling the screen. Banners, bugs, pop ups, and often meaningless data meant to divert our attention form the action on the field. And sometimes, the statistics aren't what we want, when we want it. So what does work. Well with the rise of tablets and smartphones, incremental and interactive info can be shared concurrently with the action.

I haven't seen it offered yet with sports programming, but ABC keeps trying interactivity with its own TV series. The first was the show My Generation, but as it was not highly watched, it was lost on the radar. In this second attempt, a ratings winner will be used, Grey's Anatomy. Using a technology called Sync, the action on screen matches the interactive application on the iPad. "Sync is able to time content to a TV broadcast via Nielsen’s Media-Sync Platform, which allows mobile apps to automatically detect and synchronize with TV programming using audio watermarks. Programmers like ABC have been experimenting with all sorts of interactive-TV strategies for years in hopes of increasing viewer engagement and opening up new advertising opportunities."

I like where this is going. I would love to see this application tied to sporting events. The Super Bowl is a week away. An interactive iPad app tied to the on screen action would be a huge win. So much potential.