Apple, NBC stake digital video claim

The scramble among media and technology companies for a place in the burgeoning digital video business gathered pace on Tuesday as Apple Computer and NBC each staked their claim to a central role.

Apple took aim at Microsoft and Sony with its first bid for a place in the living room. Steve Jobs, Apple chairman, unveiled a gadget that he called “the missing piece” in letting people watch video on their TV screens that they have downloaded from the internet. Walt Disney also announced that it would release its films on Apple’s iTunes service, marking a breakthrough for the digital music store.

Meanwhile, NBC sought to counter the threat from Google, Yahoo and other web portals in the emerging market for online video distribution. The TV network company launched a clearing house for digital video that will include its 230 local affiliates as well as more than two dozen partner sites.

Apple’s new gadget, developed under the codename iTV and scheduled to go on sale early next year, is a box that plugs into a TV and “streams” digital video that has been downloaded to a home computer.

While such “media extenders” are already sold by Microsoft and Sony, among others, they have been too complicated for consumers, said Richard Doherty, an analyst at Envisioneering. Referring to the success of Apple’s anti-piracy software and its reputation for ease of use, he added: “I think Apple has solved it.”

In a mark of confidence in Apple’s technology, Walt Disney said on Tuesday it would release films made by the four studios it owns on Apple’s iTunes digital store at the same time that they are offered for sale on video. Disney’s decision marks a break with other Hollywood studios. While other studios have held talks with Apple, they have held back, in large part because of fear of crossing Wal-Mart, whose shelves they rely on for DVD sales - and which on Tuesday said it would push ahead with a digital download service.

Disney upset the retailer earlier this year when it decided to make its hit television movie, High School Musical, available for sale on iTunes before copies of the DVD arrived at Wal-Mart. The retailer ultimately limited its order for the film before Robert Iger, the Disney chief executive, patched up the relationship.

Meanwhile, NBC sought to position its video distribution service as a marketplace with the scale and reach to compete with the internet giants.

“If we really want to compete with the big aggregators like Google and Yahoo, then you want your content out there on as many platforms as possible,” said Randy Falco, president of the NBC Universal Television Group.