A venture into video may be “one more thing” too much for Apple if this wording of an enigmatic invitation means the unveiling of a moving-picture iPod this week.
Steve Jobs, chief executive, has in the past doubted whether the market is ready for such a portable media player and if he announces one at a special Apple event on Wednesday, heralded by the invite, he will find analysts sceptical about its prospects.
“There have been companies larger than Apple that have tried to kick-start this market – notably Microsoft – and they have not done a very good job,” says Michael Gartenberg, research director at Jupiter Research.
“We know from our research that there’s a lot of consumer interest in mobile video content. But there’s a two-fold problem – there’s very little content available and it’s way too difficult to get what is on the market.”
There is little video on the web specifically designed for portable media players to appeal to consumers. Microsoft has the msnvideodownloads.com service, which offers a small range of Fox TV sports clips and lifestyle TV excerpts for a trial price of $20 a year for US users.
The Microsoft service is part of its PlaysForSure initiative, which allows transfers of digital downloads from PCs to compatible portable media devices, while offering copyright protection to the content owners.
The CinemaNow online service, whose investors include Microsoft and Blockbuster, sells downloads of more than 500 films to portable media players but there are few well-known box-office titles among them. It also offers downloads of more than 200 music videos for $2 to $3 each at WatchMusicHere.com.
The reason for the lack of choice is the reluctance of film studios and television networks to commit themselves to internet distribution, because of the rampant piracy experienced by the music industry and a perceived threat to their traditional delivery methods. This is in spite of strong digital rights management technology being created by software companies such as Microsoft and a large potential market opening up as broadband adoption grows and sales of the new players start to take off.
“There’s an epic battle playing out between the cable and satellite companies on one side – the forces of control – and the internet, being the force of freedom,” says Reed Hastings, founder and chief executive of Netflix, an online DVD rental service. at last week’s Web 2.0 conference in San Francisco.
“They want you to [be happy with] 500 channels, it’s a proprietary model and they will defend it by keeping the exclusive content away from an iTunes for video. The problem in the movie space is that [the studios] have the content and they fund [CinemaNow rival] Movielink, but it only has about 600 titles out of hundreds of thousands.”
Mr Hastings, whose company could begin to deliver movies by download as well as through the post in the future, says traditional media companies are worried about eyeballs moving away from their outlets to the internet. “I’m sure the forces of freedom are going to win over time but it’s going to be a long battle because of this exclusive content,” he says.
Mr Jobs, who is also chief executive of Pixar animation studios, may have the connections to break the US content logjam and could find partners abroad willing to offer material, such as the BBC.
Certainly, a video-enabled version of Apple’s wildly successful iTunes is the kind of service that could achieve a breakthrough in reaching consumers. The iPod’s success – more than 500m songs have been downloaded to play on more than 21m devices – is expected to once again benefit Apple’s earnings, due on Tuesday.
“I would not expect Apple to produce a device that they have no content for,” says Mr Gartenberg. “Consumer fascination with Apple is going to play a part and its entry would no doubt be very, very significant in jump-starting the market.”