Home Apple’s iPod Success Won’t Be Repeated With iTV

Apple’s iPod Success Won’t Be Repeated With iTV

At yesterday’s Apple Showtime event, Steve Jobs announced
upgrades to iPod/iTunes, the addition of movies to iTunes, and an upcoming product called
iTV. Movies on iTunes had been predicted and much discussed before the event, so the real
interest was in the iTV announcement – which is essentially Apple’s version of Media
Center, the Microsoft tv product. iTV (not the final brand name) will enable users to
view all their Apple-downloaded content on a big screen tv – movies, TV shows, music,
podcasts, and photos.

Pic: Michael

Several pundits noted that Apple’s strategy for their Internet-connected products,
including iTV, is disarmingly similar to the one Microsoft employs: closed ecosystems
built on proprietary, locked-down technologies. As Tristan Louis
put it

“…there is no DVR or traditional TV tuner built into the device. I believe that this
was not due to a technical limitation but rather as part of a wider play to create an
eco-system around the new device. Much like Apple initially allowed other companies to
develop components that played well with the iPod, I believe they are trying to get a new
ecosystem built around the new device. This will allow them to gage innovation in the
space and identify which opportunities may be best for future integration or as
components to add to the system.”

Apple is betting that their design and marketing prowess will give iTV an edge in what
is shaping up as a highly competitive market for online television and movies. Microsoft
is taking a multi-pronged approach – with Media Center, XBox, the upcoming Zune (an
iPod-like product) and other multimedia functionality built into Vista. Let’s not forget
other players either: Yahoo has been testing online TV and video services, Google hasn’t
done much yet but could easily enter the market, smaller players like Brightcove and
Gotuit, the cable tv companies, Sony, plus there are the existing DVR products like

Where Apple’s Internet strategy is different from the others is that, as Om Malik put
, “content is what sells the hardware”. And that has worked a treat for music – the
iPod has 75.6% of the market and iTunes 88% in the US and number 1 most other places (it
still hasn’t released in New Zealand though!!). They’ve achieved that through a
combination of a ‘best of breed’ design (for the iPod) and a large selection of music on
iTunes, that is about as comprehensive as it gets for legal downloads (still nowhere near
online music nirvana though).

Design: Yes; Content: No

I’d bet dollars to donuts that Apple can nail the design for iTV, just as they did for
iPod. That’s almost a no-brainer. The real question though is: can they get as wide a selection of video/tv/movies as
they’ve managed to do with music? So far they only have Disney video, courtesy of Steve
Jobs being on the board of Disney. Will the other Hollywood and major media tv networks
be as willing to give Apple rights to their content? I doubt it. In fact, it’ll be extremely difficult for Apple to get mainstream media content for iTV – which they need, given that it doesn’t have DVR functionality.

Betting against Apple on this one

The online video and tv market is wide open right now. Will Apple’s iPod/iTunes
strategy work as well for movies/tv shows as it did for music? If I was a betting man,
I’d give that a resounding NO. There are too many other players – and none of them are as
ill-informed and ignorant of the Internet as mainstream music companies were/are. Plus of
course Microsoft missed the boat with online music (Zune is a very belated attempt at
catch-up), but they won’t make the same mistake with video/tv.

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