Apple marches to own tune in shunning video iPod
Posted 6/16/2004 4:17 AM Updated 6/16/2004 4:43 AM
By Duncan Martell, Reuters
SAN FRANCISCO — Apple Computer already has a smash hit with its iPod digital music player, so it might seem a no-brainer to follow up with one that plays movies in time for Christmas.
What you see is all you'll be seeing on the iPod, at least for a while.
Image courtesy Apple
Not so fast, say analysts and even Apple's famously secretive co-founder and Chief Executive Steve Jobs himself, as such speculation has mounted in recent months on Internet bulletin boards and Apple enthusiast Web sites.
Brokering licensing deals with content distributors and creators, such as movie studios, is expensive and time-consuming. Also, there is yet to be any sign of great clamoring for portable video players by consumers. There are technical issues to consider, as well as the basic nature of immersing the senses that is required to watch a movie.
"There are already a whole bunch of perfectly capable devices out there that can play movies — and they're called notebook computers," said Mike McGuire, an analyst at market research firm GartnerG2 in Silicon Valley. "It's still an open question whether there's enough demand, and I think that's central to Apple's considerations."
To be sure, there are companies, such as Creative Labs' Creative Zen Portable Media Center and other such Windows-based devices that will be on store shelves in time for the crucial year-end shopping season. Creative sells a range of digital music players, while Apple continues to focus on music.
Breathing room
With the success of the iPod — technophiles and tech newbies have bought more than 3 million of them already — Apple deserves much of the credit for ushering in wide-scale acceptance of legal music downloading, analysts said.
Before then, piracy loomed as a crippling threat to the recording industry because of the popularity of Napster's first incarnation and other file-sharing networks.
"There's no question that the music industry was searching high and low to find a pay service in order to thwart piracy," said analyst Tim Bajarin of Creative Strategies, another Silicon Valley market research company.
But, at least for now, movie studios do not face the same urgency that the five major record labels did, ultimately signing a ground-breaking pact with Apple that paved the way for its online music store. Part of the reason is that, while high-speed Internet access in the U.S. and Europe is broadening, it's not yet at the data rates necessary to support timely downloading of full-length feature films.
That gives the studios some breathing room.
"Hollywood doesn't make to want the same mistake as the music industry," Bajarin said. "While it's urgent to get it right, there's actually time to do it right."
McGuire of GartnerG2 notes: "The costs in time and money of negotiating rights to video content are substantial and you don't want to make that investment if you can't foresee the demand for it."
Stay in the background
So far, Jobs doesn't himself see that demand. A shareholder asked him about plans for a video iPod at the company's annual meeting in April. He responded by paraphrasing a campaign slogan of Bill Clinton's 1992 presidential election campaign, "It's the economy, stupid."
"It's the music, stupid," Jobs said after a slight pause. Also, last week, Apple's head of hardware product marketing Greg Joswiak told Reuters that Apple has no plans yet for a video iPod.
And beyond the issues of negotiating licenses, the need for higher speed Internet connections than are now prevalent, there's the basic difference between listening to music and watching video content.
It's easy to plug a digital music player into a car stereo and listen to music while driving, using an iPod while walking to work or working out. But doing these things while watching a movie on an iPod-like, portable device is clearly not advisable.
"Music is largely a background experience and movies aren't," said Phil Leigh, an analyst at Inside Digital Media.
In addition to demand, design, licensing issues, and an adequately sized screen that consumers would expect, Apple, because of its good fortune with the iPod and iTunes, also has to worry about diluting the marketing brand of the iPod.
"Apple has good equity built up around the iPod brand," McGuire said. "They have to be careful about turning it into this digital-media Swiss Army knife that does a lot of things but none of them very well."
