MacDailyNew reports that Forrester Research is betting that video downloads don’t have a future. Although they suggest that paid video downloads will increase this year, generating about a third of a billion dollars in revenue, they’re predicting that this market will evaporate. Currently Apple, Amazon, Microsoft, and Walmart all offer paid video download services. The problem is apparently that sites like NBC and CBS offer free streaming media, where they receive ad support and they control the content and the audience.
Forrester also seems to think that Apple TV will switch to an ad-supported broadband service provider. The video content will shift from iTunes paid episodes to YouTube and Google video content as well as ad-supported streaming from the major networks. And that movies-on-demand providers such as CinemaNow and Movielink will partner with satellite and telco service providers, going back to more traditional on-demand video.
Seems to me that Forrester is guessing that everything will be running quickly to return where it all used to be instead of moving forward into new models. And I’m not sure that I agree with any of this.
I mean, take Apple TV. Everyone agrees that there’s still missing components: no High Def iTunes offerings (yet) and no video subscriptions (yet) and limited movie selection (so far) and no iTunes shopping or Web browsing (yet and yet). But does that mean Apple should turn it into a $300 funnel for free-to-Internet video? I don’t think so. I’d imagine that long before Apple turned Apple TV into a crappy WebTV redux that it would make it into a high-def PVR.
Consider external USB hard drives and an Apple-TV-friendly EyeTV system. They’d give you a relatively cheap High-Def TiVo alternative long before Apple replaced it with a crippled WebTV-esque service, right? I mean, let’s do the math. High Def Tivo means an expensive unit plus an expensive monthly fee. Apple TV is $300 plus $100 for a high-def tuner plus an external USB drive at, say, $100. So for $500 you’ve got fabulous high def TV PVR. You’ve got that now, of course, if you don’t mind adding in a Macintosh to the equation, sitting in another room with a router. And you can already buy content on demand from the iTunes store, even if it’s not yet high def. Forrester doesn’t seem to see that there’s more to Apple TV than the iTunes store.
But speaking of the iTunes store, as I’ve written before, I’d really like to see a video subscription model. I think Netflix has gotten it right–and is continuing to get it right by expanding from their disk delivery service by adding a video download model. I’d much prefer an all-you-can-eat approach to video subscriptions but I think the “check out N at a time”, where you pay more for larger values of N, is also a healthy approach.
Netflix also gets it right by offering both movies and TV shows. If it’s on DVD, you can rent it, watch it when you’re ready to watch it, and then send it back so someone else can watch it. It doesn’t matter what the content is. Compare and contrast with iTunes, where there are essentially separate TV and movies stores. I don’t see Paramount or Universal adding ad-supported movie services to their websites any time soon the way that the networks are doing.
Finally, more and more people are cutting the wires. They’re opting out of cable and satellite. Sure the numbers are very tiny right now but they’re growing. With Internet-delivered video, consumers are now discovering that they have a choice outside the satellite/cable monopolies. Just like those people who dropped their landlines and switched entirely to cell phones, consumers are discovering that with PVRs, free-to-air high-def video and online download services, they can choose what they want to watch, when they want to watch it. I’m guessing that appointment television is dead and it just doesn’t know it yet.
I think appointment TV will always be there for sports. And I'm not sure if broadcast TV will go away, cos it takes away the effort of choosing what to watch. People, generally, are lazy :)
But yeah, all this ad-supported nonsense will hopefully die a death. I don't like ads. I like TV shows. I'll pay for them.
Does Forrester Research merit any more consideration in what they say than the average Joe Schmoe? What's the track record of their past forecasts like?
Any chance that they have frequently reported the impending demise of Apple in past visions of the future?
In my experience, almost all of these "thinkers for hire" wind up telling those that pay the bills what they want to hear, in some manner or other. Any chance that broadcasters are heavy duty subscribers to Forrester's thoughts and prognostications?
My experience with Forrester is that they generally miss the mark, and are pretty anti-Apple. This is anecdotal data.... YMV
I expect you'll see a variety of markets serving the same content - those of us who can afford it, and value our time over money, will take a 45 minute ad-free episode of BSG over a 60 minute one with ads - provided the price difference is reasonable.
I think that for the foreseeable future there will be some need to physically retain content for more than a few days.
For instance, that long car trip with the kids where acceptable high-speed access to the Internet is unlikely.
Or that business trip to Japan where you must, absolutely, have the content available on demand and secure.
One other thing about the Internet AV (or AppleTV AV, for that matter), is there is no parental control (or even parental guidance).
So rather than risk deep-sixing the business meeting, or listening to the kids scream in the back seat for several hours-- you take your content with you, electronically, not wirelessly.
You control who, sees what, and when!.
Dick
Forrester has a point, they just don't know how to support it. The problem with the current model of video download is that it's not available outside of the US. Yes, the US is a huge market. Is it big enough though that the current early-adopters are going to be able to float video download until it becomes commonplace? US has one of the lowest percentages of broadband penetration in the world, and even then many of the people with broadband don't do much beyond send pictures via email. How much money could the networks make if they were to offer TV shows currently only broadcast in the US via download? I know that if I had the option I would pay a little per episode to watch Heros. As it stands, I have to wait for the torrent.
Apple's German website make me laugh too. "Everything you have in iTunes, but on your widescreen TV". Same for the UK. What I want to know is, why would I want my music collection on my TV? That's all there is in iTunes here. I have no idea why Apple even bothers to offer the TVs for sale here.
It's not that video download is a bad idea, it's just the Newton's new brother. Just like the Newton, I'm sure we'll all wonder how we go by in 10 years time.
I have to question your idea that EyeTV + Mac + AppleTV currently makes a good PVR. Truth is, there's not real TiVO alternative in the Mac space (yet). I've researched and spent some money on some of the components you describe, and without a whole bunch of addon products, and even then will lack the flexibility of TiVo. Of course, TiVo doesn't have a particularly attractive pricing/business model any longer. So the end result - unless I'm missing something - is that there is no real viable intelligent PVR on the Mac side.
I have seen so many misrepresentations and misunderstandings of the Apple TV, it's getting old. You pointed out the biggest misconception: that the Apple TV is somehow worthless without the iTunes paid content. I subscribe to a few shows through iTunes, which is great hassle-free TV (no commericials, and consistent quality (not hi-def yet tho). For those I really care about, the iTunes fee is not bad, because I'd pay the same to see three good movies. But 90% of what I use my Apple Tv for is non-iTunes content. I've ripped some DVDs (mainly stuff for the kid who watches the same thing over and over), and then 'found' a ton of good content online, which with a simple conversion is ready for the ATV (ofcourse, your ATV hacking can solve that permanently by installation of video codecs). Finally over 50% of the time, I am listening to music. The ATV is a great extension of my iTunes library (not store), and a lot of people seem to forget about this. I like this aspect of it as much as the video.