Our World. Our Minutae.

Monday, September 11, 2006

iTunes-iHollywood Movies: One Click to Rule Them All

Yes, Apple has a lot of competition - in today's worldwide global economy, who has zero competition?

But for some reason, analysts seem surprised when a competitor pops up and announces something immediately it's the iTunes or iPod killer ... and someday it may be but a mere announcement means nothing - even a product launch means nothing without actually analyzing the details.

For some reason, most analysts or analysis from journalists and bloggers seem to believe that iPod's hold on the marketplace is so tenuous that any whisper of a hint of a rumor is enough to topple it ... that is not the case ... while there is a solid percentage of people always on the lookout for the latest gizmo and gadget to buy, the MASS MARKET is not so quick to move but like an aircraft carrier, hard to turn around after it does.

The reason for the currently unbreakable hold on the marketplace by iTunes or iPod comes down to a paraphrase conveniently stolen from you know where ... :-)


The iPod can load/buy, transfer AND sync: music, movie trailers, movies, music videos, podcasts, photos, and audiobooks with ONE CLICK.


Until the competition - ANY competition can do that - They are not in the same league as Apple, iTunes & the ipod.

It is that simple.

Yes, the great design aesthetic, and the fashion plays a part into it even the 1,000+ accessories to attach to it factor into play ... and of course, the Marketing but that's just 10-15% of success of the iPod - the 85% that no can come close to ...


Because what really drives any technology market from amusing niche to mass market is CONVENIENCE.
(Of course, it has to be convenience at the right price).

Not fidelity, not resolution nor new technology for the sake of new technology ... of course, sometimes it's not immediately evident such as the transition from LP's to CD's ... what most people forget is that while the CD market was growing nicely, it didn't become a mass market until CD players dropped below $200 dollars and eventually to $49 ... the people buying $49 CD players were not buying it just for fidelity - they were buying CD's because they are so much more convenient than LP's - you can jump to any point, you can carry them around and nothing to flip over. If fact, for the longest time and even today, there are people who think CD sound is inferior to LP's ... Or a few years later when the record labels (as usual) were confused and thought we got them to replace LP's with CD's, let's make "better" fidelity CD - surely people will flock to buy SACD and DVD-Audio, right? Did the mass market care? Was it any more convenient than CD's? No, they were more expensive CD's - can most people a difference from a $50 portable CD player and $8 headphones? No.

Exactly same transition with DVD's from VHS. The mass market for DVD's arrived with the $99 DVD player. Now DVD players are $29 or less - how many are buying those players on fidelity or resolution ... or remember when the iTunes store launched - how many audiophiles predicted doom because - who in their right mind would buy a 128-kpbs music track? Never mind that you didn't have to buy a full CD, drive to the store and hope it's in stock or wait at the mailbox - one click and in less than a couple minutes, it STARTS TO PLAY.

1.5 BILLION tracks later, surprise - people like convenience.

But again, many analysts are confused and think it's a battle of Apple' DRM's versus MS DRM's - surely consumers will switch to MS's DRM as they had done with the OS - who honestly thinks like that?

It's was a battle of convenience. For the exact SAME PRICE, I can buy a music track that auto loads onto my cool iPod ... or I can choose from a dozen WMA stores and a hundred WMA players but none is guaranteeing that track will play - never mind the PLAYS4SURE logo ... which is more convenient and which is LESS convenient.

It's the same story with people who download Mp3's legally or illegally. If you know how to do it, it's very convenient and that is what you are likely to chose but for the mass market, is searching for a torrent site, searching within a torrent site, looking for a torrent file and then hoping it comes through? Or more convenient than just spending $.99 with ONE CLICK.

That brings us to Apple's competitors and why they are just not playing in the major leagues just yet.

The CELL PHONE COMPANIES. Does anyone have a phone with an interface that works as well as the iPod? Anyone? Then add in the fact that they are greedy and if they could charge you for looking the phone screen, they would ... and the biggest crippler of them all - battery life. You have a phone so you can talk to other people - who wants to run it down by listening to music with it? Just like the PSP - yes, people will add some music tracks but as for it's main use - it's for talking ... so until they can increase battery life by 50 hours in the same size with no affect on talk time - it will make very little difference. As for ringtones ... surprise, it's convenience ... Until music which are nice mp3 files available everywhere - just drag in - a ringtone requires audio editing software - what beat do you use - how do you transition in and out? Or is it just easier to tack $2.99 onto mom & dad's phone bill?

MYSPACE? Yes, lots of page views but does that translate into revenue? Yahoo has more page views than anyone - how's their music service doing? Even if you believe there are 3-million bands on MySpace (as they claim) - only the UNSIGNED bands will be allowed to sell tracks and after you buy them - aren't 75-85% just going to copy them into iTunes and then onto the iPod? If anything, MySpace will probably help sell MORE iPods. Not to be rude but 99.9% of unsigned bands are unsigned for a reason - they're not that good or not that interested in making it a full time commitment & career - nothing wrong with that but that's like claiming the minor league baseball team will siphon fans away from the major league team ... a handful yes but no one will notice. If an unsigned band on MySpace manages to sell 25,000 tracks at $.99 - that will be amazing. MySpace music - I'm sure it will be a nice business but as for making a dent in iTunes or iPod - no. Now if the record labels allowed all their bands to sell tracks without any DRM - yes that will affect iTunes Store but until then ...

MICROSOFT ZUNE. It's not easy to design a product that has already gone from excitement to old news even before it's actually launched ... from the heady days of it will be 100% wifi and XBox "cool" and free tracks to a re-badged Toshiba that offers you an option to create a MS Live community and it looks like a metal case for a Toshiba ... Only MS. Every since they got a taste of being consumer cool in 1995 with Windows, they've been trying ever so hard to catch that in a bottle again but have failed every time from MSN Online to MSN Search to the Talking Barney to Media PC to Watch OS to Bob to WebTV to home networking ... all failures. The Xbox "success" is built on $10 billion dollars  spent or about $400 per Xbox/XBox 360 sold. So it does not look promising for Zune - especially since consumers will now face infighting among WMA players and WMA music services ... in comparison the iPod and iTunes will look like a beacon and oasis of CONVENIENCE.

THE MOVIE DOWNLOAD COMPETITION. Of course, we'll have many answers tomorrow but today - note that like the online music market, many people have staked out a place already - from Amazon to Vongo to MovieLink. Already people are complaining that Amazon's is too complicated ... and er, NOT CONVENIENT.

That's who will win that competition - what is the most convenient. Right now, the benchmark is either Netflix or just buying a copy for $12 at Costco or Walmart. To move the paradigm, you have to be MORE CONVENIENT, not less.

It will be interesting to see what Apple delivers tomorrow and whether download movies is a huge market or not at this point (your download speed will vary if you have basic DSL, full cable or fiber, of course) but the answer is clearly NOT what Vongo, MovieLink and Amazon have delivered so far - extra software, wonky restrictions and poor interfaces ... clearly less convenient than Netflix or the store.
And until you can trump or tie ONE CLICK.



Anonymous Anonymous said...

What a great post! You make all the sense in the world and I agree with everything you said. Jobs gets the convenience
thing all the way. It'll be something to see if Hollywood will wait for the rest to fail before coming to the table with product for itunes movie store being that they are afraid of Apple or should I say having less control.

7:31 PM


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